What is the role of patents in the pharma industry

The Debate

Patents are exclusive property rights in intangible creations of the human mind. The vital point of a patent is that the product, manufacturing process or device must have never previously been disclosed anywhere in the world and something that would not be obvious to a person ordinarily skilled in the field before.

Patents are an integral part of the pharmaceutical industry. They have a huge role in preventing market failure and for keeping investment high in research. Medical innovation requires an extremely high amount of financial capital, with the Association of the British Pharmaceutical Industry placing the cost for drug discovery at approximately £1.15bn per drug. They prevent market failure because they provide an incentive for companies to invest these huge amounts of money so they can experience a 20yr period where they do not have to face government price control or competition.

Patents differ from industry to industry, with patents shared in the electronic industry through pooling or cross-licensing. This occurs because a given product often contains many patented technologies. To contrast, in the chemical and pharma industry the patent normally equals the product and protects the extensive investment in research and clinical testing required before placing it on the market.
The pharma industry has a very particular characteristic that sets it apart from other tech-based industries. In many other tech based industries it is possible to keep inventions a secret until they are marketed. This enables companies to delay patent filings until the last possible moment and therefore maximize the effect of the 20yr patent run. However, the culture of the medical research industry emphasizes early disclosure of inventions, usually long before the product is placed on the market. This is because scientists working in the medical research field have an obligation to share their findings as soon as possible with peers, so that their peers can also benefit from the research in their own work. Thereby there is a lengthy time period between patent filing and placing a product on the market, which means pharma companies receive far shorter periods of patent exclusivity than other tech companies.

However, patents have come under attack as patent protected drugs face no price caps or competition for 20 years and they have come under criticism for reducing patient’s accessibility to the latest treatments because they cannot afford them. There have also been arguments that patent protection can also cause incentive issues, as patents can be bought and sold. Therefore, certain companies have adopted the strategy of purchasing licenses and hiking up the drug price instead of investing money into new medicine research instead.

The Process

As previously stated, that product etc must have never been disclosed anywhere in the world and not be something that was obvious to someone working in the field. In order for this to be determined, the claims of the patent is compared against bodies of published literature, including previously issued patents. This process is called examination and assures that no one is able to claim patent rights on anything that is already in existence.

Patents are territorial in nature and exists only in the national jurisdictions in which the patentee has applied for and received recognition of there property rights.
Every country with a patent system has a national patent office where claims of inventors may be made a matter of public record. In most countries there is a detailed examination process before the inventor is given any rights, but some countries delay the examination process until a dispute over infringement arises. However even in these countries, a search of the prior art is often conducted as part of the registration process and the search results are published so that members of the public can assess the claims made by the registrant.

Patents can only be applied to ‘useful’ inventions. Patent applicants need only to supply a single operable use of the invention that is credible to persons of ordinary skill in the art. This can present some issues in the pharma field, as inventors often synthesize compounds without a precise knowledge of how they may be used to achieve a practical working result. To also be patentable, a pharma invention must be considered ‘novel’ and ‘non-obvious.’ To be considered novel, the invention must not be wholly anticipated by other public domain materials such as publications and other patents.

The first step for applying for a patent is preparation of the application. The application must be accompanied by a filing fee and must contain a specification of the invention. First the specification must enable persons of ordinary skill in the art to which the patent pertains to make and use the invention. Second the specification must contain a written description of the invention, sufficient enough to show that the inventor was in possession of the invention at the time the application was filed. And finally, it must detail the ‘best mode’ contemplated by the inventor of practicing the invention. Most importantly the specification must conclude with one or more claims the boundaries of the invention that the inventor claims as their own.

Once the application is completed it is sent to the countries patent office, such as the USA’s USPTO. It will be forwarded to an examining group who have expertise in that sort of invention. A supervisory patent examiner will assign the application to an individual examiner who will review it and conduct a search of the prior art.

The examiner must notify the applicant of their response coined an Office Action. If the claim is rejected, then the examiner must publish a case of unpatentability by a preponderance of the evidence. If a rejection has resulted, a patent attorney will usually respond by either amending the claims or asserting that the rejection was improper. If the examiner still remains unconvinced, they will issue a second Office Action termed Final Rejection. The applicant normally has three responses; 1) Abandon the application 2) Persist in prosecution by filing a so called ‘continuing application’ 3) Seek review of the examiners action by filing a petition to the Commissioner or appeal to the Board of Patent Appeals.

Types of Patents

There are a variety of pharmaceutical patents that inventors can apply for and they include:
  1. Product patent: This claims that the active ingredient is a new chemical entity and this claim is regarded as the superior claim. If there is a product patent, then no-one other than the patent holder or licensee can make, sell or import the product.
  2.  Product by process patent: This type of claim ‘claims’ a chemical or other process used to manufacture the drug, whenever the drug is made by the manufactured process. It is regarded as the next best claim, as it also confers protection against importation of a product. But the drug can be made and sold if another company devises a commercially viable process not covered in the patent
  3.  Process patent: This covers the process used to manufacture the drug. The chemical product itself is not covered.
  4. Formulation patent: Claims the pharmaceutical dosage form on the drug. It may take the form of formulation of a particular drug or class of drugs or a general formulation applicable to many drugs with different actions such as slow release technologies etc
  5.  Method of use: This covers the use of the drug to treat the disease

Astellas enters into the gene therapy market with $3bn acquisition

Astellas has announced its acquisition of Audentes Therapeutics for $3bn, adding a late-stage candidate for a rare disease into its portfolio.

