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

Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

Daniel O'Day [via AP Images]

UP­DAT­ED: Gilead un­leash­es a $5B late-stage cash al­liance with Gala­pa­gos — lay­ing out O'­Day's R&D strat­e­gy

Daniel O’Day is executing his first major development deal since taking over as CEO of Gilead $GILD. And he’s going in deep to ally himself with a longstanding partner.

O’Day announced today that he is spending $5 billion in cash to add new late-stage drugs to Gilead’s pipeline, picking up rights to Galapagos’ $GLPG Phase III IPF drug GLPG1690 alongside adoption of the biotech’s Phase IIb drug GLPG1972 for osteoarthritis. And Gilead is also putting billions more on the table for milestones, gaining options for everything else in Galapagos’ pipeline, with a shot at all rights outside of Europe.

Altogether, Gilead is gaining rights to 6 clinical-stage assets, 20 preclinical programs and everything else being hatched in translation.

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Ab­b­Vie beefs up the on­col­o­gy pipeline, bag­ging an up­start STING play­er with its own unique ap­proach

AbbVie isn’t letting its $63 billion buyout of Allergan stop its M&A/deals team from continuing their work.

Monday morning we learned that the pharma giant is snapping up tiny Mavupharma out of Seattle, a Frazier-backed startup that has its own unique take on STING — which is on the threshold of their first clinical trial.

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Billing it­self as the first AI biotech to launch hu­man tri­als, Re­cur­sion adds $121M C round

Billing itself as the first AI biotech with programs in the clinic, Salt Lake City-based Recursion now has a $121 million bankroll to start gathering human data to see if it’s on the right track. 

“We’re trying to build this discovery engine,” Recursion CEO Chris Gibson tells me ahead of the C round news. “We now have the first two programs in the clinic.” And that, he adds, qualifies as a first for any AI establishment “that actually have something in the clinic.”

Hal Barron [File photo]

Hal Bar­ron's team at GSK scores a win with pos­i­tive Ze­ju­la PhI­II front­line study — now comes the hard part

Score one for Hal Barron and the new R&D team steering GlaxoSmithKline’s pipeline.

The pharma giant reported this morning that its recently acquired PARP, Zejula (niraparib), hit the primary endpoint on progression-free survival in a frontline maintenance setting for women suffering ovarian cancer — following chemo and regardless of their BRCA status.

GSK bet $5 billion on the Tesaro buyout primarily to get this drug, drawing the shaking heads of biopharma. Why pay a big premium for a drug like this when AstraZeneca was going from strength to strength with Lynparza, ran the argument, having won a hugely important accelerated approval to jump out ahead — way ahead — of the rest of the PARP players? Lynparza — now co-owned by a powerhouse cancer team at Merck — won the first approval in frontline maintenance in ovarian cancer.

FDA bats back As­traZeneca's SGLT di­a­betes drug for Type 1 di­a­betes — block­ing a class on safe­ty fears

The FDA has just fired its latest salvo at the SGLT class of diabetes drugs, blowing up some commercial opportunity at AstraZeneca as part of the collateral damage.

The pharma giant reported early Monday that the FDA has rejected its blockbuster drug Farxiga for Type 1 diabetes that can’t be controlled by insulin. And while the pharma giant maintained its usual grim silence in the face of a setback, this one should be easy to interpret.

Jonathan Symonds [via HSBC]

GSK to tap Jonathan Symonds as chair­man, lever­ag­ing Big Phar­ma ex­pe­ri­ence for con­sumer biz deal

Six months into its search for a new board chairman, GlaxoSmithKline has apparently found the perfect candidate in a seasoned executive groomed at AstraZeneca and Novartis. Jonathan Symonds is in the final stages of being appointed, Bloomberg reports.

In January Sir Philip Hampton announced his intention to step down and make way for a new leader to oversee the consumer health joint venture GSK is setting up with Pfizer. The deal — announced a month prior — would spin out the unit formerly headed by GSK CEO Emma Walmsley and merge it with the equivalent division at Pfizer to create a new entity to be listed separately.

UP­DAT­ED: Am­gen, No­var­tis scrap Alzheimer's stud­ies — is BACE fi­nal­ly dead or will Bio­gen and Ei­sai car­ry on?

The BACE theory of controlling Alzheimer’s died with failed pivotal projects at Merck, Eli Lilly and their partners at AstraZeneca. Now Amgen and Novartis have come along to bulldoze it under a mound of safety threats — leaving only Biogen and Eisai to carry on with a less than zero chance of success — with the notable addition that they may actually be doing harm to patients.

After the market closed Thursday, Amgen and Novartis announced that they were dumping two pivotal programs underway with the Banner Alzheimer’s Institute on their BACE drug CNP520 (umibecestat) after an independent review of the data indicated that patients’ cognitive abilities were actually worsening at a faster pace than the placebo arm.

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Christi Shaw at JP Morgan 2019. Jeff Rumans for Endpoints News

Fresh out of Eli Lil­ly, Christi Shaw sur­faces as Daniel O'­Day's new CEO at CAR-T pi­o­neer Kite

Well, that didn’t take long. 

We found out Thursday evening that Christi Shaw has given up her top post as the head of the Bio-Medicines group at Eli Lilly for the helm at CAR-T pioneer Kite. New Gilead CEO Daniel O’Day, a Roche veteran, had made finding a Kite CEO a top priority on his arrival at Gilead. And he went right for a headliner.

O’Day was clearly excited about the coup.

“We conducted an extensive search for a new leader at Kite and we believe that Christi’s unique set of skills will allow us to continue to build on our leadership position in cell therapy,” he said in a prepared statement. “Christi’s vast experience across complex therapeutic areas, and particularly in oncology, will serve Kite very well. She is clearly a leader who will bring teams and individuals together and I am confident she will build upon the entrepreneurial spirit at Kite as we seek to help more people with cancer around the world.”