Category Archives: Targeted Delivery

Divestment wave continues as pharma banks on delivery systems

Posted on by

The wave of divestures sweeping the pharmaceutical industry continues following the most recent announcements by SurModics and Pfizer*.

Beleaguered drug delivery company SurModics recently announced the sale of its pharmaceutical assets (such as injectable delivery platforms and biodegradable polymer implants) to Evonik Industries AG for $30 million. The move comes as no surprise following SurModics’ Q3 Earnings Call announcement, as well as the series* of layoffs* the company undertook over the past year. SurModics claims the move will allow it to recover from Johnson & Johnson subsidiary Cordis’ discontinuation* of “one-time blockbuster drug” Cypher, by focusing on growing its Medical Devices and In-Vitro Diagnostics (IVD) business units. SurModics faces an uphill task on the road to recovery with declining revenue from its profitable Medical Devices unit, and as the IVD unit faces stiff competition in the marketplace.

Generic and specialty drug company, Mylan, recently acquired the rights to Pfizer’s dry powder respiratory drug delivery system used to treat chronic obstructive pulmonary disorder (COPD) and other respiratory illnesses. While the $17.5 million sum Mylan will pay Pfizer may not seem substantial, Pfizer will earn “far more” in royalties from products Mylan is expected to develop and commercialize using Pfizer’s platform, especially when over 50% of the $34 million global respiratory and COPD markets comes off patent by the end 2016. While Mylan will initially use the Pfizer platform to produce generic versions of GSK’s asthma and COPD treatments, it will eventually develop its own brand product and additional generic products. This divestment comes on the heels of Pfizer’s sale* of its Capsugel platform, and the shuttering of its largest R&D plant in the U.K. as it struggles to slash $1 billion from its R&D budget. Expect Pfizer’s woes to continue when Lipitor comes off patent at the end of the year – although the profit sharing clause with Mylan will provide much-needed cash infusion. As Pfizer illustrates, drug delivery systems offer pharma companies a lifeline as traditional revenue streams dry up.

In the wake of declining revenues and patent expiries*, pharma companies like Pfizer will need to expand beyond their core business and seek additional revenue streams by turning to delivery systems. Considering this trend – as well as the increasing number of startups thirsting* for funding - clients have an opportunity to seek out promising technologies, whether through co-development partnerships or licensing new drug delivery platforms.

* Client registration required.

 

Share this
Facebook facebook   Twitter twitter   Email email   Linkedin linkedin  

Oncolytic virotherapy – a new weapon in the war against cancer?

Posted on by

Genetically engineered viruses capable of selectively targeting cancer cells while leaving healthy cells unharmed are gaining popularity as a promising oncolytic treatment. San Francisco-based biotech firm Jennerex debuted JX-594, a genetically engineered virus that can selectively target tumors and cancerous cells without affecting healthy tissue. JX-594, derived from a virus strain once used in the smallpox vaccine, attacks and lyses cancerous cells after viral replication, reducing blood supply to the tumor and increasing the body’s immune response. Administered intravenously, JX-594 has the potential to prevent metastasis. Back in May, Jennerex announced the success of its Phase I clinical trials and has partnered with French biopharmaceutical firm, Transgene, for Phases IIb and III. JX-594 is currently being tested on patients with liver cancer and metastatic colorectal cancer (mCRC). Transgene is set to receive European commercialization rights, and hopes to market the drug by 2015. Jennerex is working on additional viral strains targeting other cancers, including pancreatic and prostate cancers.

In related news, CZ BioMed, a Florida startup, recently introduced RVLYSIN, a line of oncolytic viruses targeting various cancers. RVLYSIN is a genetically engineered virus derived from the common cold virus. Early results demonstrate that RVLYSIN localizes to tumor cells and kills them primarily through lysis. Lysis triggers a subsequent systematic anti-tumor response, including attracting high local concentrations of interferon (IFN) to protect healthy cells by limiting viral replication. CZ BioMed also claims RVLYSIN can induce apoptosis in tumor cells. Currently in the pre-clinical stage, CZ BioMed demonstrated PANRVLYSIN (its product targeting pancreatic cancer) is well tolerated in mice. The company is seeking interested partners to initiate Phase I trials.

