The Shkre­li rule? FDA is ex­plor­ing whether se­lect­ed reim­por­ta­tion could crip­ple the drug prof­i­teers

Mar­tin Shkre­li was hauled in front of law­mak­ers, jailed on fraud con­vic­tions and sub­ject­ed to every known form of le­gal pres­sure af­ter hik­ing the price of Dara­prim by more than 5000%. But none of it worked to force him to back off a per­fect­ly le­gal strat­e­gy to gouge pay­ers on a nar­row­ly con­trolled gener­ic drug — where the sky is the lim­it on the price.

So now the FDA is ex­plor­ing a new op­tion, which in­volves a tac­tic that the drug in­dus­try — and many oth­ers in the gov­ern­ment — have long ab­horred.

In a state­ment out this morn­ing, the FDA says that it is as­sem­bling a work­ing group to con­sid­er whether reim­port­ing drugs from abroad may be the an­swer to the drug prof­i­teers. 

We want to ex­am­ine whether—un­der these nar­row con­di­tions—the ad­di­tion­al mar­ket com­pe­ti­tion from the short-term im­por­ta­tion of for­eign ver­sions of the drug may com­ple­ment the FDA’s cur­rent ef­forts, and help meet near-term pa­tient need in the U.S. un­til new com­pe­ti­tion is able to en­ter the do­mes­tic mar­ket.

Reim­por­ta­tion is noth­ing new. Many De­moc­rats have long sug­gest­ed that pa­tients in the US be al­lowed to buy drugs in for­eign mar­kets where sin­gle-pay­er sys­tems have forced down the price. The Trump ad­min­is­tra­tion and oth­ers, par­tic­u­lar­ly in the in­dus­try, have kicked back, say­ing it wouldn’t pro­vide a safe sup­ply of ther­a­pies. And drug man­u­fac­tur­ers, crit­ics add, wouldn’t al­low it any­way, cut­ting off any sup­pli­ers who might try.

FDA com­mis­sion­er Scott Got­tlieb, though, is pre­pared to con­sid­er us­ing reim­por­ta­tion for any oth­er Shkrelis that come along. 

Any pol­i­cy that in­volves the im­por­ta­tion of drugs would be tem­po­rary un­til ad­e­quate com­pe­ti­tion en­ters these cat­e­gories. Fur­ther­more, any re­sult­ing pol­i­cy would al­so be nar­row­ly tai­lored in or­der not to cre­ate the same risks of coun­ter­feits or oth­er un­safe drugs get­ting in­to the U.S. sup­ply chain as a broad­er im­por­ta­tion pol­i­cy would present. Our ul­ti­mate goal is to seek mul­ti­ple FDA-ap­proved and mar­ket­ed ver­sions of each med­ical­ly im­por­tant drug for which there are no block­ing patents or oth­er ex­clu­siv­i­ties.

That could prove in­ter­est­ing.

Shkre­li, the old Valeant, Mallinck­rodt and oth­ers have been known to spur dra­mat­i­cal­ly high­er prices. Where would the agency draw the line?

Would they go af­ter PTC Ther­a­peu­tics?

PTC bought an old, cheap steroid called de­flaza­cort from Marathon Phar­ma­ceu­ti­cals af­ter Marathon rolled it out for a stun­ning $89,000 an­nu­al price tag. PTC bagged it for $140 mil­lion up front, then set a vague net price of $35,000 based on the pa­tient’s weight — which could take some pa­tients past what Marathon want­ed to charge.

Marathon was ex­co­ri­at­ed for price goug­ing, but PTC has large­ly es­caped no­tice. Mean­while, there’s been grow­ing crit­i­cism of an­nu­al price hikes that are stan­dard in the in­dus­try — but that will al­most cer­tain­ly be off lim­its to reg­u­la­tors.

If the FDA does go for­ward against the prof­i­teers, though, it will be in­ter­est­ing to see where it draws the line.


Im­age: Scott Got­tlieb. AP IM­AGES

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

Once again Bischofberger and his old boss, former Gilead chief John Martin, added their own money to the new $105 million raise aimed at building up their R&D engine and the team who’s doing the drug discovery work — on both coasts. Also coming back is Arie Belldegrun, the biotech builder who sold Kite to Gilead for $12 billion, and now plays the role of global wheeler dealer who’s taking a shot at cracking the off-the-shelf CAR-T challenge at Allogene.

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Part club, part guide, part land­lord: Arie Bellde­grun is blue­print­ing a string of be­spoke biotech com­plex­es in glob­al boom­towns — start­ing with Boston

The biotech industry is getting a landlord, unlike anything it’s ever known before.

Inspired by his recent experiences scrounging for space in Boston and the Bay Area, master biotech builder, investor, and global dealmaker Arie Belldegrun has organized a new venture to build a new, 250,000 square foot biopharma building in Boston’s Seaport district — home to Vertex and a number of up-and-coming biotech players.

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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).