This move fits well into Astellas recent strategy of streamlining its R&D operations, where it has been cutting programmes and staff to focus on its self-proclaimed key areas of immuno-oncology, cell therapies in ophthalmology and mitochondria-targeting small-molecules for neuromuscular diseases.

The Audentes deal not only provides gene therapy as a fifth platform technology but also a neuromuscular treatment, AT132, which is a candidate for the treatment of X-linked myotubular myopathy (XLMTM). XLMTM is a rare, genetic, neuromuscular disorder that causes muscle weakness that can range from mild to life-threatening.

As it is a rare disease, XLMTM only affects approximately 40,000- 50,000 newborn males, so there is a small indication. However, as Audentes treatment is a gene therapy, it will command high prices, as shown by Novartis spinal muscular atrophy therapy, Zolgensma, which is now the most expensive drug in the world, pushing the therapy to $160m in sales in its first full quarter in the market.
Astellas stated that gene therapy will be a ‘key driver’ for the company in the future and intends to let Audentes operate as an independent subsidiary, allowing to keep its flexible operation but also to tap into Astellas scientific resources. A benefit for Astellas is the fact that Audentes comes with its own gene therapy manufacturing site, a high valued asset considering the lack of production capacity for gene therapies.

Analysts say that Astellas did pay a premium for Audentes, at a quoted value of 110% premium on the share value. However this follows the recent trend of gene therapy acquisitions such as Novartis $8.7bn AveXis takeover and Roches $4.3bn takeover of Spark Therapeutics.

Amgen raises its 2019 forceasts after successfully completing $13.4bn purchase of Otezla

The $13.4bn deal was in response to competition authorities imposing a key requirement onto the proposed BMS/Celgene acquisition to divest Celgene’s blockbuster Otezla.

Otezla has continued to perform well, growing 26% to reach $1.6bn across its psoriasis, psoriatic arthritis and Behcets disease indications last year and continuing to a total tally of $1.43bn in the first nine-months of this year.

Amgen in response has raised its full year sales forecast to $23.1-23.3bn, with Amgen stating it now expects “at least low double-digit percentage Otezla sales growth, on average…over the next five years.”

Amgen also plans to build the scope of Otezla by entering the drug into ongoing trials such as genital psoriasis and paediatric plaque psoriasis, potentially expanding the eligible patient population. Otezla also fits well into Amgen’s current portfolio of psoriasis and anti-inflammatory product range which includes Enbrel and Amgevita (biosimilar of AbbVie’s Humira, which is approved and already available in Europe and approved ahead of a likely US launch in 2023).

Celgene/BMS will continue to produce Otezla finished goods for Amgen under a contract manufacturing agreement for up to two years, which can be extended. With the other agreement also being workers joining Amgen from Celgene as a result of the takeover

Novartis unveils its long-term strategy highlighting 25 potential blockbusters

At a R&D event in London, Novartis unveiled their long-term growth strategy, highlighting 25 or more potential blockbusters.

Among these products are a group that are set to enter into pivotal trials in the coming year. These products have been fastracked by Novartis due to belief they address areas of significant unmet need. Some of these products include:

·       MBGG453: a first-in-class anti- TIM-3 mAb which is currently advancing into a pivotal phase 2 programme in myelodysplastic syndrome. With phase 1 data due to be presented at the upcoming ASH 2019 conference.

·       Iscalimab (CFZ533), a monoclonal antibody (mAb) which has the potential to become the standard of care in transplants, as well as demonstrating a positive proof-of-concep tin Sjogrens syndrome, which can cause rheumatic autoimmune diseases.

The pharma company not only has promising early stage products, but also has an impressive series of late-stage pipeline phase 3 readouts and launches to announce, which are to be used to drive mid-term growth. These launches include:

·       Ofatumumab (OMB157): A novel treatment for relapsing multiple sclerosis which has produced new analysis demonstrating a reduction in confirmed disability worsening.

·       Canakinumab (ACZ885), AN 1L-1 beta mAb for non-small cell lung cancer, which as trials being recruited in both the first and second line settings and plans for regulatory filings in 2021.

Rounding of the day with a big announcement, Novartis announced that it has 90 new emerging molecular entities (NMEs) from its Institute for BioMedical Research, creating a diverse portfolio for the company. This implies that Novartis plans to make 80 significant submissions to regulators for approvals from 2020-22 in the US, Europe, Japan and China, an improvement from its 60 submissions it reported lasted year for the period of 2019-21.

Novartis confirms $9.7bn takeover of The Medicines Company

MedCo is a company that has produced an inhibitor that lowers cholesterol by blocking the synthesis of PCSK9 in the liver rather than targeting the protein itself. It acts via a mechanism that can be given as a subcutaneous injection initially and then again at three months and every six months thereafter

MedCo’s Inclisiran is seen as a serious competitor and disrupter to the market, particularity Amgen’s Repatha and Sanofi/Regeneron’s Praluent. Especially in the sense that Inclisiran has the benefit of a twice-yearly dosing schedule and data demonstrating it can reduce cholesterol even in patients on maximum does of statins. While Repatha and Praluent are dosed much more frequently either monthly/bi-monthly.

