Unacom- Oil and Gas News

                                                                                  Mon 20th August- 27 August 



Hard Times ahead for US LNG amid China Tariffs

A tough winter could be coming for US LNG, among an escalting trade war between China and the US. PetroChina may suspend its buying of US liquified natural gas cargoes during the colder months, just as new terminals start up. This could force American gas suppliers to slash their prices, to lure other buyers. With China threatening a 25% tariff on US LNG and other traders, this leaves very little option for American traders to having to sell spot volumes at a discount.

New Record Set for US Natural Gas Production

The released monthly figures from the American Petroleum Institutes shows that the US set a record for the NGL ( Natural Gas Liquids) last month producing 4.4MMbdp. This is following Julys result, where the US tied its record for crude oil production at 10.7 MMbdp. With these substanial growths, the US has been the worlds only substantive source of oil production growth so far in 2018. As a result of this growth, the oil prices have remained lower than the international prices, which is good for domestic consumers.

CEO of Worlds Largest Shipping Company says US will be hit harder than rest of the world in trade war.

Soren Skou, who runs the worlds largest shipping company from Copenhagen, says that US tariffs could slow global annual trade growth by 0.1 % to 0.3%, however the effect on the US could be 3% or 4%.  The Trump administration has argued that these tariffs are addresing the imbalance in trade relations between China and much of the rest of the world.

Hammond's Tax Plans could hamper North Sea Recovery

Chancellor Phillip Hammond, is reviewing taxation of the oil and gas industry ahead of the budget at the end of the year. SNP MP, Kirsty Blackman,  has warned that any rise in taxes just as the industy is recovering would affect ' the sectors ability to invest and extract the North Seas full potential upon which so many jobs and wider economy depend.  With the North Sea reporting that production efficiency rising for the fifth consecutive year, reaching 74% in 2017. With firms still finding conditions tough, its important that the UK government exercises its reserved powers to do more to stimulate exploration and attract fresh investment.

UK Energy Security Fears Raised by Rhum Sanctions

A deadline is looming for BP to obtain a waiver from the US sanctions, to allow continued gas production from the Rhum natural gas field. If BP fails to obtain the waiver, it could jeopardize the transfer of BPs interest in the field to Serica Energy. The amount at stake for gas in the Rhum fields is relatively small, with the amounts obtained roughly equalling 2% of the UKs daily consumption.
Serica is a small London based company, it is said to be in 'advanced talks'  with the US authorities to obtain administration. Sericas plan to take over from BP at Rhum fields, is part of a trend of smaller firms taking over mature fields way past their peak to maximise output.

Secruity issues have been raised due to the UKs growing dependecy on imports mainly from Norway. Thus the UK faces increasing exposure to price volatililty in line with the ongoing increase in gas import dependecy and delcine in gas storage capacity.

North Sea Revenue soars to £1.3 bn

The latest Government Expenditure and Revenue Scotland (GERS) figures show a rise from £266 million in 2016/2017 to £1.3 billion in 2017/2018.  Onsure tax take increased by £2bn, taking total revenue to £60bn. The figures also show that Scotlands deficit fell to £13.4 billion, when a geographical share of the North Sea is allocated to Scotland.

Premier Oil Net Profits Double to $98.4 million

Helped by a rise in oil prices, the Net profit of Premier oil more than doubled in first half of 2018. The British company annouced that its expecting output to reach 80,000-85,000 barrels of oil equivalent per day. Premier has also kept its target to reduce its pile of debt of an estimated $2.65 billion by $300- $00 million by the end of 2018.

Scottish Deficit still remains high depsite boost from oil taxes

The annual balance sheet is to be published on Friday and is expected to show high deficit figures depsite a boost from oil taxes. The deficit is still expected to hover around 8% of Scotlands GDP, more than three times higher than UK figure and is large enough for critics to accuse mismanagement of the economy. The UK government has reduced its deficit to 2.4%, the lowest since 2007 and below the international threshold of 3%. Scotland has been hit hard by the oil crash in 2014, as in 2016/2017 out of the £58 billion raised, only £208million came from North Sea Oil.

                       UnaCom Economic Round Up

                                       Monday 20th August- Sunday 26th August 

Drug Shortages will happen warns NHS Managers if a No Brexit Deal is reached

NHS Trust has warned that the health service is not prepared for a No Deal Brexit, and that as a result drug supplies could be effected. In a leaked letter to the head of NHS England and chief executive of NHS improvement, Chris Hopson (NHS Providers Chief Executive), said in the event of a no deal Brexit, that ' the entire supply chain of pharmaceuticals could be effected' and ' public health and disease control co-ordination could also suffer and our efforts to reassure, retain and attract the European workforce on which the NHS relies could also be jeopardised'.

UK Government asks Drugmakers to start stockpiling medications   

The government has asked manufacuters to start stockpiling their products, so that they can continue supplying UK patients if a no deal is met. Health Secretary, Matt Hancock, insists that good progress has been made in negotiations with the EU. He states that contingency plans have been made in the 'unlikely' possibility of a no deal scenario. This plan involves stockpiling a six week supply of medicines in case imports routes from the EU are affected. The ABPI has welcomed this guidance but stresses that stockpiling is just one detail of a plan and that more planning will need to be involved.

