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

Festo: The plague continues

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ABSTRACT: This paper reviews the law on the doctrine of equivalence and prosecution history estoppel and explores how it has been reshaped by the Federal Circuit's and Supreme Court's decisions in Festo Corp. v Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd. The paper also assesses the likely impact those decisions will have on patent prosecution, licensing and enforcement activities.

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

SteveSapletalThis is a guest post by Steve Sapletal,  a director in West Monroe Partners‘ M&A practice. Do you have a response to Steve’s post? Respond in the comments section below.

Reorganize, realign, refocus: When divesting is the key to improving margins and profitability

Large medical device companies have been buying complementary businesses over the last five to seven years in order to grow the bottom line while achieving better margins and improving profitability. But, while these organizations have been quick to acquire, many have since realized that operating these complementary organizations requires an entirely different business focus, customer support and operating model. Sometimes, this realization comes too late, resulting in employee and customer retention issues, shrinking revenues and profit margins instead of the bottom line growth and collaborative opportunities the deal promised initially. In these instances, large medical device companies’ best bet is to consider consolidating operations or selling non-strategic parts of their business to refocus on their core operations.

One organization doing just that is Quest Diagnostics. In late 2012, Quest Diagnostics announced that it would launch “a major management restructuring aimed at driving operational excellence and restoring growth.” This restructuring was intended to simplify the organization by divesting non-core and underperforming assets and refocusing capital deployment.  Since then, Quest Diagnostics has reorganized numerous times, shuffled many of its products and services, realigned employees, eliminated duplicative roles and layers of management and adopted a simple “back to basics” approach.  Quest has also sold parts of the business, including HemoCue, to shift attention back to its core operations in diagnostic information services.

Divesting companies takes time, energy and resources and has an immediate impact on profitability. But, it also allows medical device companies like Quest to dedicate the right resources and capital to its strategic objectives going forward. It is a tough decision to divest a portion of the business, especially given shareholder pressures to increase share value, but is often the right one for medical device companies looking for long-term survival and prosperity in an industry ripe with competition.

When should a large medical device company consider refocusing on core operations?

Acquisitions always look good on paper and in a financial model, but achieving full integration and deal value is not a paper exercise.  When completing multiple deals within a year, organizations tend to experience new layers of management and reporting structures, duplicate core IT systems and redundant business processes. After a period of high transaction activity, Quest realized that it had three extra layers of management between the CEO and front line employees that were unnecessary –representing between 400 and 600 employees – far beyond what one would deem a well-run organizational model.

Additionally, Quest, like many of its peers, had to respond to new market pressures regarding reimbursement for laboratory diagnostic services by shuffling their product and services portfolios to stay profitable.  Internally, Quest needed to simplify operations and improve processes to be able to respond more quickly to customer requests and make decisions faster. Many of these bottlenecks were the result of previously acquired businesses not being fully integrated into overall operations. While there is never a perfect time to go through the process of refocusing your business, waiting too long to consolidate or divest can ultimately stunt your business’s growth in the long-term.

What’s next?

Selling business units and consolidating divisions doesn’t guarantee operational excellence. Putting the right organizational structure in place is only step one towards achieving your strategic objectives. From there, medical device companies should pay careful attention to broken, inefficient or outdated systems and technologies. Address these problem areas to ensure they promote productivity and design the right processes to complement these systems. Careful planning is important, but successful execution is vital.

Look for Quest to spend a large chuck of time, resources and dollars to stabilize the business before strategically buying another large business outside of its core competency.

About the guest-author:

Steve Sapletal is a director in West Monroe’s M&A practice. He can be reached at ssapletal@westmonroepartners.com.

I have created a six-hour biotechnology education series at bit.ly/LfbSdS, and I want to highlight the policy discussion here.

It is easy to ignore policy when operating in biotechnology. The importance of an understanding of the business of biotechnology, of patent and other legal issues, and of the science of biotechnology is clear, but it is not sufficient to focus on these to the exclusion of policy. For it is policy that determines crucial elements such as research funding, incentives for biotechnology commercialization, and even the strength of patent laws.

So, I present this three-part video series to provide an overview of biotechnology policy, to illustrate how policies can promote biotechnology, and to demonstrate the challenges of balancing innovation incentives with economic constraints.

I have created a six-hour biotechnology education series at bit.ly/LfbSdS, and I want to highlight the policy discussion here.

It is easy to ignore policy when operating in biotechnology. The importance of an understanding of the business of biotechnology, of patent and other legal issues, and of the science of biotechnology is clear, but it is not sufficient to focus on these to the exclusion of policy. For it is policy that determines crucial elements such as research funding, incentives for biotechnology commercialization, and even the strength of patent laws.

