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2013 and 2014 have been very good for biotechnology public markets. 35 biotechnology companies went public in 2013, and well over a dozen have gone public in the first few months of 2014.

nasdaq-biotech-index-1m

Figure 1: Nasdaq Biotech Index since February 1 2014

With the surge in public launches, one must ask the question: “How long can it last?”

Just a few days ago Barrons’s cautioned about a potential bubble, and as Figure 1 (courtesy of MSN Money) shows, recent drops have effectively wiped out NASDAQ biotechnology industry gains since February 1st of this year.

While this quick rise and fall of value may be sobering, long-term value investors should take some comfort in the bigger picture. The recent IPOs enabled many companies which had been sitting on the sidelines for years to raise public cash and to offer exit opportunities to investors — both of which will support future growth in the sector, and the NASDAQ biotechnology index has generally been on a tear for the past five years (Figure 2).

Nasdaq biotechnology index March 2004 - March 2014

Figure 2: Nasdaq biotechnology index March 2004 – March 2014

So, the short-term question remains — is this a short-term correction, a closing of the IPO window, or the start of a larger correction?

Susan Kling FinstonThis is a guest post from Susan K Finston, President of Finston Consulting. Do you have a response to Susan’s post? Respond in the comments section below.

Have you heard the urban legend about Egypt’s compulsory license for Viagra, following declaration of a national emergency for erectile dysfunction?  Its a whale of a tale, combining crony capitalism, low-quality generics, and a fun therapeutic category.

Just one problem – it never actually happened.

The facts are these:

  • In early October 2002, the New York Times published an article highlighting the recent passage of Egypt’s new intellectual property law, including updated patent law provisions intended to bring Egypt into compliance with its World Trade Organization (WTO) patent obligations by 2005.
  • The same article went on to say that an identified MOH official had issued a statement to the effect that it would soon authorize copy-cat products for Pfizer’s recently approved Viagra, noting that the patent law was not yet in place.
  • As rejoinder, the NYT also quotes Egyptian IP expert (and my friend) Karem el-Helaly, who stated that while the patent amendments were not yet in place, “Viagra is entitled to data exclusivity protection under Egyptian law for five years after its market authorization.”

What does this mean?

There was no pharmaceutical compulsory licensing in Egypt – then or now.

In fact, by mid-2002 Egypt had implemented data exclusivity to protect the commercially valuable clinical dossiers lodged by companies with any application for marketing approval.  The IP Amendments included a number of lacunae and compulsory licensing provisions that gave industry heartburn, to be sure, but were passed more than 3 years ahead of the deadline.

While Egypt’s early implementation of its data protection obligations suffered from occasional  (and not uncommon) backsliding, in this case it turned out the MOH official had spoken out of turn, and was not expressing official Egyptian policy.  Following consultations between the Egyptian Ministry of Commerce, the Pharmaceutical Research & Manufacturers of America (PhRMA), and the two governments, the Government of Egypt renewed its commitment to provide the required  protection for pharmaceutical clinical dossiers.

Recognizing the progress made in Egypt through passage of the IP Amendments in 2002, the PhRMA 2003 “Special 301” submission to the US Trade Representative recommended that Egypt be promoted from the “Special 301” Priority Watch List to the Watch List, and supported continuing U.S. technical assistance to ensure implementation of the patent amendments and full exclusivity for clinical dossiers.

However, the New York Times article spawned an enduring urban legend. The tale of Viagra compulsory licensing has become a world traveler, lately cited in an Indian Op-Ed taking comfort that at least India’s compulsory license issued against Bayer was for Nexavar (cancer therapy) and not for Viagra, like in Egypt.   As Mark Twain wrote, “A lie can travel half way around the world while the truth is putting on its shoes.”

About the author:
President of Finston Consulting LLC since 2005, Susan works with innovative biotechnology and other clients ranging from start-up to Fortune-100, providing support for legal, transactional, policy and “doing business” issues. Susan has extensive background and special expertise relating to intellectual property and knowledge-economy issues in advanced developing countries including India and South Asia, Latin America and the Middle East North Africa (MENA) region. She also works with governments, and NGOs on capacity building and related educational programs through BayhDole25. Together with biotechnology pioneer Ananda Chakrabarty, she also is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivo research. Previous experience includes 11 years in the U.S Foreign Service with overseas tours in London, Tel Aviv, and Manila and at the Department of State in Washington DC. For more information on latest presentations and publications please visit finstonconsulting.com.

bioentrepreneurship-bootcampThe back-issues of the Journal of Commercial Biotechnology more than five years old are now free. For complete access, see the  archives at http://commercialbiotechnology.com/issue/archive.