Roche signs new deal with GBT over Inclacumab 

Roche has sold its rights of Incalcumab to Global Blood Therapeutics, which it aims to develop the treatment for vaso-occlusive crises in patients with sickle cell disease. Regarding the terms of the deal, GBT is responsible for devleopment, manufacutring and commericalisation of the monoclonal antibody worldwide. Roche will recieve an up-front payment of $2.0 million and could potentially recieve up to $125 million in development and commercialisation milestone payments, as well as sale based royalties. Inclacumab was being developed to treat coronary heart disease but was ultimately discarded after Phase two trials.


                    UnaCom Product News Round Up

                                     Monday 20th August- Sunday 26th August

NICE Rejects Europes first allogeneic stem cell therapy treatment

NHS cost regulators for England and Wales have rejected funding for TiGenix and Takedas Alofisel, the first allogeneic stem cell therapy to be approved for use across the European Union for use in Crohns disease. In clinial trials of the drug it showed a 44 percent greater probability of acheiving combined remission compared to the placebo. In draft guidlines, NICE said that Alofisel only showed a  modest improvement in the patients tested. It aslo stated that reliable follow up results were only avaliable for one year, so its unclear how long the benefits will last. This balanced with uncertain cost estimates resulted in the committee not able to approve funding. Takeda has announced in a statement that it is "fully committed to collaborating with the IBD community, NICE and NHS England to identify any relevant data which may help to answer the questions raised in NICE’s draft guidance and allow them to make a positive recommendation".

Pfizers Lorlatinib designated a Promising Innovative Medicine  

Lorlatinib has been approved as a Promising Innovative Medicine for non small cell lung cancer.  The PIM award shows that regulators consider it a potenital candidate for the UKs Early Access scheme,which gives patients with life threatening or seriously debilitating conditions access to medicines before they are approved for use in Europe. In the next stage of the approval process, the Agency will issue an EAMS Scientific Opinion if the quality, safety and efficacy data provided in support of the application is sufficient to support a positive benefit/risk balance and added clinical value, paving the way for patient access, opening up access before a regulatory decision is reached.

Mixed Results for AstraZenecas Bevepsi AeroSphere 

AstraZeneca are pondering over the results of their phase three trial Bevepsi AeroSphere in patients with moderate pulmonary disease. In the trial it showed non inferiority to the current treatment out their created by GSK ( Anoro Ellipta). Head of Global Medicines Development said that the perfomance of Bevepsi AeroSphere is inconsistent with previous results and further analysis will be taken to understand and characterise these findings.

NICE clears the use of Steam Therapy for benign enlarged prostate 

A green light from NICE has allowed for men with benign prostatic hyperplasia to recieve a procedure called transurethral water vapour ablation on the NHS. The NHS watchdog has approved this treatment which involves using a needle to be inserted into the prostate to deliver steam to kill of excess cells and reduce the size of the prostate. This treatment can be seen to improve lower urinary tract symptoms, one to three months after treatment without impairing sexual function.

                                             UnaCom Product News


                                            13th August-19th August





NICE recommends NHS not to use Biogen’s Spinraza

The National Institute for Health and Excellence has advised the NHS not to use Spinraza for the rare genetic disorder spinal muscular atrophy (SMA). In its assessment it said that there was a ‘substantial benefit’ for the drug, but the commiteee felt there were ‘significant uncertainties, particularity around its long term benefits’ partnered with Spinraza’S extremely high cost, means it would not be recommended as a cost effective treatment option.

However, NICE has said that Biogen intendeds to develop a proposed managed access programme that might adresss uncertainties in the evidence and reduce financial risk to the NHS.

NHS Scotland approves four new medicines 

The Scottish Medicines Consortium has approved funding for four newly licensed medicines.

Tesaro UK’s Zeluja was accepted for use for advanced ovarian cancer. In trials, it was found to cut the risk of disease progression or death by 73%

Roche’s Alecensa, was approved for its treatment of a rare type of advanced lung cancer. It has been found by Roche to decrease the risk of progression of the disease by almost half and reduce the risk of tumours in the central nervous system by 84%

Sweden’s Orphans Ravicti was approved for its long term treatment of urea cycle disorders in adults and children. 

Pharmings Ruconest was accepted for the treatment of patients with the rare condition acute hereditary angioedema, which can cause painful and dangerous swelling anywhere in the body.

However it wasn’t all approvals for NHS Scotland with BioMarins Kuvan being rejected for concerns about long term benefits and cost effectiveness. As well as Vifor Pharmas Veltassa for the treatment of hyperkalaemia being rejected for cost effectiveness issues 

Lenvima gains approval in US for liver cancer treatment

Eisia and MSD’s Lenvima has been approved in the USA for the first line treatment of patients with unresectable hepatocellular carcinoma. The decision was based on results of the REFLECT trial in which Lenvima showed superiority compared to Bayers Nexavar.