Novartis has obviously seen the promise in MedCo and has agreed to pay $9.7bn for the company, which amounts to $85 per share. Novartis is betting on the growth potential of inclisiran, where analysts have suggested it has blockbuster potential if approved for a wide patient population.
Repatha and Praluent have been struggling this year with payer resistance stinting growth. The respective developers have sinced offered discounts ranging from $14,000 per year to $6,000. This presents interesting food for thought for Novartis as it considers the price it will be on offer for inclisiran if approved.

According to Bloomberg, analysts have responded well to this announcement as Inclisitan fits very well into its current cardiovascular portfolio along with Entresto. Inclisirans planned approval is set to be completed before the end of the year in US and in Europe for the first quarter of 2020. If this all goes to plan, Novartis expects inclisirian to start to contribute to group sales from 2021.

The UK Competition Authority raises worry about Illumina’s $1.2bn takeover of PacBio

The Competitions Market Authority (CMA) has raised concerns that the proposed merger between Illumina and Pacific BioSciences  will lead to a loss of innovation in the DNA sequencing market.

Illumina is one of the worlds leading companies working in genetics and they provide next generation DNA sequencing to a number of leading organizations all over the world. One such project is the 100,000 genome project, ran by Genomics England. This shows how important the work that Illumina provides is, as its DNA sequencing aides in projects that tackle to research genetic diseases producing innovative personalized solutions.

Illumina holds 80% of the global market share in DNA sequencing, with a 90% share in the UK alone. The CMA concludes that a merger between Illumina and PacBio will cause a loss of competition between the two companies, leading to a reduction in alternative DNA sequencing systems, which ultimately leads to less choice, higher prices and/or lower quality of products. Furthermore, because this market is extremely concentrated, the CMA is also worried that a deal between the two would also lead to a decrease of innovation in the market.

Further supporting the CMA’s case, is that in the investigation between the two companies, it was found that PacBio is one of Illumina’s closest competitors, with internal documents from the companies referring to each other as competitive threats.

Illumina had hoped to close the transaction in mid-2019, but the way things are progressing it seems like they have a long time to wait just yet.

French government adamant on imposing sanctions on pharmaceutical companies that report shortages.

Medicine shortage has increased exponentially over the past decade, the reasons for this can be accounted due to the outsourcing of production to subcontractors located in counties where the quality controls are not as strict as in Europe, resulting in more and more frequent supply disruptions.

The National Agency for Medicines and Health Products Safety (ANSM) has previously charged a hefty financial penalty of EUR 348,623 to a pharmaceutical company because it breached its obligation to supply the market in a continuous manner. The ANSM stated that the company has not planned any shortage management plans, presenting a serious and immediate risk to patients.

The ANSM hoped that this decision will underline the responsibility that pharma companies have in regard to supply distribution with response not only vital for the wholesalers.

The above events occurred in February 2019. The Health Secretary of France as of July 2019 is setting up a select committee to help her implement her plan for pharma companies. She hopes to strengthen the ANSM powers to sanction manufacturers who do not have shortage management plans. With penalties for each day of shortage reaching up to a maximum of 30% of the average daily turnover in France.

Roche finally sees glimmer of hope with progress in Spark Therapeutics deal

After continuous delay there finally seems to be progress for the clearance of this $4.3bn deal by the FTC. According to reports made by Reuters, the FTC has cleared the deal without any product divestment requests.

Roche has had its eyes on Spark Therapeutics and in particular its gene therapy platform since it unveiled its plan to takeover in February early this year. Roche has been reaping success with its new product Hemlibra to prevent bleeding episodes in Hemophilia A. It was approved in the US in late 2017 and has been steadily gaining in market share, with sales of $927m in the first nine months of 2019.

When the FTC started to request for further information from Roche about the deal, analysts suspected that it was because of the overlap of expertise in the Hemophilia market, with gene therapy seen as the next big thing in the market and competition authorities are concerned it would give an unfair dominance in the market.  

This worried investors as it showed a greater scrutiny from the FTC that has not been seen before as the gene therapy from Spark Therapeutics is still in clinical development with no guarantee of success and it already has a clear market competitor from BioMarin’s valoctocogene roxaparvovec.

Since this second request sent in June, Roche and Spark Therapeutics have delayed their tender offers multiple times and have now set a final deadline of October 30. It has not fully received the official stamp of approval from the FTC just yet, as top officials from the agency’s Bureau of Competition will now weigh in as well as five commissioners required to vote in favor as well.

The FTC is not the only competition authority that has had doubts with the merger. The UK Competition and Markets Authority also has an open investigation into the deal as well. It has launched a merger inquiry and set the deadline for phase 1 on December 16th. However, there could be even further delays in the merger is a phase 2 investigation is opened. Roche in their Q3 results, have announced that they expect the deal to close by year end.

This scrutiny reflects a change being experienced in the M&A sector in the pharma industry as Bristol Myers Squibb and AbbVie have both been subjected to the same scrutiny from competition authorities with regards to their respective deals, with Bristol Myers Squibb subject to mandatory divestments of Celgene’s Otezla, in order for the deal to be approved.