Although oncolytic viruses promise minimal side effects (similar to a cold) and potential to replace chemotherapy, concerns remain over dosage and efficacy. JX-594 and RVLYSIN share the same primary mechanism – lysis. And cancer cells are a preferred host due to their rapid growth and vulnerability to a second infection (for certain types of cancer). At this early stage, results have largely been inconclusive, as researchers continue investigating the relationship between therapeutic effect and level of viral replication. Another key concern is the possibility of the tumor returning if the immune system manages to fight off the virus. Other oncolytic viruses in development – including Amgen’s OncoVex and Oncolytics Biotech’s Reolysin, both currently in Phase III trials – require direct injection into the tumor and additional chemotherapy, respectively. Clients interested in oncolytic virotherapy should stay tuned as we reach out to Jennerex and CZ BioMed for full briefings.

Share this
Facebook facebook   Twitter twitter   Email email   Linkedin linkedin  

The Lux Top 10: Q3′ 11

Posted on by

In the third quarter of 2011, Lux Research analysts profiled 286 companies in 11 different emerging technology sectors. Here are the 10 they thought were the most compelling. Some are already enjoying great commercial success, and should continue to do so. Others are promising upstarts that could yet fail but have the potential to achieve great things. Let us know your thoughts and watch this space for the next quarter’s results.

1. Semprius – Positive – Solar systems

If the company can maintain high yields in automated mass manufacturing, it will have the market’s most attractive high-concentration PV module.

2. Qingdao Institute of Bio-energy and Bioprocess Technology, Chinese Academy of Sciences – Positive – China Innovation, Alternative Fuels

With multinationals such as Boeing and Shell undertaking joint research partnerships, Qingdao has emerged as a leading Chinese institute in alternative fuel technologies.

3. Ice Energy – Positive – Green Buildings

As a complete solution provider of ice-based thermal storage systems for peak-demand load shifting, Ice Energy has secured valuable channels to market via partnerships with Trane and Carrier.

4. Oxis Energy – Wait and See – Electric Vehicles

Although still too early in development to declare success, next-generation energy storage solutions are potentially disruptive in the transportation market, and UK-based Oxis Energy could be one of the first to reach market with its lithium-sulfur battery.

5. Aerogen Therapeutics – Strong Positive – Targeted Delivery

Aerogen is targeting both health and consumer applications, as well as the medical device market, with a versatile electronic micropump technology that aerosolizes liquid drug formulations.

6. Modumetal – Strong positive – Advanced Materials

This leading developer of electroplated metal coatings has shown great savvy in procuring high-profile customers and partners across the aerospace/defense, automotive, and oil and gas industries, despite long development lead times.

7. Sensus – Strong Positive – Smart Grid

A dominating player in the North American advanced metering infrastructure market that spans the entire value chain.

8. Breivoll Inspection Technologies – Wait-and-see – Water

Technology adoption in the $20 billion water infrastructure repair market is notoriously slow, but is inspiring innovations from the likes of Breivoll, which has developed a nondestructive metal water pipe profiling to locate and fix water system weak points before they cause blowouts.

9. E-Ink – Strong Positive – Printed Electronics

Having captured most of the market for e-reader displays with its electrophoretic film technology, E-Ink is looking to other applications as the leisure e-reader market saturates.

10. Avantium – Positive – Bio-based Materials and Components

With its novel furanic platform, Avantium is pushing towards the polyester markets and fanning the flames of the drop-in versus novel chemical debate.

Share this
Facebook facebook   Twitter twitter   Email email   Linkedin linkedin  

VC contributions decline as overall investment in targeted delivery accelerates past $4 billion

Posted on by

Funding for targeted delivery and formulation technology companies exceeded $724 million in 2010, bringing total investment since 2000 to $4.1 billion. During this period venture capitalists have represented a notably declining share of overall investment. After peaking at 51% in 2005, the percentage that venture capitalists (VC) contributed dropped to just 22% last year. Meanwhile, as this week’s graphic illustrates, the venture funding that was invested over the past several years increasingly went toward later stage rounds.

Between the years 2004 and 2010, a total of 96 VC financing rounds took place in the targeted delivery space. The year 2007 marks the peak annual total of twenty VC-backed transactions, half of which were A/seed rounds of financing averaging $6.9 million.

