How bio­phar­ma com­pa­nies use NIH and vice ver­sa

An ar­gu­ment has been brew­ing on Capi­tol Hill and else­where that boils down to the the­o­ry that US tax­pay­ers are fronting bil­lions of dol­lars’ worth of pub­lic re­search that trans­lates in­to ear­ly-stage prod­ucts that are lat­er sold to com­pa­nies, go on to win FDA ap­proval and then reap mil­lions or bil­lions in sales, al­though the gov­ern­ment nev­er sees a dime of those earn­ings.

With the help of a new Con­gres­sion­al Re­search Ser­vice (CRS) re­port pub­lished Fri­day and some oth­er ma­te­ri­als, Fo­cus can break down what’s hap­pen­ing.

1. Do tax­pay­ers pay for bil­lions in re­search?

Yes. In FY 2018, the Na­tion­al In­sti­tutes of Health (NIH) had a bud­get of more than $34 bil­lion to sup­port more than 300,000 sci­en­tists and re­search per­son­nel work­ing at over 2,500 in­sti­tu­tions across the US and abroad. And from FY 1998 to FY 2003, Con­gress dou­bled the NIH bud­get. The to­tal NIH ap­pro­pri­a­tion for FY 2019 is $39 bil­lion.

2. Does NIH re­search trans­late in­to ear­ly-stage prod­ucts?

Some­times. And here’s where the quan­tifi­ca­tion of NIH’s work gets tricky.

As the CRS re­port notes, over 50% of NIH fund­ing sup­ports ba­sic re­search, mean­ing, “NIH fund­ed re­search is, to a greater ex­tent, in­di­rect­ly in­volved—by gen­er­at­ing sci­en­tif­ic knowl­edge and in­no­va­tions that aid in phar­ma­ceu­ti­cal de­vel­op­ment. For ex­am­ple, im­por­tant ba­sic ad­vances in re­search, such as re­com­bi­nant DNA, can lead to the de­vel­op­ment of whole new class­es of drugs.”

But drugs with a patent held by NIH or NIH-fund­ed re­searchers rep­re­sent a small por­tion of all ap­proved drugs by the US Food and Drug Ad­min­is­tra­tion (FDA). A Health Af­fairs study from 2011 found that 9% of the new drugs ap­proved by FDA from 1988 to 2005 were based on a patent held by ei­ther a gov­ern­ment agency or a non­govern­men­tal in­sti­tu­tion that had re­ceived gov­ern­ment sup­port.

An­oth­er study from the New Eng­land Med­ical Jour­nal in 2011 found that of the 1,541 drugs ap­proved by FDA from 1990 through 2007, 143, or 9.3%, re­sult­ed from work con­duct­ed in pub­lic sec­tor re­search in­sti­tu­tions, in­clud­ing all uni­ver­si­ties, re­search hos­pi­tals, non­prof­it re­search in­sti­tutes and fed­er­al lab­o­ra­to­ries in the US.

But when the di­rect and in­di­rect im­pact of NIH fund­ing is con­sid­ered, the re­sults show a larg­er NIH im­pact. For in­stance, a PNAS study from 2018 found that NIH was “di­rect­ly or in­di­rect­ly as­so­ci­at­ed with every one of 210 NMEs [new mol­e­c­u­lar en­ti­ties] ap­proved from 2010-2016.”

Sim­i­lar­ly, 2018 study de­ter­mined that NIH in­vest­ments in a par­tic­u­lar re­search area in­crease sub­se­quent pri­vate sec­tor patent­ing in that area—a $10 mil­lion in­crease in NIH fund­ing for a re­search area re­sults in 2.7 ad­di­tion­al patents.

But as NIH’s Steven Fer­gu­son not­ed in the Jour­nal of Com­mer­cial Biotech­nol­o­gy in 2012, it’s not as if NIH can take these ear­ly-stage prod­ucts to mar­ket. And as with bio­phar­ma com­pa­nies, the num­ber of fail­ures con­tin­ues to heav­i­ly out­num­ber the ap­provals. Fer­gu­son said: “Be­cause many, if not most of the tech­nolo­gies de­vel­oped at the NIH and FDA, are ear­ly stage bio­med­ical tech­nolo­gies, the time and de­vel­op­ment risks to de­vel­op a com­mer­cial prod­uct are high.”

3. Does NIH make mon­ey from its ear­ly-stage prod­ucts?

Yes. From 1988 to 2004, NIH en­tered in­to al­most 2,500 li­cense agree­ments and gen­er­at­ed more than $500 mil­lion in roy­al­ty rev­enues. More re­cent­ly, roy­al­ties have amount­ed to more than $100 mil­lion per year.