AstraZeneca returns to form with success in Cancer portfolio and rapid growth in China

AZ’s lung cancer drug Tagrissio has already established itself as AZ top selling medicine, in the third quarter it grew sales by over 13.6% over the previous period to $891m surpassing analysts’ predictions by 4%.

Following suit is its immunotherapy treatment Imfinizi, which joined the blockbuster club, with its sales in the first 9 months reaching $1.05bn.

Tagrisso’s US sales grew to $350m in Q3 from $300m in Q2, with over half of that growth attributed to an increase in demand. The continued success of Tagrisso is also dependent on its performance in other markets particularly China, which has been a major contributor to AZ recent success, contributing 21% to AZ top line year to date. As of September, Tagrisso has Chinese approval in new patients with EGFR-positive non-small cell lung cancer (NSCLC). EFGR mutation in NSCLC patients is extremely prevalent in China standing at around 30-40%, more than any other country in the world.

AZ had expected growth to slow down in China in the second half of the year, but its Q3 results show that the country still turned up an impressive 40% increase at constant exchange rates. This does not mean the obstacles in China have disappeared but have only been delayed. The reason why its obstacles delayed is because the national rollout of a bulk procurement programme that is meant to cut prices of some of the older medicines was slower than expected.

AZ Imfinzi and Lynparza are set to face competition from rivals Bristol Myers Squibb and GSK respectively. CEO, Soriot announced that it doesn’t want people to think AZ is planning to become an oncology specialist company, stating that AZ has a very broad base of progress across therapy areas, meaning AZ is less exposed to something wrong happening with one product or another.

J&J Opioid trial still to go ahead as settlement talks stall

This would be the first federal trial for the case in the US, despite attempts from J&J to avoid this scenario as it tried to negotiate last-minute settlements estimated to reach $50bn. This $50bn would include cash, supplies of medicines including drugs to treat opioid addiction and overdose and distribution services, (sources seem to indicate $22bn in cash and $29bn in products and distribution)

The primary reason why this settlement was negotiated was because the court was unsure with how the proceeds would be distributed. US District Judge, Dan Polster, has been eager for an out of court settlement in-order to save both sides from the hefty cost of litigation. He has a huge task ahead of him as he presides over thousands of lawsuits accusing J&J of fueling a healthcare crisis responsible for approximately 400,000 deaths from 1999-2017.

Three of America’s largest wholesalers are offering $18bn over 18 years and J&J is offering $4bn. Teva pharmaceuticals another company with lawsuits filed against it for the crisis, is in a dire situation at the moment regarding its financial health and is desperate to avoid any cash settlements instead offering drugs and distribution services.

Lawyers representing the 2,600 plaintiffs have stated that when assessing settlements is that they provide urgent needed relief in the near term and that the resources will be exclusively used towards efforts to abate the crisis.

AbbVie hit with an unexpected £673m Irish tax bill, further complicating Allergan merger

AbbVie has been dealing with obstacle after obstacle regarding its proposed Allergan merger, as the FTC again recently requested a second request for information on the deal, highly indicating that AbbVie will have to sell of further assets to meet regulators’ approval.

Last week, Ireland's minister of Finance, Paschal Donohoe introduced new measures targeting mergers made through ‘share cancellation schemes.’ In those deals, which were not previously subject to the countries 1% stamp duty, Irish companies would dissolve existing shares and issue new stock to the acquiring firm to complete the deal. This would amount to £673m for AbbVie. If AbbVie were to walk away from the merger, they would have to pay a termination fee, valued at £1.62 billion, over double the stamp duty fee.

AbbVie and Allergan have both already taken precautionary measures to clear anti-trust hurdles, including Allergan volunteering two of its drugs that overlap with AbbVie products in the inflammatory disease and pancreatic enzyme markets.

GSK forms cell therapy agreement with biotech star Lyell Immunopharma

GSK has formed a 5-year R&D cell therapy collaboration with Lyell Immunopharma to further its efforts to treat solid tumours. GSK already has a foot in the cell therapies market, through its relationship with Adaptimmune, which gave it control of a midphase autologous T cell candidate.

GSK has not been forthcoming with the financial details of the agreement, but they have expanded upon the goals of the collaboration. They hope by working with Lyell, they will develop new technologies that will improve cell therapies, notably by expanding their use beyond blood cancers.

Lyell has a low profile among rising biotech’s, but it has grown quietly into a major player. It was founded by Rick Klausner, former founder of Juno Therapeutics and GRAIL. He has surrounded himself with leaders from organizations such as Kite Pharma, Juno, the Fred Hutchinson Cancer Research Centre and the National Cancer Institute.

The team is developing technologies to address what it sees as the three main barriers to the creation of “reliable, curative adoptive cell therapies for solid tumours.” The activities of Lyell Immunopharma can be split into three separate actions. 1) Redefining starting cell therapies, 2) Modulation of T cells so they stay functional in the solid tumour micro-environment and 3) To control the specifity and safety of T cells aimed at solid tumour targets.