The Journal of Commercial Biotechnology, in print since 1994, is the definitive international quarterly publication for bioscience business professionals. The Journal is designed specifically for those professionals who need to enhance their knowledge of biotechnology business strategy and management, improve and advance their product development or want to keep up-to-date with current issues and industry trends. It has been described as a “Harvard Business Review for biotechnology companies.”

Each issue publishes peer-reviewed, authoritative, cutting-edge articles written by the leading practitioners and researchers in the field, addressing topics such as:

  • Management
  • Policy
  • Finance
  • Law
  • Regulation
  • Bioethics

At the time of this posting, volume 15 number 1 and older are free. Check them out at http://commercialbiotechnology.com/issue/archive .

Journal of Commercial Biotechnology This paper is part of the free Open Access archive of the Journal of Commercial Biotechnology

How DanioLabs has evolved its relationship with the CIMR

Go to paper

ABSTRACT: The commonest interaction of industry with academia is as the passive recipient of intellectual property. A much deeper and productive interaction is possible with the creation of closely knit collaborations. Here the barriers to achieving this and how they may be overcome are explored.

The Journal of Commercial Biotechnology is a unique forum for all those involved in biotechnology commercialization to present, share, and explore new ideas, latest thinking and best practices, making it an indispensable guide for those developing projects and careers within this fast moving field.

Each issue publishes peer-reviewed, authoritative, cutting-edge articles written by the leading practitioners and researchers in the field, addressing topics such as:

  • Management
  • Policy
  • Finance
  • Law
  • Regulation
  • Bioethics

For more information, see the Journal of Commercial Biotechnology website

I have posted a series of free biotechnology training videos at BiotechU.com .

biotechu_white_webThe course is derived from my textbook, Building Biotechnology, and covers the following topics:

  • Biotechnology Industry Introduction
  • The Development of Biotechnology
  • Preface: The Science of Biotechnology
  • Introduction to Molecular Biology
  • Drug Development
  • Tools and Techniques
  • Applications
  • Preface: Laws, Regulations, and Politics
  • Intellectual Property Regulation
  • Politics
  • Preface: The Business of Biotechnology
  • Biotechnology Company Fundamentals
  • Finance
  • Research and Development
  • Marketing
  • Licensing, Alliances, and Mergers
  • Managing Biotechnology
  • International Biotechnology
  • Final Words

I invite you to check out this free resource. Customized onsite bootcamps are also available — contact me for more information.

This spring has been a busy one for book launches — I have one final book to announce: The Success Matrix.

The Success Matrix: Winning in Business and in Life takes a slightly different approach than most business books.the-success-matrix_150px

A typical business book guides the reader through its prescribed methods and tools, using various real world examples to support its concepts and conclusions. In fact, the central chapters of The Success Matrix do just that. But The Success Matrix is atypical in the opening and closing chapters. In these chapters the author conveys the basic concepts of the book in a format that should be more accessible and recognizable to readers who are themselves executives, managers, entrepreneurs or individual contributors: a fictional account of one executive’s exposure to The Success Matrix, as explained to him by his friend and mentor.

Bracketing deep management insights with a fictional story to illustrate the power of the concepts within, The Success Matrix demonstrates how, by focusing on the balance across three areas — Vision, Process, and Output, you can improve your business performance as well as satisfaction in your world outside of work. It’s a fun, easy read, but with serious impact in your business, your career and your personal life.

See more details, and buy the book at Amazon.com

Journal of Commercial Biotechnology This paper is part of the free Open Access archive of the Journal of Commercial Biotechnology

A maturing industry: Strategic patenting trends, US and academic dominance, and the global biotechnology landscape

Go to paper

ABSTRACT: Patent analytical data has proved itself a key enabler in measuring the commercial focus and activity taking place within highly research and development (R&D) intensive industries such as biotechnology. Marks & Clerk has assessed biotechnology patent application and grant records from a range of international patent office and proprietary databases, with a view to gauging the industry's commitment to R&D and the particular areas of biotechnology that are attracting investment...

The Journal of Commercial Biotechnology is a unique forum for all those involved in biotechnology commercialization to present, share, and explore new ideas, latest thinking and best practices, making it an indispensable guide for those developing projects and careers within this fast moving field.

Each issue publishes peer-reviewed, authoritative, cutting-edge articles written by the leading practitioners and researchers in the field, addressing topics such as:

  • Management
  • Policy
  • Finance
  • Law
  • Regulation
  • Bioethics

For more information, see the Journal of Commercial Biotechnology website

Journal of Commercial Biotechnology This paper is part of the free Open Access archive of the Journal of Commercial Biotechnology

A maturing industry: Strategic patenting trends, US and academic dominance, and the global biotechnology landscape

Go to paper

ABSTRACT: Patent analytical data has proved itself a key enabler in measuring the commercial focus and activity taking place within highly research and development (R&D) intensive industries such as biotechnology. Marks & Clerk has assessed biotechnology patent application and grant records from a range of international patent office and proprietary databases, with a view to gauging the industry's commitment to R&D and the particular areas of biotechnology that are attracting investment...