The following year, 2008, the number of A/seed rounds dropped to six, but their average value rose to $9.3 million. Even so, later stage investment was already outstripping A/seed funding – both in terms of the number of deals and their average value. The year 2008 saw five B rounds averaging $15.4 million, three C rounds averaging $7.7 million, and one D round worth $21.9 million. Only one A/seed round was secured in 2009 (for $12 million), but there were five B rounds averaging $10.1 million and three C rounds averaging $35 million.

Last year, A/seed rounds disappeared altogether. Of the thirteen venture deals made in 2010, four B rounds and seven C rounds went to companies like Amplyx*, which received $1.5 million in Series B financing for its chemical modification technology, and polymer nanoparticle company Cerulean Pharma*, which received $24 million in Series C financing in November.

* Client registration required.

Source: Lux Research report “Homing In on Targeted Delivery Investment Opportunities.”

 

Share this
Facebook facebook   Twitter twitter   Email email   Linkedin linkedin  

Materials suppliers follow consumer brand owners into synthetic biology

Posted on by

Consumer goods material suppliers continue to turn to synthetic biology for advanced products and delivery systems. A few months ago at the Metabolic Design summit, Steve He, who is responsible for acquisition of sustainability technologies at Henkel, said the company is collaborating with Arizona State University to see whether CO2-fed algae could synthesize high-value, renewable oils, and surfactants.

Elsewhere, Evolva’s Pascal Longchamps described the company’s synthetic biology platform, and how it’s applied for partners like Roche (cancer drugs), BASF, and the U.S. Army (antimicrobials). The company creates yeast artificial chromosomes (eYACs) that combine genes from “trees, from coral, from the brain” – apparently not meant as casual examples – into one new organism. For example, Evolva has developed a pathway for producing Stevia (a sweetener found in certain plants) in yeast. The company was collaborating with Abunda*, which it acquired in April.

We also spoke with Marcus Wyss of DSM Nutritional Products, which aims to become the cosmetic industry’s leading supplier by building a product portfolio with designed metabolic processes. The company is a sponsor of the BioFAB consortium based at SynBERC, and it is also contemplating agricultural waste as a feedstock for bio-based chemicals and materials. Also, Wyss specifically said DSM’s recent acquisition of Martek will bring “significant improvement” to its algal biotechnology abilities.

Lastly, we noted that Roquette’s partnership with Solazyme* has deepened into a JV, as successful partnerships often do (see the report: “Green Materials’ Social Networks”)*.

These examples of how bio-based materials and chemicals suppliers are supporting brand owners only appear cutting-edge. In reality, brand owners are leading the suppliers. Procter and Gamble has been using genomics and proteomics technology since the 1990s, even publishing papers on the subject. In the last twelve months, it struck a supply deal with Amyris, invested in personal genomics company Navigenics *, and opened a collaboration with the Institute for Systems Biology to study skin conditions ranging from aging to cancer. Similarly, Unilever has been acting like a drug company* for several years*. It is now using controlled-release biopolymers to deliver encapsulated lipids,* and investing* in its partner Solazyme*.

We expect to see more companies use biotechnology to improve food and cosmetics by blazing new routes to known and new substances, applying delivery technologies to improve substance benefits, and using their products as delivery technologies in and of themselves. These strategies are part of the broader trend of convergence of food, cosmetics, chemicals, and medicine, driven aggressively by BASF* and DSM*. Clients should note that these technologies are maturing at an opportune moment for companies looking to enter pharmaceuticals, as the collapse of drug majors clears the way for new entrants from delivery,* consumer products, and even the electronics industries*.

* Client registration required.

Share this
Facebook facebook   Twitter twitter   Email email   Linkedin linkedin  

Elan transplants its drug-delivery unit to Alkermes, swapping profit for risk

Posted on by

Elan has evidently found a buyer for its drug-delivery unit, Elan Drug Technologies (EDT), in the form of drug-delivery specialist Alkermes. At a bid of $960 million, the proposed deal lands at the low end of the range that analysts had forecast when Elan first announced plans to sell off the group (see the [April 20, 2010 LRTJ – client registration required).

Elan is not profitable and has only one strong candidate drug in its pipeline: Bapineuzumab for treating Alzheimer’s. As we noted last August, when the company retreated citing adverse market conditions, divesting EDT leaves Elan focused solely on neurological drugs – a vastly riskier technical and financial proposition (see the August 24, 2010 LRTJ – client registration required). At the same time, the already-profitable EDT will convert Alkermes’ once certain 2012 loss into a profit.

