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Business Development

November 13, 2018
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Is the world prepared to fight against superbugs?

By | Business Development, Valuation | No Comments

While news headlines are saturated with political unrest, wars to unravel, and terrorism, the world doesn’t suspect that a microscopic enemy could cause as much damage as thousands of deaths every year. This microscopic enemy is a multidrug resistant bacteria or as many of us call them, superbugs. Recognizing this continuously growing antibiotic resistance as an increasing threat to modern healthcare, WHO has proclaimed this week (November 12-18th) to be the World Antibiotic Awareness Week.

Almost a century ago, Alexander Fleming discovered penicillin, which was later introduced as a treatment for infections. The development of mass-produced antibiotics soon flourished over the next decades until it hit plateau in the 1950s and the latest new class of antibiotics to reach clinical stage was discovered in late 1980s.1 Although the innovation/development of antibiotics dramatically slowed down, the use of antibiotics did not; and people were using antibiotics for many applications, including the treatment of bacterial infections or to make livestock grow faster in crowded and unsanitary environments. As a result, the over- or misuse of antibiotics lead to the faster development of resistant bacteria, which at first, was easily treated by changing to another type of antibiotic. However, this became a major problem when some bacteria started to become resistant against many different types of antibiotics.

The fact that the problem of superbugs is increasing is an alarming situation as infectious diseases can be easily spread, and the lack of efficient treatment options leaves us out of ammunition to stop superbugs from spreading and harming innocent lives.

The field of antibiotic development against superbugs is messy – on one side, we have a huge unmet need for more effective treatments and on the other side, we have industry actors who are not motivated to innovate. 

Why is discovery of new classes of antibiotics so low?

The simple answer is that discovery of novel antibiotics is difficult, there is a lack of incentives for drug development companies, and the business case is trivial. To start, some antibiotics have been traditionally discovered by screening natural compounds (e.g. found in different soils) and in few cases by testing synthesized compounds against bacterial cultures. This is a time consuming and costly trial and error process. Thus, the biopharmaceutical industry opts for creating analogues of existing antibiotics as this pathway is not as costly and risky (e.g. lower toxicity profile).

The development of novel antibiotics has several CONS that turns drug development companies towards the opposite direction. As seen on table 1, it can be determined that the outcome of developing novel antibiotics does not make up for the high risks, costs and long time that it takes to develop novel drugs. As you can see, antibiotics with a novel class or mechanism of action, risk being placed in reserve and consequently, risk having lower market penetration and lower exclusivity time in the market (e.g. due to fixed patent lifetime). This is a problem that Big Pharma, federal governments as well as regulatory agencies have recognized. While several Big Pharma companies have decided to leave this space, the government and regulatory agencies have stayed to create initiatives to work on the alarming problem of superbugs.

Table 1. Pros and cons for biopharma to develop antibiotics for multidrug-resistant bacteria

Pros Cons
  • GAIN act passed in 2012 in the US
  • Increased amount of available soft grants
  • Low competition (for drugs with novel class/mechanism of action)
  • Potential to expand to the agricultural industry
  • Price range of antibiotics and average time of use is low
  • Low market penetration influenced by the industry shift of decreasing use of antibiotics to decrease the problem of superbugs
  • Novel approved drugs are placed on reserve and there is risk of patent expiry or shorter market exclusivity when these are marketed
  • Many Big Pharma companies are leaving this space (less collaboration of industry partners)
  • High risk of bacteria eventually developing resistance against the developed drug
  • Drug development is expensive and time consuming
  • Novel drugs have high risk of toxicity
  • Challenges to find patients for clinical trials (e.g. lack of rapid diagnostic tests)

What are regulators doing to incentivize the development of antibiotics?

Under the GAIN act, the FDA began granting Qualified Infectious Disease Products (QIDP) designations in an attempt to incentivize the development of antibiotics. Some of the incentives under this act include the following:2

  • Additional 5 years of exclusivity
  • Fast -Track designation
  • Priority review status
  • Federal funding/grants

According to the FDA, 5 years since the GAIN act was passed, approximately 147 drugs were granted QIDP designation. Of these drugs, 74 were considered novel and 12 were approved.3 However, deeper analysis indicates that many of the drugs with QIDP designation involve improvements of existing drugs with new dosages and new indications. Only a few products addressed the unmet need of new classes of antibiotics or drugs with new mechanisms of action.4

Further analysis of the antibiotic development pipeline was performed using Medtrack where the results are illustrated in Figure 1 and 2. Overall, there is a large increase of candidates entering the antibiotic space. As seen in Figure 1, 60% of the candidates are in preclinical stage, thus indicating that many new candidates are being developed. Deeper analysis indicated that 47% (161/330) of the developed antibiotics are classified as novel, however, only 3.8% (13/330) of the antibiotics were from a new class of antibiotics or had a new mechanism of action.