NICE denies use of Perjeta after breast cancer surgery

NICE has stuck with its position that Roche’s Perjeta is not cost effective enough to be used by the NHS, post surgery to prevent breast cancer recurrence. The institute did not recommend Perjeta, it believes that further consultation is needed ‘to give people the opportunity to commit on updated cost effectiveness estimates’ which takes into account the costs of administering the drugs and the impact of cheaper biosimilar trastuzumab on reducing the overall cost of the Perjeta regimen. Evidence showed that adding Perjeta to the already tried regimen of trastuzumab and chemotherapy after surgery only made ‘ a small difference in the proportion of people who remained free of invasive disease and this effect itself was uncertain’. NICE also stated that the incremental cost effectiveness ratios for the drug are still likely to be higher than would normally be considered a good use of NHS resources.

                                    UnaCom News- An Economic Round Up

                                                                            13th August- 19th August

Astellas buys UK group Quethera

Cambridge based Quethera, a gene therapy group focused on the development of treatments for ocular diseases, has been acquired by Astellas 
As part of the deal, Astellas could pay up to £85 million in aggregate consideration for Quethera, which will then make Quethera a wholly owned subsidiary of Astellas.

Orchard raises $150 million to develop gene therapy pipeline

Orchard Therapeutics has raised $150 million for progression of registration of its three most advanced clinical programmes. The funding will also be used to support development of clinical and pre clinical of Orchards rare disease gene therapy pipeline. 

Novo Nordisk acquires UK group Ziylo

Novo Nordisk has acquired all the shares of Ziylo, a University of Bristol spin out. This deal gives Novo full rights to Ziylo glucose binding molecule platform which has been highlighted as a ‘key strategic area’ in its effort to develop the next generation of insulin. Specific details of the deal have not been revealed, but Novo said it will acquire all shares in Ziylo for an upfront payment and earn outs with contingent milestone payments and that total payments under the deal could overshoot $800 million.

                              Types of Investments

In my research of the economic news regarding the pharmaceutical industry, I came across lots of news regarding investments and financing with different companies providing series A, B and C funding. And with this being such an important component in the industry, with investments providing the means of progress in the industry in terms of new drug innovation, I dedided to explore what these investments mean and what they involve.

Investors look at companies and value it, considering management, track record and market size. Capital is raised and different rounds reached when the company begins to show; Increased probability of success, proof of concept and growth in market base. Investors that raise capital want in return shares of the business.

The first type of investment that is carried out in the very beginning is called Seed Funding. This is often carried out when the business consists of one person, or a with just a few business partners. It can mean that you already have a product that is selling well or have an innovative idea.The money would often be implemented to market research and development work. It would help the company figure out its product and what type of consumers they will be targetting. This type of investment is not as common as the other types we will see, mainly because it is seen as a risky move, since it is right at the beginning of a businesses life, there is no proven track record of success. That is why venture capital firms rarely particpate in this type of investing. The more typical type of investors that provide seed capital are angel investors. These tend to be affluent individuals who provide the capital wanted.

The first round of investing is the Series A funding. Series A funding is used when a business has made progress with seed capital, proof of concept, market size, quality of team. The funding is used to optimise the product and expand its market reach. The money typically provided ranges from $2 million to $15 million and is used to scale the product across different markets. Series A funding hopes to cover salaries of the people involved, additonal market research and finalisation of the product. Series A, is the most risky type of funding out of all the rounds.  The more typical venture capital firms partcipate in this type of funding more than angel investors.

The next round of investing after Series A is Series B. This is type of investing is for taking the product to the next step. This involes scaling it up, to face competitors and to have its own market share. Investment risk is lower at this stage and a greater capital is provided ranging from $7 million to $10 million. Series B involves the same venutre capital firms as in Series A, but also introduces companies that are more specialsied in the later stage of investment.

Series C funding involves investors providing capital for an already succesful business. Series C involves perfecting the business model and contuning to scale and expand it across all markets. This involves it looking to increase its market share by acquistions or developing new products and services.At this stage where investing is less risky, a lot of other players are introduced such as hedge funds managers, invesment banks and private equity firms. With the type of capital being reached raised ranging from  single digit to hundreds of millions.

              Unacom News- An Economic Round-Up

                                                   6th August-12 August 

Regeneron invests $100 million in BlueBird Bio for Research Colloboration

Bluebird Bio and Regeneron have announced a collaboration for the discovery, development and commercialisation of cell therapies for cancer. The collaboration will utilise Regenerons VelociSuite platform for discovery and characterisation of human antibodies, while Bluebird will contribute it’s field leading expertise in gene transfer and cell therapy.
They have selected six initial targets and will equally share the research and development costs up to the point of submitting an Investigational New Drug (IND) application. Additional targets may be selected over the five year collaboration and Regeneron will have the option of opting in to a co development arrangement with 50/50 cost and profit sharing. If Regeneron chooses not to join in, then they are still able to receive milestone payments and royalties from Bluebird on any resulting products.
A $100 million investment will also be made into bluebird by Regeneron. Creating Bluebird stock st $238.10 per share a 59% increase over the $150 closing price on August 3rd 2018.