J&J ordered with $8bn judgement for man experiencing breast growth due to taking Risperdal

J&J has been ordered to pay $8bn in damages to a US man who claims that that he was not warned that taking Risperdal could lead to experiencing breast growth. A jury in Philadelphia agreed that Janssen did not suitably emphasize the risk of the use of Risperdal in male children can cause enlarged breasts (known as gynaecomastia.)

J& will appeal the case, citing that the payout is grossly disproportionate. They also stated that they were not able to show the court key pieces of evidence to the jury that would have shown how Risperdals label outlined the risks of the drug.

The man, 26yr old Nicholas Murray, started to take Risperdal in 2003 after being diagnosed with autism spectrum disorder. Risperdal is not approved for that particular use but was pre-scribed off-label , something that is not illegal in the US based on a physicians judgement. He was originally awarded $1.75m back in 2015, but that was reduced to $680,000 after an appeal last year that upheld the original verdict.

J&J has stated that the award for a single plaintiff “is a clear violation of due process and US Supreme Court precedent dictates that punitive damages awards that are double digit multiplier of the compensatory award should be set aside.”

This is not the first lawsuit J&J has been hit with recently, with a series of lawsuits filed over the last few years claiming damages which have occurred with asbestos in talc, hip replacement and vaginal mesh products and opioid drugs all appearing in the court. In August this year it was found responsible for fueling the opioid crisis in Oklahoma and charged $572m and J&J also agreed to $20m in Ohio over similar terms.

UK immunology company MiroBio launches with £27m fundraising

MiroBio, a new UK start-up, raised £27m in its first-round financing for its antibody therapies for autoimmune and inflammatory disorders.

The company was created to further explore the discoveries that were made at the laboratory of Simon Davis, a professor of molecular biology at Weatherall Institute of Molecular Medicine and Richard Cornall, professor of clinical medicine at Oxford University. They will use their experience of 15 yrs of study into immune-signaling mechanisms at the cell surface to provide scientific aide to MiroBio.

The company will research into the development of therapeutic antibodies that can “reapply the natural brakes” of the immune system that are faulty in auto-immune diseases. With MiroBio stating that its antibodies will target the underlying cause of diseases unlike current therapies such as TNF inhibitors.

The company’s series A financing was co-led by Oxford Sciences Innovation, Samsara Biocapital and Advent life sciences. The money will be used to accelerate its lead programmes, strengthen its proprietary platform and build its management team for the next stage of growth.

MiroBio is currently the eight company to spin out of Oxford University this year, following in the steps of others such as antibiotic specialist GyreOx and DNA assembly company Lime Biosciences.
Figures published earlier this year by the Bioindustry association show that the UK pharma industry is still healthy and receiving good amount of investment despite the uncertainty caused by Brexit.

Johnson & Johnson secures FDA’s breakthrough therapy designation therapy with prostate cancer drug

The FDA approved J&Js PARP inhibitor niraparib, a breakthrough therapy designation (BTD) in prostate cancer, helping it to make gains on rival Lynparza.

J&Js subsidiary Janssen has exclusive rights to the inhibitor, which is currently marketed in the US by GSK under the name of Zejula with indications for the treatment of ovarian, fallopian and primary peritoneal cancer. Janssen achieved its hope to expand the inhibitors reach with this fast-tracking approval for patients with prostate cancer. To use the inhibitor patients must have received prior taxane chemotherapy and androgen receptor (AR)- targeted therapy prior to beginning niraparib treatment.

The results from the phase two GALAHAD study showed that niraparib demonstrated a 41% objective response rate in patients and a median duration response rate of 5.5 months. These results will surely help Janssen to challenge rivals AZ/Merck’s PARP inhibitor Lynparza, which has also demonstrated positive results in prostate cancer patients of the same indication. However, at the moment Lynparza is ahead of Janssen as it is currently in the third phase of its clinical trials, as well as being studied in patients with a variety of mutations in the HRRm genes for prostate cancer.

Further advantages of AZ/Merck over J&J is that Merck’s blockbuster Keytruda is currently being studied in patients with prostate cancer as well as being studied in combination with Lynparza which could give AZ/Merck a real competitive edge over J&J if positive results seen.

From a bigger picture this news presents exciting news for prostate cancer treatments, as the emergence of these PARP inhibitors signifies a potential of unlocking a whole new stream of treatment pathways for a select patient population.

FTC demands more information on AbbVie’s Allergan buy, as the US antitrust watchdog keeps intense gaze on major pharma deals

First the FTC (Federal Trade Commission) dug in deep on BMS acquisition of Celgene, then it held up and continues to hold up Roche’s acquisition of Spark Therapeutics, now it is putting another major pharma deal under intense scrutiny.

The FTC has issued another demand of information from AbbVie and Allergan on their proposed $63bn merger. This so called ‘second request’ comes after a coalition of unions and consumer groups petitioning the FTC to carefully examine the deal and to block it if necessary. This follows a similar request by the FTC to Roche about its proposed acquisition of Spark Therapeutics, triggering a series of delays and extended tender offers.

Just as the case of the Roche situation, the FTC has offered no rhyme or reason as to why it has sent out this second request. Allergan, seeming anticipating a second request, offered before the FTC had made this announcement to sell of two of its drugs, brazikumab and Zenep which overlap with AbbVie’s Skyrizi and Creon respectively.