The Journal of Commercial Biotechnology is a unique forum for all those involved in biotechnology commercialization to present, share, and explore new ideas, latest thinking and best practices, making it an indispensable guide for those developing projects and careers within this fast moving field.

Each issue publishes peer-reviewed, authoritative, cutting-edge articles written by the leading practitioners and researchers in the field, addressing topics such as:

  • Management
  • Policy
  • Finance
  • Law
  • Regulation
  • Bioethics

For more information, see the Journal of Commercial Biotechnology website

Susan Kling FinstonThis is a guest post from Susan K Finston, President of Finston Consulting. Do you have a response to Susan’s post? Respond in the comments section below.

Looking at the increasing therapeutic importance of peptide therapies,  you may be surprised to learn that these (literal) building blocks of proteins have been defined away under the The Biologics Price Competition and Innovation Act of 2009 (BPCI Act), and don’t get twelve (12) year period of data exclusivity for biologics and protein products.  To learn more, read on.

Over the past decade, peptide therapies have crossed over into the mainstream with over 60 approved products, 140 therapies in the clinic and an estimated 500 – 600 in preclinical development. Indications for peptide drugs also are broadening, ranging from infectious disease, to metabolic disorders and advanced cancer therapies. With less toxicity and fewer side effects, naturally occurring peptide drugs have an approval rate that is double that of small molecules (new chemical entities or NCEs).

Why are peptide drugs so important?

“Evolution has been honing the specificity of polypeptides for millions of years. Amino Acid sequences – whether in peptides or proteins – control and direct all aspects of cellular functioning and coordinate most intercellular communication. No other class of biological molecules offers the range of chemical diversity … they are nature’s toolkit and the more we can use native peptides or closely related analogs , the safe and more specific the drugs at the physician’s disposal.” (Source: Rodney Lax)

With emerging nanotechnologies, we are seeing breakthrough products like oral insulin, along with a range of critical new therapeutic approaches including peptide cancer therapies for oral delivery and on an out-patient basis, up to and including anticipation of effective cancer prophylaxis for patients with BRCA mutations. Convergence of nanotechnologies with increased understanding of peptides makes everything possible.

Understanding the greater development and manufacturing challenges associated with biologics, the FDA’s understandable preference is for shorter, truncated, peptides that can be manufactured through chemical synthesis. This entails a time-consuming and painstaking process of optimizing and abbreviating peptide drugs to reduce the size from 50, 40, or 30 peptides to a smaller size can be synthesized chemically for hospital use (IV delivery) or as oral formulations (nanotechnology).

So while avoiding the risks and challenges of biologics, peptide therapies are inherently more complex than typical small chemical entities. Months or even years of additional development time may be needed to fully optimize a truncated peptide that will retain safety and effectiveness as a drug, comprising smallest possible amino acid chain for submission to the FDA.

Given lengthier product development cycles, increased patent litigation, greater complexity of clinical trial requirements and the new regulatory pathway for biosimilars, the U.S. Government mandated an increased data exclusivity period for biotech drugs generally. The BCPI Act included a 12 year period of exclusivity for regulatory dossiers associated with biologicals and protein products.

You may think that this includes peptide drugs – that would be logical. In fact, the opposite is true. Based on the (revised) definition and FDA guidance to the BPCI Act, peptide drugs that navigate the Scylla and Charybdus of biologics and small molecule development and gain FDA approval expressly are excluded from the 12 year period of exclusivity available for biologics.

This brings to mind President Lincoln’s famous riddle:

“If you call the tail a leg, how many legs does a horse have?

Four – calling a tail a leg does not make it a leg.”

As the building blocks of proteins, technology-intensive peptide therapies are essentially biologic in nature – and well deserving of 12 years of data exclusivity.

About the author:
President of Finston Consulting LLC since 2005, Susan works with innovative biotechnology and other clients ranging from start-up to Fortune-100, providing support for legal, transactional, policy and “doing business” issues. Susan has extensive background and special expertise relating to intellectual property and knowledge-economy issues in advanced developing countries including India and South Asia, Latin America and the Middle East North Africa (MENA) region. She also works with governments, and NGOs on capacity building and related educational programs through BayhDole25. Together with biotechnology pioneer Ananda Chakrabarty, she also is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivo research. Previous experience includes 11 years in the U.S Foreign Service with overseas tours in London, Tel Aviv, and Manila and at the Department of State in Washington DC. For more information on latest presentations and publications please visit finstonconsulting.com.