Novo Nordisk reports a 4% Drop in Revenues in Q2

Novo Nordisk reported a 4% drop in its revenues in the second quarter. Sales fell to $4.3 billion, however profits rose 4% to $1.6 billion. The company had strong performance in its major brands with strong sales of Victoza ( +6% to $888 million) and Saxenda (+40% to $138 million)
The sales for the diabetes segment fell by 4% to $3.5 million which the company accredited to lower sales in North America.

AstraZeneca pays $110 million to Texas State in Law Settlement

AstraZeneca has agreed settle $110 million to the state of Texas regarding AstraZeneca’s drugs Seroquel and Crestor.  The Texas state initially wanted $5 billion for false and misleading marketing of  the two products.
The $110 settlement can be split in two amounts covering different areas. $90 million covers allegations that the company encouraged unapproved uses of anti psychotic Seroquel. With the Texas attorney General alleging that AstraZeneca gave false information regarding Seroquels efficacy for uses not approved by the FDA and misrepresented the drugs side effects and potent nature.
The $20 million settle covers the allegations of the misrepresentation of its anti cholesterol drug Crestor, making unsubstantiated claims regarding its efficacy and safety.
AstraZeneca has said in a statement that it ‘ makes no concessions or admissions of fault in the settlement agreement’

Ligand looking to acquire Biotech Company Vernalis 

San Diego based company Ligand is looking to buy UK biotech company Vernalis for $43 million. The proposed scheme, would involve Ligand paying Vernalis shareholders £0.062 per share in cash, valuing Vernalis at approximately $43 million. If Ligands offer is approved by Vernalis shareholders, the transaction is expected to close in October 2018.
Not only does it provide Ligand a European base but it would also provide the company with a portfolio of more than 8 fully funded partnered programmes including programmes in respiratory, oncology and CNS sectors.

Drop in Income for Merck in Q2 with new products providing steady sales growth.

Merck has reported a 42% drop in net income to €247 million for the second quarter but new products in Bavencio and Mavenclad have provided steady sales growth. Sales grew by 5.2% with Bavencio bringing in sales of $20 million up from $5 million and Macenclad seeing revenues of $23 million.  Merck has stated it expects exchange rates to have a moderate negative effect on net sales for the rest of the year  and is expecting declines of 3-5%. However this is lower than the previously forecast of 4-6%

                   UnaCom Pharmaceutical news 

                                                 6th August--12 August 

Collaboration between Immune Biosolutions and Janssen

Immune Biosolutions and Janssen, have announced a research collaboration. The research will explore the development of therapeutic antibodies in oncology. The partnership will use Immune Biosciences' Nebula antibody discovery platform to advance oncology targets that historically have been a challenge for therapeutic development. (Pharmatimes.com 2018)
The Nebula platform utilizes four families of technologies in a single platform to deliver antibody therapies.

MHRA announces Post Brexit Plans

Big news this week, is that MHRA, the British Regulations System, has announced how UK clinical trials rules will operate in a post Brexit Britain. As well as a document being released providing technical guidance on Brexit implementation, the MHRA has stated that during the Brexit transition period ( 30th March 2019–31 December 2020), EU rules and regulations will remain in place to provide continuity and certainty to businesses. The EUs new Clinical Trials Regulation (CTR) which is expected to be implemented in 2020, will apply to the UK in this time period. This new regulation is a ‘major step forward’ said the Agency. With it providing a streamlined application process, harmonized assessment procedures, a single portal for all EU clinical trials and simplified reporting procedures. If CTR is not implemented during the transition period, UK law will be aligned to with parts of the CTR that the UK government has control over.Thus giving researchers operating clinical trials greater certainty. What the UK would have no control over, is the single shared IT portal and participation in the single assessment model. These two elements would require a EU/UK agreement. The negotiations cannot be predicted, but the UK has made it very clear for close association and partnership with the EU.

New GSK Chief Financial Officer 

GSK appoints new Chief Financial Officer (CFO) Ian Mackay. Set to take over from Simon Dingermans, who is to retire in May 2019. This is one of many new additions made be recently appointed CEO, Emma Walmsley. Who has appointed Luke Miles as head of pharmaceuticals,Hal Barron as drug research and Karenann Terrell as head of digital operations. Ian Mackey comes with great financial experience, who was previously Group Finance Director for HSBC for the last 8 years.

Success for Pfizer Appeal 

NICE has reversed its decision of rejecting Pfizer’s Besponsa. A treatment for adults with a certain form of leukemia. An appeal was made by Pfizer against the decision to reject Besponsa, back in June last year.  The argument for NICE was that the clinical trials showed no survival benefit using Besponsa compared to the current treatment used. But it did note that those that were treated with the drug were able to have stem cell transplant and go into remission than those on standard care.

             The Brexit Effect- Oil and Gas Industry

Carrying on from my previous blog article on the effects of Brexit on the pharmaceutical industry, I decided to explore the effects of Brexit on other industries I find interesting.

