Expanding the bandwidth of life science investments: Increasing investment viability

Guest content Contributed by Jayme Norrie, Chief Strategic Officer, Incite World

From what we have experienced, angel investors are shoring up the gap in new innovations coming forward. However, they seem to be more naive than VC’s in terms of due diligence prior to investing. Scientists from the company march in with charts and scientific graphs 99% of angel investors don’t know anything about. The rule they seem to forget is: there is ALWAYS a patient market, and there is ALWAYS a scientific platform – that undoubtedly has competition. Will any new life science innovation get a percentage of the whole market? Absolutely not. They will get a percentage of a percentage based on third party reimbursement and their label. We end up doing this work for our clients and typically the results are startling to them.

Angels and VC’s tend to think that some phone calls to scientists to provide insight will help. This also hurts investments in the long run as they are asking strangers to give them financial advice. And most of these strangers – albiet with great CV’s – have never seen the data on the platform, or on other similar platforms that will ultimately compete with the innovation. More so – how can those “experts” who are brought in for evaluation on a particular scientific technology know everything about so many varying therapeutic areas? They can’t. So companies depending on a handful of “experts” to give them advice aren’t playing with a full deck – of common sense or investment strategic advice.

What I find the most amazing in the life science investment sector as a whole is the lack of investment review by true experts. Professionals who work for big pharma, biotechnology (of companies we’ve heard of), or big device. When interviewing “experts”, ask them how many successful products they’ve put on the market – Do they understand all of the nuances that lead to a successful life science product? Ask them what actual burn rates are to include FTE’s, clinical trials for THIS particular product, manufaturing and distribution costs – Do they understand and have they demonstrated their understanding above “costs of clinical trials = {blank}”; based on what? In other words, do they understand the regulatory path, the manufacturing, how this product will differentiate its label, and what strategies will be required to secure rapid product uptake?

It concerns me to look at the long term viability of the life science market as investors will continue to shy from it if they continue to get burned. The rate of new innovation discovery is tremendous; finding those that will attract IPO’s and licensing agreements means looking at them as ranking industry would – the big boys – and the only people that can do that are those that are internal to these organziations, or those who have been recently. When looking for advice on life science investments, start with the whole teams experience and make sure – if they have a cross-functional team – that its from a company you’ve heard of.

We’re grateful for the Angel community; without them emerging innovations wouldn’t get a chance in these days of upswing with tech investments. And we support the VC community as well. In the long run it will require better due diligence by ranking professionals and looking beyond level of education to level of documented experience.

`Til Death Do Us Part, But First, the Pre-Nup: Why CAPA Needs to Evolve

A guest editorial from Emil Ciurczak, Contributing Editor, PharmaManufacturing.com

While reading a trade magazine recently, I was struck with the detailed information on how to design and implement a Corrective and Preventive Action (CAPA) system. ISO 9001:200, Clause 8.5.2 states, “…the organization shall take action to eliminate the cause of nonconformities encountered…” For medical devices, 21 CFR Part 820.100 states, “…each manufacturer shall establish and maintain procedures for implementing corrective and preventive action…” Similar wording appears in 21 CFR Part 211 for drug companies. Do we really need all these regulations to ensure we make the product as we are “supposed to” be making it?

Now, it strikes me as interesting that we still consider (under cGMP, of course) the NDA (New Drug Application) as “perfect” after all our trial, production-sized batches. What did you say? We only make three batches? But surely, numerous hours of physical and chemical design went into designing the product. And don’t forget how smoothly we went from pilot-size to production-size. What? A full-time staff of troubleshooters, you say? That many people are needed?

So, based on that information, we submit our “perfect” formulation and a plan of what to do when it fails to work. Hmmm…what’s wrong with this picture? An online source says, “Implementing corrective action and preventive action systems for FDA-regulated manufacturers is a necessity to guarantee quality and ensure compliance with Current Good Manufacturing Practices of the Quality System (QS) Regulations.” [1] Well, I’m just a humble country chemist, but (already with the “but”) if we did our homework and actually knew what we were doing, why do we need a corrective action plan?

I remember saying something recently about GMPs stating that relevant measurements should be taken during the process to ensure good product (back in the 1970s, even). I must have missed the part that said to run blindly until we go out of spec then do an investigation to find out why. From speaking with associates who routinely do OOS (Out Of Specification) investigations, there seem to be two categories of findings: the obvious (error in the lab, error in weighing in the plant) and the “como sabe (who knows?)” type, which leads to never knowing.

It is a fact that many, many lots of products simply go out of expiry in the warehouse, waiting for a cause of failure to be found. The problem with current production (under cGMP) is that if we do not know what the critical steps are, how can we find where the product made a wrong turn? We’re not even sure when the product makes a correct turn! We approach the production of pharmaceutical products much like using directions from MapQuest.com. Whether or not a bridge is out, we proceed down a road. Why? Because we went down that road for the first three NDA batches, that’s why.

PAT is the moral equivalent to using common sense: if we see that a bridge is out, we take a detour. In cGMP, we don’t look for the bridges; we simply say, “It worked last year, so let’s keep driving…we’re covered by cGMPs (read: SOPs).” Check the particle size of the raw materials? Wasn’t in the filing; forget about it. What about polymorphism? Nope, wasn’t in the document specifications 10 years ago. How about flowability, compactability, pore size or density? Nope, nope, nope and nope. I guess it’s much easier to conduct several (dozen?) OOS investigations each year than understand the process. [I have a button that states, "Several months in the lab can save an hour in the library." Not exactly the same, but close.]

Now, please don’t misconstrue what I am saying. There is no reason not to have a plan, should some disaster strike a production run. Not having such a plan would be akin to leaving your house without insurance. However, to stretch a comparison, that doesn’t mean you can leave a pot on the stove and go to the store. Having a “disaster drill” and “evacuation plan” doesn’t mean not taking all precautions to prevent the disaster.

Assuming that because a product ran smoothly three times in a row (possibly years ago), it is not necessary to keep a vigilant watch on all current incoming materials and process parameters is the ultimate fantasy (yes, even including that website). Under the “traditional” way of manufacturing, using the “three strikes, er, uh, batches and you’re out” approach, it is impossible to do business without a well-thought-out CAPA in place.

What I am saying is that the idea of a CAPA has to morph into something new under the QbD and PAT manufacturing paradigms. In lieu of a change-control based approach, designed to find the problem with a single batch (“Round up the usual suspects”), we will have an ongoing CAPA, using “design space” mini-adjustments throughout the process. Since I already used a driving analogy, I’ll try another: current CAPA documents wait until we go up a curb, then we try to find where we hit a pothole to make us lose control. Using a PAT set-up, we monitor the road constantly and avoid the potholes before we hit the curb.

All we are saying is give PAT a chance… (apologies to John Lennon). We can’t do it sort of, part way, keeping some elements of the process static and changing others. That’s like being “partially pregnant.” DO IT!

Reference

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Starting a biotechnology company to treat a child

CnnMoney has a cool story on a mother who was motivated to start a biotech company to develop a better treatment for her daughter’s disease. A former lawyer and founder of satellite-communications companies including Sirius Satellite Radio, Martine Rothblatt was able to develop proficiency in biotechnology and her company, United Therapeutics, grossed $159 million in revenues last year. A truly inspiring story.