However, the unions do not seem to have an issue with product overlap but more what they consider anti-competitive behavior by both companies. Both companies have a history of using price hikes, rebate walls and controversial IP tactics to stifle competitions. Unions worry that a merged company between the two, creating the fourth largest drug maker in the world will give them even more negotiating power against payers.

Wells Fargo analysts say that they “do not believe there is a significant risk of the deal not being finalized given the little overlap between the companies.” However, after the forced divestment in the BMS-Celgene deal and constants delays for Roche/Spark, no one is quite sure what the FTC will demand.

Sobi to spend $915m to acquire Dova Pharmaceuticals

Sobi (a Swedish Orphan Biovitrum) is set to acquire Dova Pharmaceuticals on the conditions of a regulatory approval of its lead drug Doptelet in a new indication.

Sobi will offer a consideration of $29 per share, with an upfront consideration of $27.5  and an additional $1.50 with approval of Doptelet. This totals to a consideration of $915m.

Doptelet is a treatment for low platelet counts in patients with chronic liver disease who have to undergo a medical procedure. It has since been expanded to patients with chronic immune thrombocytopenia, who have not benefited from previous treatment. It is delivered over a five day course, that prepares patients to have a medical or dental procedure five to eight days after. This is Dova Pharmaceuticals first product to be approved by the FDA and it is the first drug to be approved by the FDA of this indication.

Dova Pharmaceuticals hope to snare Novartis’s market share with its treatment for Hepatitis C virus infection (CIT), Revolade. Dova says Doptelet has fewer liver-related side effects compared to its Novartis counterpart and if Dova receives approval for CIT, it will further spread into Revolades market.

This deal with Dova significantly enhances Sobi’s hematology franchise, as Sobi already has a market approved therapy for Haemophilia A and B. This acquisition will hopefully help Sobi to fend of competition from other market entrants from the likes of Hemibra from Roche.

Health Secretary Matt Hancock says UK will consider mandatory vaccinations

Matt Hancock announced that childhood vaccinations could be made compulsory in order to fight the increase in preventable diseases like measles. This comes after news that the vaccination rates dropped for all 13 recommended childhood vaccinations in 2018/2019.And with the UK losing its measles free status earlier this year, Hancock believes this makes a compelling argument.

Cases of hospitalization for measles in England rose by two-thirds in 2018/2019 compared to the previous year, with the UK now having the second lowest MMR vaccination rates in Europe behind France.

Hancock has taken legal advice on how such a policy could be implemented and he recognizes that some children cannot be vaccinated and some parents will resist on the basis of religious convictions but he stressed that these groups make up a very small portion of the current 7-8% now who don’t get vaccinated. He has singled out social media companies for the blame, stating they were not doing enough to stamp down anti-vacc misinformation on their platforms.

The main announcement coming from the Conservative Party Conference, is the intention to spend £13bn on capital investment on hospitals over the next decade. With £2.7bn already earmarked for 6 hospitals over five years. Another 34 hospitals are in line to receive £100m in ‘seed funding’ in the coming years, with the remainder of the money being raise by the taxpayers in the future. There is also a separate £200m fund to replace and upgrade scanning equipment like MRI and CT scans.
NHS providers chief executive Chris Hopson welcomed the programme but cautioned that the NHS “has been starved off capital since 2010. There’s a £6bn maintenance back-log, £bn of it safety critical.

British PM promises £200m injection into the UK Life Science Sector

According to the announcement, this injection will “mobilize £400m of private investment to allow science companies to scale in the UK.” The investment will be used to help companies raise capital, run clinical trials, employ more industrial scientists and upgrade manufacturing capabilities.

Another initiative was announced to continue to fuel the post-Brexit Life Sciences industry, with the launch of a new talent scheme for UK fund managers to attract the best scientists from around the world. This scheme follows Johnson's earlier announcement in the year to develop a new fast track visa route to continue to attract the top scientists.

Steve Bates, CEO of the UK Bioindustry Association stated: “It’s great to see the Prime Minister has reaffirmed the governments commitment to the UK life science industrial strategy to grow companies to scale in the UK.” He added that this was particular good news as in the coming weeks UK based life science venture capital funds look set to lose access to European Investment Bank Money, which has been a cornerstone in providing funds to the sector.

This news comes from the annual Conservative Conference held in Manchester, where there was also announced a new health policy statement promising £13bn in capital investment to be spent on hospitals over the next decade. NHS leaders welcome the news but understandably remain cautious. With emphasis on the upcoming political uncertainty that investment should be delivered not just for short term effects but also considering long term sustainability.

Cannabinoid- can it be patented

In late 2018, medical cannabis was downgraded from Schedule 1 to Schedule 2 (medically allowed) in the Misuse of Drug Regulations in the UK. There has been a lot of buzz in the news around this subject and there appears to be a patent grab underway but I am covering in this article today if it is feasible.

The two main cannabinoids of interest are cannabidiol (CBD) and tetrahydrocannabionol (THC). CBD lacks the psychotropic effect of THC. It is not considered a controlled substance (regulated by the government) in its pure from but it is said to be very hard to purify and products containing CBD are presumed to also contain other cannabinoids. However it is still possible for such CBD and other incidental cannabinoid substances to be in the medically allowed schedule of the controlled substances legislation.