In an already challenging environment for the Oil and Gas Industry, the result of Brexit adds further cause for concern.  Due to the global collapse of the price of crude oil, revenue across the the UK oil and gas supply fell by 10% in 2015 and 21% in 2016, taking the market below to below £30 billion for the first time since 2010.(ipaadvisary.co.uk 2018). With the introduction of Brexit,it presents three main problems: 1) uncertainty of the type of deal 2) loss of UKs ability to influence EU policy 3) distraction the process provides to the government's business as usual running of the economy.

The uncertainty around the type of deal has created issues for all industries. A 2017 report by trade body, Oil and Gas UK, looked into the potential economic impacts and opportunities that may occur from Brexit. It found that the UK does an annual £73 billion of oil and gas related trade with the rest of the world. Of this total amount, £63 billion relates to traded goods which may be subjected to tariffs. Under EU membership, the tariff costs are around £600 million. Depending on the type of a deal, the amount paid as tariffs can vary. A hard Brexit, would result in the UK reverting to WTO (World Trading Organisation) rules and this would result in the double the tariff costs. A softer Brexit, could allow the same tariffs and to continue to benefit from European ties while also having freedom to negotiate on the global scene. (Skuld.com 2018). A Hard Brexit would also bring complications to: 1) Investment in the UKCS, 2) Domestic gas prices 3) Exchange Rates and 4) Hiring of labor and other professional services.

An area of concern to the British Oil and Gas market is how Brexit will affect its appeal for investment. Improvements of efficiency in the last five years in the industry has been attributed to investment. This is seen mainly due changes in oil and gas price and exchange rate movements. Oil prices are considered to remain the most important factor to the level of investment in the UK .Investors  need to be assured that the oil and gas tax regime remains predictable and competitive. A plus of Brexit allows the UK government to have flexibility with levels of taxation, a benefit that the UK has already taken advantage of by promising to cut corporate tax rate to 17% by April 2020 compared to the EU average of 24%.
The exchange rate movement has a significant impact on oil prices. The GB£/US$ rate has had a decline from 2014 to 2017. And with the introduction of Brexit and all the complications it brings. It is likely to keep the exchange rate low and therefore push pressure on domestic gas prices in the UK. Thus the rate between the two will have an effect on the price UK customers  have to pay for their gas.

The UK has had a significant role in EU regulatory affairs, with it chairing agencies such as Agency for the Co-operation of the Energy Regulators (ACER)  and the Council for European Energy Regulators (CEER) for a number of years. Allowing the UK to have a hand in EU policy and to be able to influence regulatory developments. Brexit would remove UK from this positions and agencies and thus lose key influence. However this might not be too disastrous for the UK, as the UK is seen as a leader in Europe in its approach to the industry and many other countries try to follow the UK model. Good relationship between the UK and European countries will most probably continue.

The UK oil and gas industry  is reliant on the employment of people and provision of professional services abroad.  Depending on negotiations, there may be a hamper on immigration and recruitment of professional services and labour abroad. Effecting the efficiency of the operation of the industry. However there is a positive, in that additional training schemes will be required. And thus an opportunity for creation of new companies  to provide these resources.

A lot of the issues presented above depend on the type of deal reached, with particular emphasis on hard Brexit, thus a lot of what is discussed may not be as profound in the future.  Overall however compared to my previous article on the effects on the pharmaceutical industry, it does not provide as complicated effects as to the pharmaceutical industry which was so heavily intertwined  in EU regulations. The UK has been seen as the leader in Europe for its attitude towards the oil market and I believe post Brexit it will continue to do so.

                 The Pathway of Drug Development 

From my research across the industry and looking at the news regarding new products hitting the market, I kept seeing terminology such as ‘approved’ and seeing involvement from authorisations such as the EMA or the US FDA. It had me wondering what is the formal approach that pharmaceutical companies had to undergo for their products to reach the market.

Drugs have to be  subjected to rigorous testing and cost effective analysis. Every year we see groups of new drugs licensed but what we never see are the thousands of drugs that never make it through the whole process. The research and development journey of those new drugs that make it to the market will have taken around 12 years and cost around £1.15bn (pharmaceutical-journal.com 2018)

Drug creation: Research and Development

The journey first begins in university laboratory’s where researchers try to understand the process behind a disease on a cellular and molecular level. Through the understanding of the mechanism of the disease, potential treatments can be developed. Typically researchers discover new drugs through: new insight into the disease mechanism that allows researchers to design a product to stop or reverse this mechanism, many tests of molecular compounds to find possible beneficial effects and through new technologies such as those that can manipulate genetic material or target specific sites within the body. ( FDA.gov 2018) .Scientists after they have discovered the target in the disease mechanism will  look to natural compounds from plants and fungi and now more than ever using knowledge gained from the study of genetics and proteins to create new molecules using computers.

