<image003.jpg>David Charapp (see David's profile at Duane Morris) is an experienced transactions lawyer that I have enjoyed working with. Recently, in a piece in Law360, he offered 3 pieces of advice for working with your deal lawyer. Here are his key points and my shortened version of his discussion of each.
1) Use Your Deal Lawyer for the Term Sheet (and Use a Term Sheet in the First Place)
David notes that these short documents are cheaper to modify than big full agreements, and any issues the lawyer notices are easier to change early in the process than after they seem to have been accepted.
2) Ask Your Lawyer to Locate and Review Prior Agreements Signed by the Other Side
If the form and provisions of the other side are acceptable, starting with their language can make things easier. And this can stop a claim that "we never do that".
3) Send a Redline or Talk? Ask Your Lawyer for Advice
David points out that sometimes redlined agreements are sent back and forth with repeated rejections of the other arguments. It is often better to talk about the reasoning and try to find a solution before capturing it in the document.
These are all good points! I'd add that even for those of us who have worked on quite a few deals, the terms in term sheets and contracts may not mean exactly the same thing as words mean in ordinary English. It is great to have an experienced lawyer who can tell you how courts have interpreted these things.
Generic Wellbutrin XL pulled from shelves - when is bioequivalent not enough?
Teva's version of the antidepressant Wellbutrin was pulled from shelves this month after patient complaints of both side effects and less benefit. <image005.jpg>
It had met the FDA legal requirements for bioequivalence, meaning 90% confidence that the bioavailability is from 80-125% of the originator's drug, as typically determined in 24-36 volunteers, although the test was on a lower dose than granted equivalence. It seems here, there was a faster release followed by lower blood levels.
It is clear that, despite the legal definition of a generic as "identical", sometimes the generic may not give the patient the same benefit, especially if there is a steep dose response curve (where a slightly lower bioavailability may mean no efficacy) or a narrow therapeutic window between efficacious levels and levels with unacceptable toxicities.
With generics now accounting for 64% of all prescriptions and hundreds of new generic drugs approved each year, we will hear more of this topic.
US Biotech IPO filings up in 2012. US Exits are Improving. China IPO market slows but still big.
There may be more biotech IPOs in 2012 than any year since 2007, with recent IPOs from Kythera Biopharmaceuticals ($KYTH) and Intercept Pharmaceuticals ($ICPT) now trading above their IPO price. I love that local company Kythera is a success.
<image007.jpg> Congratulations to them and to the VCs who have funded a number of the 2012 IPO companies, New Enterprise Advisors, Sofinnova, and Orbimed Advisors. Xconomy story on IPOs
Encouragingly, the microRNAi firm, Regulus, managed to get out the IPO window (albeit at half its estimated price), and Regulus does not yet have products in the clinic.
Correlation Ventures looked at all the exits in a given year and their returns, and report that exits have been getting better over the decade. The top 10% of returns at exit are 4x on investment. Bruce Booth on returns
China's IPO market has slowed but there have been 6 biotech IPOs so far, with 9 waiting, according to BIO (Oct 4th).
Pharmaceutical Compounding spotlighted by meningitis outbreak
The horrible outbreak of spinal meningitis after injections of fungal-contaminated steroid injections has highlighted the increasing role of compounding by pharmacies.
Compounding is the mixing up by pharmacies of an alternative form of a drug to meet special needs. The U.S. now has about 3,000 compounding pharmacies, after having virtually none in 2000, according to the International Academy of Compounding Pharmacists. They account for about 3% of the roughly $300 billion yearly U.S. prescription-drug market.
One thinks of grinding up and dissolving a pill for someone who has difficulty swallowing, but increasingly the compounding pharmacies are supplying injectable solutions and older generic chemotherapies that are the subject of shortages. Compounding pharmacies also supply implanted pumps with specific dosage amounts not available from pharmaceutical companies and anesthesia syringes.
Compounding pharmacies divide up the vials of Avastin, the VEGF antibody produced by Roche for cancer patients, to provide the smaller doses for age-related macular degeneration (AMD). Avastin, approved for treatment of some cancers but used off-label for AMD, costs around $30 to $50 per dose. The VEGF antibody Lucentis approved for AMD, on the other hand, is about $2,000 per injection. Avastin versus Lucentis
The FDA previously issued an alert to physicians after a compounding pharmacy in Florida was found to be the source of ocular Streptococcus infections in patients receiving intravitreal injections of Avastin for age-related macular degeneration. Avastin is not approved for the indication but has the same mechanism as the approved Lucentis. Avastin alert
The New England Compounding Center at the heart of the meningitis outbreak had shipped 17,676 vials of potentially tainted methylprednisolone acetate to 75 clinics in 23 states. The FDA regulated generic form was essentially unavailable, according to the University of Utah, which tracks shortages. WSJ on meningitis outbreak
Compounding is regulated by state authorities, not the FDA. It seems likely that more FDA oversight will come.
DEALs: 3 University collaborations - focused work
<image011.jpg>UCB, in its 3rd Harvard collaboration this year, will fund work on the intestinal microbiome with the hope of finding immune modulating therapeutics.
Sanofi will work with Massachusetts General Hospital to do translational work on cancer compounds, including biomarkers and optimal clinical designs.
Washington University will test Roche and Lilly amyloid drugs in early-onset inherited Alzheimer's. In Vivo Oct 12th.
R&D, earnings, and employment up in publicly traded biotechs
Public biotech companies in the NASDAQ Biotechnology Index increased R&D spending by 5% in 2011 on a 24% increase in revenues. The average public biotech company reported a loss of $32M, an improvement from a loss of $34M in 2010. The number of employees grew by 10%.