There still remains a wide perception in the medical community regarding the benefits against potential dis-benefits of many non-medically approved cannabinoid products. There are a multitude of non-regulated products on the market, including vitamins, minerals, oils and herbal extracts. There is only one medically approved product in the UK called Sativex, a treatment for spasticity in MS sufferers which contains both CBD and THC.

Since the cannabis plant has been used for thousands of years, there is a popular opinion that it cannot be patented. This is not necessarily true and there has not been much prior experience in this field as it would have been considered illegal.

As previously mentioned, there are a multitude of non-medically approved products on the market with varying claims to their content, it is very hard to quantify their claims and ensure batch quality. Both CBD and THC are hard to purify, therefore accordingly processes to isolate, extract and purify cannabinoids may well be patentable as well as any stable forms achieved. Claims could be made for patents on the adaption of current delivery methods such as nebulization and formulation for vaping but there is a high chance, they would not be considered inventive enough.

There have been calls by many organizations to the Health and Social Care Committee calling for clinical trials to substantiate the claims. However, constructing the usual double-blind trials will pose an issue as patients will know they are not receiving the placebo as they will experience the ‘high’ caused by the THC. The hurdle met in the clinical trial also presents a patent issue as it is necessary for a patent to enable the skilled person to use the invention across the breadth of the patented claims.

There is also a potential issue with public morality regarding patentability especially if a large proportion of people find it abhorrent, which is less likely considering the medical use of cannabis.
Given the growing liberalization of the use of cannabis on both the UK and US it is still early days from a patent standpoint. The major issue still stands of obtaining clinical proof of benefit for these compounds and this can make it a compliance headache for companies to get involved in this area. However it is likely that with this wave of liberalization will come legal relaxation on these previously banned substances.

NICE delivers final ‘no’ to Novartis migraine treatment Aimovig

Novartis has been delivered another ‘no’ for its migraine treatment Aimovig from NICE following draft guidance which rejected the drug earlier this year.

The final appraisal supports the original decision that was made, that Novartis lacked a significant amount of data which meant it could not recommend the treatment for routine use on the NHS. NICE said the trials of Aimovig “excluded people for whom all previous treatments had no therapeutic benefit.” This significant population, largely represents those that would be most in need of the treatment and the “most clinically important subgroup."

With further reference to the data, NICE pointed out that no-where in the long term data was there proof that Aimovig presented a clear sustained benefit, and that it only included people with episodic migraine and did not specify how many previous treatment they had failed before taking the drug.
The agency also presented concerns that for the chronic migraine subgroup , there was no direct comparison with the current treatment in use (Botox), so its superiority is uncertain.

As a result, NICE determined the cost-effectiveness estimates are higher that what is deemed acceptable even with Novartis offering NICE a confidential discount to the £5,000 per year list price.
Novartis has responded that it is very disappointed in the decision, believing that it does have benefits over the current standard of treatment, including its self-administering dosing which means patients do not have to repeatedly attend clinic appointments.

Aimovig is avaliable for use in NHS Scotland and NICE has been met with criticism for establishing a post code lottery of success with those who cannot afford the medicine cut off from the potential benefits of the drug. Chief Executive of the Migraine Trust, Gus Baldwin, has said that it is a “very bad day for chronic migraine patients”

Since being approved by the European Commission in 2018, Novartis has seen rivals emerge from Eli Lilly and Teva. However Aimovig has managed to establish itself as the lead product in the market, with estimated sales of $2.05bn in 2024 by Evaluate Pharma.

NAO has reported there is still a lot of work left to do to prevent medicine shortages, despite the UK governments preparedness programme.

There are still significant gaps in No-Deal Brexit report, according to the National Audit Office
NAO has reported there is still a lot of work left to do to prevent medicine shortages, despite the UK governments preparedness programme.

One of the concerns put forward by the NAO is that the government has an incomplete picture of the stockpiling of six weeks’ worth of medicine and other medicinal products that are needed such as gloves and syringes. As of the 20th September, 72% of medicinal products had that amount available.

However, supplies of other goods other than medicines for social care providers ‘have not been similarly stockpiled’ creating issues for the home sector as it relies on non-medicine supplies that are not usually bought via the NHS.

There is still work being completed to arrange for additional freight capacity but there are worries it will not be ready for the 31st October in particular the extra ferry capacity that the government has contracted to bring in medicines into ports other than Dover. This is extremely important because of the 12,300 medicines used in the UK, 7,000 come from or via the EU according to the Department of Health and Social Care.

The APBI have welcomed that the government has placed top priority for the additional freight capacity, but they are adamant that stockpiling alone is not enough and that they need to be able to be replenished.

The government has assumed a worst-case scenario that the flow of goods over the Channel will be reduced by 40-60% and hopes that it will have as much of the freight capacity for priority goods as possible in place by 31st October and all of it by the 30th November at the latest. The government also has provisions in place to deploy a courier service that will fly in emergency supplies if needed.

The Department of Transportation has also been asked to procure an extra 2,326 additional heavy goods vehicle spaces per week as part of the government-secured freight capacity, with 91% of the additional spaces allocated to health and social care supplies.