Thousands of compounds may be potential treatments at the earlier stages, but these numbers are whittled down to a smaller number through  rigorous testing. Compounds that show promise have further experiments conducted on them to see: how the drug is absorbed, metabolized and excreted, optimum dosage, best way to administer the drug, adverse side effects, how it acts on groups of people (gender, age, ethnicity) as well as how it compares with similar drugs out there. (FDA.gov)

The second stage undertook is pre-clinical research. Before testing the drugs on humans, researchers need to test the toxicity of the drug. These safety tests are conducted on computerized models, cells and animals.  Around half of candidates make it through this stage and these remaining compounds are ready to be tested in humans. In the UK, approval by the Medicines and Healthcare products Regulatory Agency (MHRA) is required before any testing in humans can occur. The company will put in a clinical trial application (CTA) which will be reviewed by scientific experts who will decide whether or not sufficient preliminary research has been conducted to allow testing in humans to go ahead.

The third stage is the clinical research stage.  This stage studies the way the drug will interact with the human body. The clinical trials will be split into three phases. The phase 1 trail tests the drug on a small group of healthy volunteers. Small doses of the drug will be administered to the group of 20-100 healthy volunteers who are closely supervised. The length of the study ranges to several months and the purpose is to investigate safety and dosage. From this stage approximately 70% of the drugs move forward. (fda.gov)

Phase 2 tests 100-500 patients with the disease and lasts from several months to two years. Purposefully a small amount of volunteers are chosen to avoid exposing a volunteer to a potentially harmful substance. The purpose of stage 2 is to investigate the efficacy of the drug and potential side effects.Most drugs that fail the clinical testing fail at the phase 2 trail, often because it’s found to be ineffective or have detrimental side effects. As a result approximately 33% of drugs move to phase 3 (fda.gov)

The final phase trial tests a much larger population of patients, often 1000 to 5000 across international sites. (Pharmaceutical journal.com 2018 ).The purpose of the phase 3 trials is to confirm the phase 2 findings on a much larger population and to identify the best dosage option. After all three phase trials have been completed, the clinical testing should provide data on safety and efficacy to demonstrate an overall benefit for the medicine to be able to be submitted for a licensing application.

After the drug has passed the clinical trials, the company has to submit it for marketing authorisation to the national regulatory authority. Within the UK, submissions are sent to the MHRA and USA to the Food and Drug Administration (FDA). However in Europe, submissions are often made to the EMA (European Medicines Agency), to obtain marketing authorisation for the whole of Europe rather than having to make individual applications to each country. The submissions to the marketing authority are a summary of the pre clinical trials and the clinical trials that were operated. With the summary detailing chemical makeup, results from the pre clinical and clinical, toxicity, manufacturing process and proposed labeling. (Pharmaceutical journal.com 2018)

In England and Wales even if approved, the process does not halt there. In order for the drug to be able to be distributed through the NHS, companies have to submit the drug to the National Institute of Health and Care Excellence (NICE). NICE assesses it’s cost  and efficacy to decide whether it is affordable  to be distributed through the NHS. Marketing authorisations can insist on further clinical trials to take place for pharmacovigilance  (post marketing safety surveillance). Or to be tested on specific targets like patients with complex medical problems that would have been tested on in the earlier clinical trials. This is very important as the clinical trials although extremely useful in providing the information cannot assess everything. The true state of a products safety evolves over the years that make a products lifetime in the workplace.  In the USA programmes are available that allow manufacturers, health professionals and consumers to report problems associated with approved drugs. The FDA also has the power to conduct either announced or unannounced routine inspections of its drug manufacturing facilities and has the power to shut them down.

A drug that shows promise for the foreseeable future will be patented by the company, so it means this company only had the right to market the drug exclusively. This is in order for the company to be able to recoup there development costs and to make a profit to cover the costs of drugs that failed during the testing process and to be able to continue innovation of new products. Due to the extensive testing and licensing period, half the patent period will usually have expired. Once the patent has expired, other companies have free reign to develop the drug. These companies must make sure that their drugs have the same dosage form, strength, safety, quality and intended use. (FDA. Gov)  because these drugs are comparable they don’t have to undergo clinical trials instead bio equivalence
studies are applied.

The relationship between drug manufacturers and regulatory agencies is becoming increasing open due to developments of drugs becoming more complex and expensive. As a result, regulatory authorities are demanding more information and agencies like MHRA and NICE have set up offices to provide advice and consultancy to these drug manufacturers to help ensure they generate the evidence they will need to have approval from these companies.

                UnaCom Product Development Round Up         

                                                      30th July- 5th August 

GSK on track for first paediatric treatment of severe asthma in Europe

The EMA has provided positive opinion on GSK's Nucala (Mepolizumab) as an add on treatment for severe refractory eosinophilic asthma in paediatric patients from the ages of 6-17. If approved it would be the first targeted biological therapy for the treatment of severe eosinophilic asthma in paediatric patients in Europe.

New Aegerion Treatment for Leptin Deficiency approved

The product Myalepta from Aegerion Pharmaceuticals has been approved by the European Commission to be a supplement for diet as a replacement therapy for the treatment of complications of leptin deficiency in lipodystrophy patients. This approval makes Myalepta the first and only licensed medication to treat the underlying deficiency at the heart of lipodystrophy. This is a massive step forward, providing a treatment for one of the most fundamental aspects of the condition.