So, I present this three-part video series to provide an overview of biotechnology policy, to illustrate how policies can promote biotechnology, and to demonstrate the challenges of balancing innovation incentives with economic constraints.

I have created a six-hour biotechnology education series at bit.ly/LfbSdS, and I want to highlight the policy discussion here.

It is easy to ignore policy when operating in biotechnology. The importance of an understanding of the business of biotechnology, of patent and other legal issues, and of the science of biotechnology is clear, but it is not sufficient to focus on these to the exclusion of policy. For it is policy that determines crucial elements such as research funding, incentives for biotechnology commercialization, and even the strength of patent laws.

So, I present this three-part video series to provide an overview of biotechnology policy, to illustrate how policies can promote biotechnology, and to demonstrate the challenges of balancing innovation incentives with economic constraints.

On a recent press tour of New Jersey I was introduced to PTC Therapeutics, a fascinating company that is developing ribosomal readthrough drugs for several indications.

What I find so interesting about this company and their technology is that it is a sort of magic bullet. Drugs that can modulate ribosomal activity can potentially treat hundreds of diseases (indeed, PTC told me that they are looking at thousands of diseases).

What is a ribosome, and why do you want it to “readthrough’?

Briefly, DNA contains information to construct all the proteins in our bodies. Roughly speaking, proteins are responsible for structural (e.g. muscles, skin, etc.) and chemical (e.g. digesting food, sending and responding to neurotransmitters and hormones, etc.) roles in cells. genes in DNA are transcribed into RNA, which is then translated into proteins (for a more detailed explanation, see this sample chapter from my book, Building Biotechnology).

When genetic information in RNA is being translated into proteins, sometimes there is a premature signal to stop translation. This results in a mal-formed protein which gets only partially interpreted, or discarded. The end result is that key proteins may be missing from individuals with these genetic errors, leading to sometimes terrible diseases. Fortunately, there are multiple signals for translation to stop, and the gene sequence is only one of these signals. So, companies like PTC are finding ways to modulate the activity of ribosomes, the cellular machines which translate RNA into protein, to encourage them to ignore illegitimate stop messages.

How does readthrough work?

Using the DNA-o-gram Generator, I will illustrate what a defective gene looks like, and how ribosomal readthrough can fix it.

The DNA-o-gram generator is a website that uses the principles of the genetic code to encode basic messages written in English into DNA. It can be used to demonstrate different kinds of genetic mutations.

Consider the following DNA sequence:

 CAGCTTGACTAAGCGCGTGTTCTTATGGACGCGTAACTCGGCGTCCTTGTG

In the language of the DNA-o-gram generator, it codes for the message:

Regulate glucose levels.

Now, consider what happens when we mutate the code as follows:

 CAGCTTGACTAAGTGCGTGTTCTTATGGACGCGTAACTCGGCGTCCTTGTG

The new message is:

Regu.ate glucose levels.

This is called a premature stop, because the period in the middle of the message causes it to get cut-off and destroyed. The result of the mutation in this fictional case might be loss of ability to regulate insulin, resulting in diabetes.

 

As I mentioned above, there are multiple signals to indicate stop messages, so companies like PTC are developing drugs to encourage ribosomes to address mutations

Another type of mutation is the frameshift mutation, where one or two letters in the DNA sequence is added or removed (the DNA sequence is read in threes). The result is that everything downstream of the mutation is garbled. For example:

 CAGCTTGACTAAGCCGCGTGTTCTTATGGACGCGTAACTCGGCGTCCTTGTG

is transcribed as:

Regukl51xnYrHZaW5

These are more prevalent than premature-stop mutations and will likely be far more difficult to resolve, but there are other companies focusing on developing drugs to help ribosomes address frameshifts as well.

What I find most interesting about ribosomal readthrough is that drugs addressing the errors can potential treat multiple diseases. This means that ribosomal readthrough drugs are potential ‘magic bullets,’ with the ability to be used across different conditions.

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

Seeds, food and trade wars: Public opinion and policy responses in the USA and Europe

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ABSTRACT: The political debate over genetically modified foods entered a new phase when the USA (under the Bush Administration) threatened legal actions within the World Trade Organization (WTO) against a moratorium of these products in the European Union. This paper focuses on developing a societal context in which these political disputes arose though an investigation of public opinion polls conducted in both the USA and Europe...