At first blush, it may seem counter-intuitive for Elan to swap profit for risk in this way. At second, third, and fourth blush, it still seems that way. Given the failure of so many neurological drugs in late-stage trials – not to mention past product failures and even deaths for Elan – and the company’s still-meager means to take a drug to market, it’s bewildering that the company would bet everything on a cure for an intractable, slow-to-develop disease like Alzheimer’s. The only saving grace of the deal with Alkermes is that it makes Elan a more attractive takeover target for its partner Johnson & Johnson, which is deeply tethered to Elan. But barring a remarkable success with Bapineuzumab, there is little hope that Elan will survive the major self-surgery it has just undergone.

Share this
Facebook facebook   Twitter twitter   Email email   Linkedin linkedin  

Partnerships will drive success in targeted delivery, but what drives successful partnerships?

Posted on by

Graphic of the WeekThe large drugmakers that have epitomized health for a century are in terminal decline, having adhered too long to a blockbuster-drug model that is now failing catastrophically. Today, firms like AstraZeneca and Pfizer face a $143 billion patent cliff and have run out of room for organic growth, forcing them to consolidate rapidly. But this hardly means the end of medicine – on the contrary, conventional medicine’s collapse is opening up new spaces for more personalized, humane, affordable, and effective healthcare.

In the latest report from our Targeted Delivery Intelligence Service, we explain how today’s partnerships will shape tomorrow’s growth in the pharmaceutical industry. While large and small players agree that collaboration is critical to future success, this week’s graphic illustrates that their expectations and perspectives on partnerships vary wildly. Perspectives on collaboration also vary across market sectors, as well, as exhibited by these other select findings from the report:

  • Pharmaceutical players are naïve about targeted delivery partnerships. Despite its history of developing new active ingredients through partnerships, the pharmaceutical industry has failed to capitalize on new delivery technologies. Drugmakers that survive consolidation will learn how consumer products companies use delivery technologies to improve convenience and usability – especially when developing products for chronic and lifestyle diseases like asthma, diabetes, and high cholesterol, where patient compliance is key to healthy outcomes.
  • Back-end loaded deal structures are more common in consumer markets. Clear project milestones are important to successful partnerships in consumer products and personal care, since the time to payback is shorter. Instead of pharma’s upfront payment model, partners pay royalties, since products get to market faster and see sales sooner.
  • Partnerships in emerging markets like China are both essential and challenging. Intellectual property laws, government regulations, and cultural values are just some of the challenges to tapping targeted delivery opportunities in China. Gaining insight from local presence, partnerships with leading universities, and hiring to leverage local know-how are important best practices for this and other emerging markets like the Middle East and India.

Source: Lux Research report “Growing Delivery Partnerships and Alliances.” (client registration required.)

Share this
Facebook facebook   Twitter twitter   Email email   Linkedin linkedin  

MicroCHIPs initiates first clinical trials for implantable delivery system; questions remain

Posted on by

In late January, MicroCHIPs began clinical trials in Denmark for controlled delivery of an active ingredient from a programmable implant system. Specifically, the trial will deliver Eli Lilly’s osteoporosis drug Forteo using the start-up’s technology. Current treatment of the drug calls for daily injections, a scary option for patients who shudder at the sight of needles. 

The brainchild of Robert (Bob) Langer, Michael Cima, and John Santini, MicroCHIPs has raised more than $70 million since inception in 1999, primarily from VC and corporate investors. The company hopes its commercial device – implanted in patients using a local anesthetic – will automatically deliver measured doses for an entire needle-free year. Over the course of the current study, patients will receive a series of timed doses of parathyroid hormone using a handheld wireless communication device to confirm dose delivery.

A year ago, we spoke with John Santini, MicroCHIPs’ CEO at the time (see the February 23, 2010 LRTJ – client registration required). He told us that the company expected to enter clinical trials in 2010. Since then, John has left the company to head up a recently established JV – On Demand Therapeutics – between a VC firm and MicroCHIPs. In the meantime, word on the street is that MicroCHIPs has downsized dramatically – from 20 employees last year to only four. It has had problems maintaining a hermetic seal on the device and faced problems with peptide stability, formulation, and loading and dosing of the drug onto the chip. A lot has happened in the last year, so stay tuned as we reach out to MicroCHIPs (and On Demand Therapeutics) for an update.