Pfizer's new Ulcerative Colitis treatment and first oncological bio-similar approved by EMA 

The EMA have approved Pfizer's, Xeljanz for Ulcerative Colitis (UC) making it the first oral therapy and inhibitor to be approved for its patient population. Xelijanz has had two previous approvals for rheumatoid arthritis and psoriatic arthritis. Pfizer's, Trozimera has also been approved by the EC. It is an oncological drug and the first oncological bio-similar to be approved for Pfizer. It could have the potential to help patients with cancers such as breast and gastric. A bio-similar is a drug designed to have active properties similar to one that has been previously licensed.

Novartis gains approval for Europe's first Migraine Treatment

Novartis has had its new Aimovig drug (erenurmab) approved by the EMA, making it Europe's first treatment designed specifically to prevent migraines.

                UnaCom News- An Economic Round-Up

                                                                             30th July- 5th August

Sanofi starts stockpiling drugs due to uncertainty around Brexit.

Due to mounting uncertainty around the type of Brexit deal being reached, numerous drug companies have begun to take matters into their own hands. Depending on the arrangements reached, Brexit could cause massive disruption to the transport of the drugs between the UK and the EU. With border checks and delays disrupting the manufacturing and marketing process.As a result companies like French owned Sanofi have joined the ranks of AstraZeneca and MSD (Merck and co) in stockpiling medicines.
Sanofi a large producer of insulin and vaccines has created a 14 week supply starting from April 2019 an increase from its usual 10 week supply. These preparatory actions for a no deal outcome show that they are expecting problems and are taking actions to ensure that any disruptions does not affect patient safety and ensures there is a sufficient supply of their drugs in the UK market. (Guardian.co.uk 2018)

GSK Invests £228 million dollars into gene profiling group 23andme

GSK  will invest £228 million in  Google backed gene profiling group 23andme. The  four year collaboration between the two companies, will hopefully propel GSK to ‘Microsoft of the pharmaceutical industry’ as they stated decades ago (Guardian.co.uk) . GSK hopes to gain insights into gene data of 5 million users of 23andme, and thus be able to use this research for development of innovative medicines. GSK will have access to its drug database  and propriety statistical analysis to improve drug target discovery.R&D will improve target selection to allow precise medicines to be discovered and allow for more effective identification and recruitment of patients for clinical studies. (GSK.co.uk 2018)

Roche reports strong showing in the first half of 2018

Roche has reported strong performance in the first half of 2018. Group sales rose 7% to CHF (Swiss Francs)28.1 billion and core EPS grew 19%. EPS (earnings per share) tells how much money the company is making in profits per every outstanding share of stock. It tells how much money is flowing down to stockholders. The higher the EPS, the more money your share of stocks will be worth because investors are willing to pay more for higher profits. (Nasdaq.com 2018)
The rise in group sales by 7% can be down to recently launched medicines Ocrevus, a medicine used to treat two forms of multiple sclerosis, and cancer medicines Perjeta, Alecensa and Tecentriq. 
US sales increased by 15% led by Ocrevus, supported by demand from patients. A 27% increase in Perjeta occurred due to its use for patients after treatment with early breast cancer. 
In Europe (-8%) the success of Ocrevus and Perjeta offset declining sales of Rituxan/ MabThera. 
Roche CEO, Severin Schwan, commented on the strong results of the Pharmaceutical and Diagnostics Divisions and stated that Roche is ‘well on track to rejuvenate our portfolio’. They are increasing the outlook for the full year 2018 to mid single digits sale growth and core earnings per share to grow in the mid teen digits at constant exchange rates. (WorldPharmaNews.com 2018)

Almirall secures US Dermatology portfolio in $650 million deal 

Spanish company Almirall secured the dermatology portfolio of Allergan for $650 million dollars. With an upfront cash payment of $550 million and a potential earn out of up to $100 million payable in 2022 based on the performance of the portfolio. The deal covers the drugs such as Aczone and Tazorac in treatment of acne as well as the new, promising drug Seysara a treatment for moderate to severe acne vulgaris in patients 9 years old.  This acquisition secures Almiralls' position in the American dermatology market - the worlds largest market-

Brexit- What Does It Mean For The Pharma Industry?

The Pharmaceutical Industry is hugely important for the British and European Economy, with it accounting for 10% of the GDP for the UK and Europe's most researched industry. However with rising uncertainties about the type of deal being reached. What consequences does this spell out for the UK and the EU?

After watching an episode of Newsnight a few weeks ago, regarding the effect of a no-deal outcome on the pharmaceutical industry, I started to think about the effect this will have on the industry and the measures that companies will have to take to ensure they stay competitive in the market.