NIH’s Of­fice of Tech­nol­o­gy Trans­fer FY 2014 an­nu­al re­port ex­plains how roy­al­ties col­lect­ed on prod­uct sales, pri­mar­i­ly drugs and bi­o­log­ics, ac­count for 84% of the $138 mil­lion in roy­al­ties col­lect­ed in 2014. And the three best-sell­ing prod­ucts uti­liz­ing tech­nol­o­gy li­censed from NIH that year were Janssen’s Prezista, a nov­el pro­tease in­hibitor for the treat­ment of HIV-1 in pa­tients who are non-re­spon­sive to ex­ist­ing an­ti­retro­vi­ral ther­a­pies, Mer­ck’s Gar­dasil, a vac­cine to pro­tect against cer­vi­cal can­cer, and As­traZeneca’s Synagis, a mon­o­clon­al an­ti­body for the treat­ment of Res­pi­ra­to­ry Syn­cy­tial Virus (RSV) in in­fants.

4. What else is com­ing?

Oth­er ques­tions are mount­ing now, in­clud­ing whether the roy­al­ties that NIH and oth­er gov­ern­ment agen­cies reap from its ear­ly-stage prod­ucts are ad­e­quate, and whether NIH should be able to step in and low­er the price of a prod­uct that it helped to de­vel­op.

Late last month, some are ques­tion­ing why the CDC is not reap­ing prof­its from patents it has on a li­censed HIV drug brought to mar­ket by Gilead. Gilead, how­ev­er, con­tends that the patents are in­valid.

More re­cent­ly, the Na­tion­al In­sti­tute of Stan­dards and Tech­nol­o­gy (NIST) is look­ing in­to the idea of clar­i­fy­ing that the gov­ern­ment can­not uni­lat­er­al­ly set prices for cer­tain phar­ma­ceu­ti­cals. The is­sue at hand con­cerns whether cer­tain reg­u­la­tions (nev­er used by NIH), un­der the Bayh-Dole Act, should be al­tered so the gov­ern­ment can­not con­trol the price of some phar­ma­ceu­ti­cals it helped to de­vel­op. Sev­er­al groups, in­clud­ing Doc­tors With­out Bor­ders, are push­ing back on those NIST changes.

CRS Re­port on NIH


First pub­lished in Reg­u­la­to­ry Fo­cus™ by the Reg­u­la­to­ry Af­fairs Pro­fes­sion­als So­ci­ety, the largest glob­al or­ga­ni­za­tion of and for those in­volved with the reg­u­la­tion of health­care prod­ucts. Click here for more in­for­ma­tion.

Im­age: NIH

Author

Zachary Brennan

managing editor, RAPS

Hal Barron and Rick Klausner (GSK, Lyell)

Ex­clu­sive: GSK’s Hal Bar­ron al­lies with Rick Klaus­ner’s $600M cell ther­a­py start­up, look­ing to break new ground blitz­ing sol­id tu­mors

LONDON — Chances are, you’ve heard little or nothing about Rick Klausner’s startup Lyell. But that ends now.

Klausner, the former head of the National Cancer Institute, former executive director for global health at the Gates Foundation, co-founder at Juno and one of the leaders in the booming cell therapy field, has brought together one of the most prominent teams of scientists tackling cell therapy 2.0 — highlighted by a quest to bridge a daunting tech gap that separates some profound advances in blood cancers with solid tumors. And today he’s officially adding Hal Barron and GlaxoSmithKline as a major league collaborator which is pitching in a large portion of the $600 million he’s raised in the past year to make that vision a reality.

“We’ve being staying stealth,” Klausner tells me, then adding with a chuckle: “and going back to stealth after this.”

“Cell therapy has a lot of challenges,” notes Barron, the R&D chief at GSK, ticking off the resistance put up by solid tumors to cell therapies, the vein-to-vein time involved in taking immune cells out of patients, engineering them to attack cancer cells, and getting them back in, and more. “Over the years Rick and I talked about how it would be wonderful to take that on as a mission.”

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 62,000+ biopharma pros reading Endpoints daily — and it's free.

First place fin­ish: Eli Lil­ly just moved to fran­chise leader with their sec­ond mi­graine drug OK in 1 year

In a rare twist for Eli Lilly’s historically slow-moving R&D group, the pharma giant has seized bragging rights to a first-in-class new drug approval. And all signs point to an aggressive marketing followup as they look to outclass some major franchise rivals hobbled by internal dissension.

The FDA came through with an OK for lasmiditan on Friday evening, branding it as Reyvow and lining it up — once a substance classification comes through from the DEA — for a major market release. The oral drug binds to 5-HT1F receptors and is designed to stop an acute migraine after it starts. That makes it a complementary therapy to their CGRP drug Emgality, which has a statistically significant impact on preventing attacks.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 62,000+ biopharma pros reading Endpoints daily — and it's free.