Share this
Facebook facebook   Twitter twitter   Email email   Linkedin linkedin  

Spider silk: An early-stage, innovative drug-delivery material

Posted on by

We reported last month on the progress in using artificial spider silk for high-performance material applications (see the December 7, 2010 LRBJ – client registration required). Now a recent paper in the journal Biomaterials has presented another application: drug delivery.

According to the paper, researchers at Universität Bayreuth and Ludwig-Maximilians-Universität formed spheres of recombinantly-produced, genetically-engineered spider silk proteins to test their usefulness as drug-delivery vehicles. The spider silk material is nontoxic, unlike many of the synthetic polymer-based delivery materials it would replace (such as polyethylene glycol [PEG]). The toxicity of these conventional materials derives from their inherent chemistry, the solvents used to manufacture them, or from the acid products they produce when they degrade.

The researchers mixed spider silk proteins with model drugs (such as the analgesic acetaminophen) in water at room temperature and neutral pH, and found that positively charged, hydrophobic drugs bound well to the protein fibers as they formed nano- and microspheres (170 nm to 700 nm). In tests of the particles’ controlled-release activity, researchers found that they released some drugs over a period of 30 days. Notably, they saw only a very small drug burst, after which the particles released a steady amount (about 5% of the loaded molecules) per day within the first week. The researchers also found that naturally-occurring enzymes (elastase and trypsin) degraded the spider silk.

While this in vitro research is very early-stage, it’s noteworthy that spider silk apparently has the potential to control the delivery of a variety of active molecules in so many applications. The benign conditions under which the material can be loaded, its biodegradability, and the compatibility with various matrices means it could find use in oral drugs and food, as well as implants and transdermal patches. Looking beyond this research, highly novel future devices might be made possible by combining the delivery spheres with structural spider silk such as that being developed by companies like Refactored Materials. For now, clients should monitor the space for follow-on development.

Share this
Facebook facebook   Twitter twitter   Email email   Linkedin linkedin  

Future of the China medical device industry has a mixture of challenges and opportunities

Posted on by

There was no shortage of insights about the emerging Chinese market at last month’s [Medical Device & Diagnostics Symposium 2010 in Waltham, MA. Sponsored by several Chinese-based organizations such as the Chinese-American BioMedical Association (CABA), the event hosted speakers such as Xuan Kong, Vice President of NeuroMetrix Inc, and Philip Zhang, co-founder of Milstein Zhang & Wu.

Xuan touch on universal business risks (e.g. satisfying multiple parties, including patients, physicians, insurance providers, and the U.S. Food and Drug Administration) and clinical/regulatory risks (i.e. standard of care vs. enabling technologies). But he also discussed challenges of entering emerging markets, such as China, where he emphasized the importance of having a viable business model, marketing, distribution, and IP protection.

Philip also discussed the importance of IP protection in medical devices, highlighting the importance of the “freedom to operate” before briefly outlining the patent law system in China. Several distinctive characteristics include the oriental philosophy (meaning no one shall own the power and fruit of intelligence) and double standard – strong on paper, but weak in enforcement. See Lux Research’s report “Taming the Water Dragons: Opportunities and Challenges in the Chinese Water Sector for more on this. (client registration required).

Due to the absence of a scheduled speaker, the symposium failed to touch on investment opportunities in the medical device industry, especially in China. But our research reveals potentially huge opportunities fueled by increasing demand from a fast-aging population, rising income, and on-going healthcare reform; a cheap but capable workforce from local graduates as well as the waves of Chinese returnees from overseas incentivized by China’s Thousand Talents Program; and China’s disadvantage in technology and innovation. There are overwhelming advantages for multinational corporations in high-end instruments, such as magnetic resonance imaging, as well as for local companies in low-end products, such as medical disposables. Further opportunities await in China’s market for mid-end and/or affordable high-end medical devices (such as GE’s B30 patient monitor, as well as in the country’s small cities/rural areas. Among the possible strategies for market entry: local partnerships like Weigao’s partnership with Medtronic, and local innovations, such as [GE’s multiple R&D centers in China (see the November 30, 2010 LRTJ – client registration required).

Share this
Facebook facebook   Twitter twitter   Email email   Linkedin linkedin