The pharmaceutical industry is a massive component of the British economy, it is the third largest industry in the UK, accounting for 10% of GDP and the employment of 73,000 people (pwc.com 2018). The UK is a massive exporter of pharmaceutical products to the EU, with 45 million packs of medicine going from the UK to the EU each month. (Newsnight 2018)

The uncertainty around the type of deal is causing issues with what action the pharma industry needs to take .The pharmaceutical industry is heavily intertwined and dependent on EU regulations and funding, more so than other industries. Out of the potential deals possible an EEA agreement (Norwegian Option) creates the least amount of disruption, it would not affect trade and would allow the UK to retain access to the EU market and participate in trials. As a part of this deal the UK could authorise the same EU legislation which gives automatic approval for EU marketing decisions. However any of the other trade agreements including a bilateral , free trade or no deal creates complications. The BioIndustry Association (BIA) has created 4 main areas of concern; 1) Regulations of medicines, 2) Research collaboration and funding , 3) Movement of people and 4) Trade and Supply of medicines. 

The single most important issue is regulatory alignment. At the moment all drugs are approved by the European Medicines Agency (EMA) and automatically granted access to the UK market. But with Brexit this changes, as a result there will have to be duplication of all the testing of products that come from the UK to the EU and vice versa. Double the amount of applications will have to be made for the same product for the EU and UK market, leading to significant increases in cost. This would require changes in the analytical methods,changes in packaging,transferring paperwork and potentially replicating key members of staff in Europe. A long, arduous process that would take away from the  main focus of making sure patients receive their medicine (Newsnight 2018).In some cases this could mean that companies would not get this all done in time for future products and would not be able to export to Europe, losing huge amounts of money. These extra costs and uncertainty could mean if there is a choice between EU and the UK, other countries like Japan and America could choose the larger EU market. There are also particular issues with smaller companies that are involved in helping other companies get their medicines in dosable forms and making and supplying drugs for clinical trials. Depending on the deal, these drugs may need to be tested and released into the EU by someone else. Some companies have been looking for companies within the EU that have similar analytical testing capabilities, while still hoping to keep the manufacturing in the UK. However this creates frustration within the UK industry as they are creating the innovative new science then handing the knowledge to competitors in Europe (Newsnight 2018). It could lead to companies having to build their own facilities in the EU, creating extra costs for the company.

The second biggest interruption to the industry would be to research and development.The UK spends nearly a fifth of pharmaceutical R&D spending in the EU (Pharmaceutical Technology 2018). The concern  with Brexit is that companies will move their R&D bases elsewhere  and the UKs leading role will diminish, affecting the ability to recruit the best international talent.  Brexit scenarios could mean that the UK will no longer continue to have access to the EUs research and innovation programmes like Horizon 2020.Negation of the UK in these projects, takes time and multinationals might transfer to key research projects  outside the UK to continue to participate in international research. 

There are some positives, as the UK is not bound to strict tax regulation and would have the flexibility to enhance a favourable tax regime for innovative activities to attract new investments without running into illegal states and risks (pwc.com 2018). This could be a competitive risk for Europe.Also recent progressions have shown positivity, such as David Davis stating the UKs involvement in Horizon 2020 as "quite likely" and with the UK biotech industry attracting the most venture capital financing in Europe and the third most in the world. With such a strong position, high levels of investment is expected after Brexit (Pharmaceutical times 2018). A UK exit is also unfavourable for the EU with decreased contribution to the EU budget, including research funds. Any future programmes would be impacted by a lower EU budget and European pharma companies would have to compete for a smaller amount of research funds.

Source: "The Pharmaceutical Industry in Figures", 2016, European Federation of Pharmaceutical Industries and Associations

Brexit affects the supply chain infrastructure, opting out of EU trial regulations would make clinical trials more costly and result in a drop in the number of trials run in the UK. With the UK, being the most popular location for phase one trials, companies could move to EU countries to give access to a larger market (pwc.com 2018). Without proper regulations in place, pharma exports and imports could end up stuck in  customs warehouses. Disruptions to trade will increase  product prices as well as a weak currency which will raise the price of imports. Linking back to regulations, if no longer the same, companies may have to set up separate trials for the UK, leading to higher costs. The European Medicine Agency(EMA) regulates the access of medicine to EU member states and is currently based in London but would need to be be relocated. It’s presence in the UK, is one of the reasons why influential international companies choose to base their  European headquarters in London. It is unlikely that the UK can keep medical authority and long term benefits of being situated close to the EMA. (pwc.com 2018) 

A large number of the UK pharma force are EU nationals, who could leave the UK after Brexit. With these nationals being tempted away by involvement in research projects funded by the EU and clinical trial operations moving to Europe, coupled with a weak pound, it would be hard to attract skilled talent from all over the world. Thereby reducing the UKs influence in the industry, therefore it is important to have a UK immigration system that can attract skilled talent while developing UK talent,

Over the  coming years, pharma companies face challenges in adapting to these changes and with the uncertainty about the type of deal being approached, they have to  cover all possibilities ,to make sure they stay competitive in the international markets .

Links to the articles used for further information:

Brexit Monitor the Impact on Pharma and Life Sciences: https://www.pwc.nl/en/brexit/documents/pwc-brexit-monitor-pharma-life-sciences.pdf

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