Citibank's managing director for healthcare, Andrew Baum, said that he was pleased with the pharma industry reductions of internal research and greater emphasis on externalization.
But he sees the challenge of demonstrating value as the biggest challenge facing our industry. Delivering affordable valu e will require a very different paradigm. "The impact of taking a 20% price reduction or anything that reduces profit by 20% kills the economic value of a molecule."
I see this pressure to demonstrate value influencing what partners want to see - they want the out-licensor to give them comfort that the products will be reimbursed. This means early thinking about the market, the differentiation and value is really key to getting partnered.
DEAL: Onconova and Baxter sign European deal for Phase III cancer drug
Onconova Therapeutics gets $50 million in upfront funding, plus $515 million in milestones that could pay out before the kinase inhibitor in Phase III for MDS is commercialized. Subsequent sales milestones and royalties could add more value to th
e deal. Baxter (BAX, NYSE) receives full rights to all indications of Estybon (rigosertib) in 32 countries, including the full European and adjoining territories such as Norway, Switzerland and Turkey. Baxter took a $50 million equity position in Onconova in a separate deal last month.
Onconova keeps the rights to the US, having already partnered Japan and S. Korean rights with SymBio. The Lymphoma and Leukemia Society has also been a partner, supporting development in MDS. Additional indications are in trials as is an oral formulation.
Baxter gets a path to begin its expansion outsi de it
s established blood products business, with an orphan drug that will fit its hematology sales force. Oncology sales are growing, and, with survival still a typical endpoint, high unmet need (and reimbursement for value) remains.
Corporate VC investments back up for Q2
After 3 straight quarters of declining deals and funding to healthcare, Corporate VCs increased their healthcare deals and dollars, up 50% and 93% respectively vs. Q1 2012. Perennial #2 Massachusetts stumbled on deals and funding to healthcare in the quarter, however.