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

Drug Patent Expirations for January 2014

TradenameApplicantGeneric NamePatent NumberPatent Expiration
EPIVIR-HBVGlaxosmithklinelamivudineRE39155*PEDJan 2, 2014
MICARDISBoehringer Ingelheimtelmisartan5,591,762Jan 7, 2014
TWYNSTABoehringer Ingelheimamlodipine besylate; telmisartan5,591,762Jan 7, 2014
COMBIPATCHNovartisestradiol; norethindrone acetate6,024,976Jan 7, 2014
GLUCOTROL XLPfizerglipizide5,591,454Jan 7, 2014
VIVELLE-DOTNovartisestradiol6,024,976Jan 7, 2014
MICARDIS HCTBoehringer Ingelheimhydrochlorothiazide; telmisartan5,591,762Jan 7, 2014
RAPAMUNEPf Prism Cvsirolimus5,100,899*PEDJan 7, 2014
MINIVELLENovenestradiol6,024,976Jan 7, 2014
ATACANDAstrazenecacandesartan cilexetil5,534,534*PEDJan 9, 2014
ATACAND HCTAstrazenecacandesartan cilexetil; hydrochlorothiazide5,534,534*PEDJan 9, 2014
PRECEDEXHospiradexmedetomidine hydrochloride4,910,214*PEDJan 15, 2014
SANDOSTATIN LARNovartisoctreotide acetate5,538,739*PEDJan 23, 2014
XYZALUcb Inclevocetirizine dihydrochloride5,698,558*PEDJan 26, 2014
DULERAMerck Sharp Dohmeformoterol fumarate; mometasone furoate6,677,323Jan 27, 2014
NORVIRAbbottritonavir5,541,206*PEDJan 30, 2014
NORVIRAbbvieritonavir5,635,523*PEDJan 30, 2014
KALETRAAbbvielopinavir; ritonavir5,541,206*PEDJan 30, 2014
NORVIRAbbvieritonavir5,541,206*PEDJan 30, 2014
NORVIRAbbvieritonavir5,674,882*PEDJan 30, 2014
BETAXONAlcon Pharms Ltdlevobetaxolol hydrochloride5,540,918*PEDJan 30, 2014
*Drugs may be covered by multiple patents or regulatory protections. See the DrugPatentWatch database for complete details.

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In the wake of the repositioning of Maryland’s Shady Grove Incubator from biotechnology to cyber security, Virginia has stepped up with a new biotechnology incubator.

The Prince William Science Accelerator, located adjacent to George Mason University, will be the only public-private commercially available property featuring wet laboratory spaces in the Northern Virginia region for the life sciences.

Maryland has long been a stronghold of biotechnology in the DC area, and it will be interesting to see if this repositioning of assets will help drive more biotechnology development in northern Virginia.

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.

Last April, I wrote here about the paradox of cancer research funding where over $100 billion in R&D funding for genomic targeting of cancer tumors has yielded only modest gains for cancer patients.   Despite the persistent lack of progress in curing most metastatic forms of cancer, risk averse, sclerotic, funding policies continue to throw good money after bad.  As Nobel laureate Jim Watson points out:

“Targeted biological therapies don’t kill cancer cells, they are not curing cancer and it is unlikely that they can be made to do so in a practical or comprehensive way in the near future. It’s time for a change in strategy. We know the current approach is not working, because on the whole it has made no dent in cancer mortality.”

Now it looks like there is at least modest attention  being given to an alternative approach to cancer R&D relating to the critical tumor suppressor protein, p53 (also cited by Watson).

Professor Sir David Lane first discovered the p53 protein in 1979, dubbing it “the guardian of the genome,” for the important role the protein plays in monitoring  health of cells and preventing cancer.  Mutation or deletion of p53 is highly correlated with growth of a majority of human tumors, and up to 90% of tumors for some cancer sub-categories like ovarian cancer. Overall, Lane asserts that “nearly every tumor has an affected or moderated p53 pathway,”

Finding ways to reactivate the key p53 protein has long been considered one of the ‘holy grails’ of cancer research.  Now as reported by the New York Times, a number of the largest bio-pharma companies –  including Roche, Merck, and Sanofi – are working actively on therapeutic approaches relating to reactivation of the p53 protein and effective against a range of cancer tumors.

Although not mentioned in the New York Times Article, a much smaller company,  Cellceutix, may have the most promising p53 compound currently in human clinical trials at Harvard’s Dana Farber Cancer Center and Beth Israel Deaconess Medical Center.

Additional academic and bio-pharma start-ups also are pursuing p53 therapies at various stages of discovery and pre-clinical research.

These new therapies all focus on reactivation of the critical p53 tumor suppressor protein, responsible for controlling cell death and long recognized as the archetype of a molecular defect commonly associated with cancer tumors.  If successful, this approach to develop “guardian of the genome” therapies would be a major departure from the genetic typing of tumors to a more holistic approach across cancer sub-types.

Renewed focus on p53 tumor suppressor therapies could truly be the start of a new golden age of cancer R&D that would bring more meaningful benefits to patients in the United States and globally – and coming not a moment too soon!

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.