Roche-Spark Therapeutics deal receives small advance in the UK, but M&A watchers continue to be uneasy

Roche’s pending $4.8bn pick up of Spark Therapeutics has been delayed continuously by the US and UK regulatory agencies. On Wednesday this week, the UKs Competition and Markets Authority (CMA) opened the public comment for its antitrust investigation of the deal.

So far, the CMA has announced that it will not push the Roche-Spark deal back as far as its US counterpart. This seems very insignificant news, but market watchers’ interest has rocketed as other mega-pharma deals have been started to be met with greater scrutiny from both patient groups and politicians. With the main worry arising that one potential blocked merger based on antitrust grounds would spell inevitable trouble for the other mega pharma deals.

A particular example that had watchers confused and escalated the worry was the Federal Trades Commission (FTC) role in BMS $74bn acquisition of Celgene with a demand that left many investors confused as the FTC ordered Celgene to divest its $1.6bn per year psoriasis med Otezla on the middling grounds of an overlap with a BMS investigational candidate. This left many analysts puzzled particularly as Otezla lacks the star power of marketed rivals such as Humira. Analysts at Jefferies see this as a potential read through that the FTC is being tougher on regulating competition.

Novartis continues to blame AveXis executives in Zolgensama data scandal

Novartis has given the FDA a plan of actions it will implement to prevent an event like the Zolgensama data scandal from happening again, but the big pharma company continues to be adamant that the blame lies squarely on the two AveXis executives.

Novartis states that AveXis co-founders, Brian and Allen Kaspar, either directly manipulated the data themselves or pressured employees to do so. As well as alleging that they held up the internal investigation that Novartis submitted when it found out about the case.

Novartis has decided to shift AveXis’s quality control function in-house with a new senior executive appointed to oversee the process and future compliance. Also part of the remediation plans is a whistleblower scheme across AveXis, to encourage reporting of misconduct and fraud as well as a programme to retrain AveXis’s quality unit employees and Novartis stated that they will let the FDA know within five days if it receives credible allegations.

This move by Novartis effectively shifts the light that garnered attention from the FDA and the public simultaneously. Primarily that Novartis was aware of the manipulation of the animal testing data included in its submission before Zolgensama was approved but only told the agency after receiving marketing authorization in the US. It was this element of the scandal that brought Novartis the attention of US lawmakers.

Labour sets focus on pharma companies, in a controversial declaration

At the annual Labour party conference in Brighton, Labour party leader Jeremy Corbyn announced his plans ‘to take on pharmaceutical companies.’

The initiative called Medicines for Many, was created to take aim at pharma companies that were placing shareholders earnings over people’s health and access to treatments. Aspects of the proposal included that patented drugs would be subject to compulsory or ‘Crown Use’ licensing which would mean that generic versions of these drugs could be manufactured at lower costs. The initiative also outlined a plan for a state-owned pharmaceutical company which would manufacture these generic medicines. This state-owned company would then go and sell its generics to the NHS and re-invest profits into “publicly funded research and development facilities.”

The Labour party leader was keen to highlight the case of Luis Walker, a CF patient who has been at the forefront of a multitude of campaigns for access to Vertex’s Orkambi. The public battle between the pharma company and NHS/NICE has been very publicly covered and met with overt criticism as frustrated patient groups have decided to bypass the system to source generic copies of the drug and establish a buyer’s club. Jeremy Corbyn highlighted the fact that Luis Walker cannot get access to this treatment because Vertex pharmaceuticals refuses to sell the drug to the NHS for an affordable price.

The British Pharmaceutical Industry has not taken this news well and responded that the proposal of compulsory licensing is not the right answer. Richard Torbett, executive director of commercial policy at the ABPI, recognized how the Luis Walker case is an unacceptable situation but that ‘commercial licensing’ which is ultimately seizure of new research, is not the answer. It would undermine the system for developing new medicines and send a negative signal to British scientists and discourage research in the UK.

Richard Torbett also highlighted the issue that the proposed plans would severely impact SME pharma companies, companies that are critical in the development of innovative medicine.

Novartis speeds ahead of FDA in halting its distribution of its generic Zantac

Novartis did not wait for an FDA investigation as it halts worldwide distribution of its generic Zantac, after it was suspected that a cancer-causing impurity had been detected in the popular over the counter anatacid.

The FDA decided it was unnecessary for Novartis to recall the generic however European and Canadian regulators have taken a more aggressive approach by asking drug makers to stop distribution. Unlike a recall it means the stocks of the drugs already in the store can be sold.

Novartis announced: “A precautionary distribution stop of all Sandoz ranitidine containing medicines in all their our markets will remain in place until further clarification.” Novartis is set to perform an internal investigation to determine further details.

Sanofi, which sells branded Zantac, has decided not to take a similar approach, with no current plans to stop the distribution or manufacturing of Zantac. Sanofi is said to be working close with the FDA and has pointed out to the regulatory agency that the level of NDMA in Zantac barely exceeds the amount found in common foods.

NDMA is the same impurity that set of global recall in blood pressure medicines last year, with the FDA determining in the recall that NDMA and two other cancer causing agents can be created during certain manufacturing steps involving the use of solvents. The FDA has now set acceptable limits to the amount of NDMA than can be found.

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