Patrick Mahaffy, Getty Images

Court green-lights Clo­vis case af­ter de­tail­ing ev­i­dence the board ‘ig­nored red flags’ on false safe­ty and ef­fi­ca­cy da­ta

Clovis investors have cleared a major hurdle in their long-running case against the board of directors, with a Delaware court making a rare finding that they had a strong enough case against the board to proceed with the action.

In a detailed ruling at the beginning of the month that’s been getting careful scrutiny at firms specializing in biotech and corporate governance, the Delaware Court of Chancery found that the attorneys for the investors had made a careful case that the board — a collection of experts that includes high-profile biotech entrepreneurs, a Harvard professor and well-known investigator as well as Clovis CEO Patrick Mahaffy — repeatedly ignored obvious warnings that Mahaffy’s executive crew was touting inflated, unconfirmed data for their big drug Roci. Serious safety issues were also reportedly overlooked while the company continued a fundraising campaign that brought in more than a half-billion dollars. And that leaves the board open to claims related to their role in the fiasco.

The bottom line:

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Allogene HQ Open House on September 17, 2019 in South San Francisco. (Jeff Rumans, Endpoints News)

The next 10 years: Where is biotech head­ed?

The last 10 years have seen a revolution in drug development. Timelines have shortened, particularly in oncology. Regulators have opened up. Investment has skyrocketed. China became a player. Biotechs have multiplied as gene and cell therapy has exploded — offering major new advances in the way diseases are treated, and sometimes cured.

So where are we headed from here? I journeyed out to San Francisco in September to discuss the answer to that question at Allogene’s open house. If the last 10 years have been an eye-opener, what does the next decade hold in store?

George Scangos / Credit: Cornell University

ARCH, Soft­Bank-backed Vir Biotech­nol­o­gy un­der­whelms with $143 mil­lion IPO

George Scangos went back to Wall Street, and came back 700 million pennies short.

Scangos’ vaunted startup Vir Biotechnology raised $143 million in an IPO they hoped would earn $150 million. Shares were priced at $20, the low-end of the $20-$22 target.

Launched with backing from ARCH Venture’s Robert Nelsen, Masayoshi Son’s SoftBank Vision Fund, and the Bill & Melinda Gates Foundation, the infectious disease startup was one of a new wave of well-resourced biotechs that emerged with deep enough coffers to pursue a full R&D line rather than slowly build their case by picking off a single lead program.

Bill Gates backs Gink­go Biowork­s' $350M raise to fu­el the buzzy syn­thet­ic bi­ol­o­gy 'rev­o­lu­tion'

If you want to understand Ginkgo Bioworks, the name should suffice: Bioworks, a spin off “ironworks,” that old industrial linchpin devoted to leveraging scale as a wellspring for vast new industries capable of remaking society. Ginkgo wants to be the ironworks for the revolution it’s heralded with as much fanfare as they can, playing off of one of the buzziest technologies in biotech.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 62,000+ biopharma pros reading Endpoints daily — and it's free.

UCB bags a ri­val to Soliris in $2.1B buy­out deal — but will an in­creas­ing­ly vig­i­lant FTC sign off?

UCB is buying out Ra Pharma $RARX, announcing an acquisition deal that rings up at $48 a share, or $2.1 billion net of cash, and puts them toe-to-toe with Alexion on a clinical showdown.

Ra shares closed at $22.70 on Wednesday.

There’s a small pipeline in play at Ra, but UCB is going for the lead drug — a C5 inhibitor called zilucoplan in Phase III for myasthenia gravis (MG) looking to play rival to Alexion’s Soliris. Soliris has the market advantage, though, with a much earlier approval in MG in late 2017 that UCB feels confident in challenging.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 62,000+ biopharma pros reading Endpoints daily — and it's free.

A new play­er is tak­ing the field in a push for a he­mo­phil­ia A gene ther­a­py, and it’s a big one

BioMarin, the execs at Spark (and buyer-to-be Roche) as well as the Sangamo/Pfizer team have a new rival striding onto the hemophilia block. And it’s a big one.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 62,000+ biopharma pros reading Endpoints daily — and it's free.

Stuck with a PhI­II gene ther­a­py fail­ure at 96 weeks, Gen­Sight prefers the up­beat as­sess­ment

Two years after treatment, the best thing that GenSight Biologics $SIGHT can say about their gene therapy for vision-destroying cases of Leber Hereditary Optic Neuropathy is that it’s just a bit better than a placebo — just maybe because one treatment can cover both eyes.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 62,000+ biopharma pros reading Endpoints daily — and it's free.