H1 analy­sis: The high-stakes ta­ble in the biotech deals casi­no is pay­ing out some record-set­ting win­nings

For years the big trend among dealmakers at the major players has been centered on ratcheting down upfront payments in favor of bigger milestones. Better known as biobucks for some. But with the top 15 companies competing for the kind of “transformative” pacts that can whip up some excitement on Wall Street, with some big biotechs like Regeneron now weighing in as well, cash is king at the high stakes table.

We asked Chris Dokomajilar, the head of DealForma, to crunch the numbers for us, looking over the top 20 deals for the past decade and breaking it all down into the top alliances already created in 2019. Gilead has clearly tipped the scales in terms of the coin of the bio-realm, with its record-setting $5 billion upfront to tie up to Galapagos’ entire pipeline.

Dokomajilar notes:

We’re going to need a ‘three comma club’ for the deals with over $1 billion in total upfront cash and equity. The $100 million-plus club is getting crowded at 164 deals in the last decade with new deals being added towards the top of the chart. 2019 already has 14 deals with at least $100 million in upfront cash and equity for a total year-to-date of over $9 billion. That beats last year’s $8 billion and sets a record.

Add upfronts and equity payments and you get $11.5 billion for the year, just shy of last year’s record-setting $11.8 billion.

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UP­DAT­ED: With loom­ing ‘apoc­a­lypse of drug re­sis­tance,’ Mer­ck’s com­bi­na­tion an­tibi­ot­ic scores FDA ap­proval on two fronts

Merck — one of the last large biopharmaceuticals companies in the beleaguered field of antibiotic drug development — on Wednesday said the FDA had sanctioned the approval of its combination antibacterial for the treatment of complicated urinary tract and intra-abdominal infections.

To curb the rise of drug-resistant bacteria and maintain the efficacy of the therapy, Recarbrio (and other antibacterials) — the drug must be used to treat or prevent infections that are proven or strongly suspected to be caused by susceptible gram-negative bacteria, Merck $MRK said.

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John McHutchison in 2012. Getty Images

The $1.1M good­bye: Gilead CSO John McHutchi­son is out as Daniel O’Day shakes up the se­nior team

Just a little more than a year after John McHutchison grabbed a promotion to become CSO at Gilead in the wake of Norbert Bischofberger’s exit, he’s out amid a shakeup of the senior team that is also triggering the departure of two other top execs.

Gilead stated that McHutchison “has decided to step down” from the job as of August 2nd. And their SEC filing notes that he’ll be getting a $1.1 million check to settle up on his contract.

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Thomas Gajewski, David Steinberg. (CRI, Pyxis)

Bay­er, Long­wood back star re­searcher's deep dive in­to the tu­mor mi­croen­vi­ron­ment for new I/O tar­gets

From PD-1 targeting to the RAS pathway to the STING complex, Thomas Gajewski has spent the past two decades of his career decoding the various ways the immune system can be unleashed to defend against cancer. So when the University of Chicago professor comes around to putting all his findings into a new platform for finding new targets, VCs and pharma groups alike pay attention.

“He’s been studying T cells for 20 years, plus he’s one of the world’s leaders if not the world leader in the space,” David Steinberg, partner at Longwood Fund, said. “Furthermore, let me add he did a lot of the foundational research and also some of the seminal clinical trials in the existing set of I/O agents. He understands the space really well, he understands the current strengths, and I think he understood really well what was missing, so he knew where to look.”

Kamala Harris speaking yesterday at the Des Moines Register Iowa Presidential Candidate Forum [via Getty]

Who’s the tough­est on drug prices? A game of po­lit­i­cal one-up­man­ship is dri­ving the pol­i­cy de­bate in Wash­ing­ton

Earlier this week we got a look at Senator Kamala Harris’ position on drug prices. She’s proposing that HHS take an average price from single-payer systems like the UK, Germany and Canada — which leverage market access for lower prices — and use that to set the US price. Anything drug companies collect above that would be taxed at a rate of 100%.

And the rhetoric is scathing:
While families struggle to make it to the end of the month, pharmaceutical companies are turning record profits. They’re spending nearly as much on advertising as R&D. They’re manipulating their market power to hike prices on lifesaving generic drugs. They’re making twice the profit of the average industry in America and still increased drug prices by 10.5% over the past six months alone. Meanwhile, they are charging dramatically higher prices to American consumers.
That’s an escalation on Joe Biden’s plan, which includes drug importation from those cheaper markets as well as allowing Medicare to negotiate prices — something that virtually all Dems agree on now.

SJ Lee [File photo]

Go­ing in­side cells, Sung Joo Lee has sketched some big goals for his small — but glob­al — team of drug hunters

For a small biotech based in South Korea with a research arm in Cambridge, MA, Orum Therapeutics has sketched out some big goals aimed at developing antibodies for intracellular targets. And now they have a new $30 million round to push the work forward, aiming at a slate of currently undruggable quests.

Orum has been working on a platform tech out of Ajou University that relies on endocytosis to smuggle antibodies and their cargo inside a cell. They’ve published work in Nature that illustrates its preclinical potential in RAS mutations, and KRAS is on their list of targets. 

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