Most of the candidates from a new class or with new mechanism of action were in preclinical stage (Figure 2), except for Lytixar™ (Ltx90) and SGX942, that were in clinical development stage. Lytixar™, developed by Lytix Biopharma is in phase 2a for staphylococcal infections, however, no recent development since this trial has been reported. Following is SGX942 developed by Soligenix, which is in preclinical/phase 1 for bacterial infections and in phase 3 for the treatment of mucositis in head and neck cancer patients receiving chemotherapy.

Based on this analysis, it can be determined that the development of antibiotics has indeed increased by volume, however current regulatory incentives do not seem to be enough to encourage the development of new classes of antibiotics or those with new mechanisms of action. To make matters worse, most of these candidates are mainly in preclinical phase – where the rate of success is very low and the time to market is long.

Figure 1. Candidates in the antibiotic development pipeline

Figure 2. Antibiotics that belong to a new class of drug or have a new mechanism of action

Concluding thoughts

The field of antibiotic development against superbugs is messy – on one side, we have a huge unmet need for more effective treatments and on the other side, we have industry actors who are not motivated to innovate. Despite the efforts in introducing the GAIN act, the results have been in the middle-of-the-road and companies have mainly focused in developing better analogues of existing classes of antibiotics. Little is seen on the development of antibiotics from new classes or mechanisms of action – which are essential to fight superbugs. This could be a sign that soft funds should be highly allocated to the discovery and translation of new classes of antibiotics or mechanisms of action to fight superbugs. Also, regulatory incentives should be fitted more to incentivize antibiotics from new classes of antibiotics or with new mechanisms of action. Although, the GAIN act has only been active for more than 5 years, more time is required to see the real impact of this legislation in the development of antibiotics. However, this doesn’t mean that this act cannot be amended to accommodate what is really needed, which is the development of antibiotics from new classes or new mechanisms of action. A historically-relevant example is the Orphan Drug Act passed in 1983. This act incentivized drug development companies to focus on rare diseases that were once neglected by the market. The passing of this act was successful as the development of orphan drugs has increased dramatically and similar regulations have been incorporated in other countries. Just to illustrate its success, more than 27% (60/220) of the approved drugs in 2017 had orphan drug designation. Thus, similar to the Orphan Drug Act, we hope that the GAIN act can incentivize drug development companies to innovate in ways to fight against superbugs.

By: Paola Jo, Senior Business Analyst

References

  1. ReAct (n.d.) Few antibiotics under development [Available online] https://www.reactgroup.org/toolbox/understand/how-did-we-end-up-here/few-antibiotics-under-development/ (Accessed July 27, 2018)
  2. Jungman, E. (2018) FDA Releases Draft Guidance on Antibiotic Policies under the GAIN Act. PEW [Available online] http://www.pewtrusts.org/en/research-and-analysis/articles/2018/04/20/fda-releases-draft-guidance-on-antibiotic-policies-under-the-gain-act (Accessed: July 25, 2018)
  3. Department of Health and Human Services (n.d.) GENERATING ANTIBIOTIC INCENTIVES NOW Required by Section 805 of the Food and Drug Administration Safety and Innovation Act Public Law 112-144. [Available online] https://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDER/UCM595188.pdf (Accessed July 25, 2018)
  4. Simpkin, V., Renwick, M., Kelly, R., Mossialos, E. (2017) Incentivising innovation in antibiotic drug discovery and development: progress, challenges and next steps. The Journal of Antibiotics 70: 1087 – 1096
September 25, 2018
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10 tips to create an impactful investor presentation that will make a difference

By | Business Development, Communication | No Comments

An investor presentation is, arguably, one of the most important material for a Life Science company. With a longer time to market compared to companies in other industries, in order to survive, most Life Science companies rely on the financial support of investors to fuel their development programs. In order to woo the next potential investors, many members of the management team have to make a great effort to constantly meet potential investors to get them onboard and invest in their company.

With plentiful of presentations under our belt, we thought to share some of our best tips and advice on how to make a pitch work for potential Life Science investors.

Here are our 10 top tips.

1. Define your goals and needs. One of the main things that you should define before creating a presentation is what you would like to accomplish with your presentation e.g. raise x amount of money to advance the lead program to phase 2b. This might be done by analyzing your internal resources and determining what the company needs to reach the next big milestone.
2. Must-have slides to attract your next collaborator or investor. As time is a limiting resource and you would like to provide the information that matters the most to your potential investor, we have compiled a catalogue of content slides that should be included in your slide deck.

  • Executive summary. Here you describe the company, lead development program and/or main assets, and the company’s goal. This slide(s) is recommended to be created as one of the last steps of your whole presentation.
  • This slide could include general information of the company such as location, founders, if it’s a project, private or publicly-listed company, latest development stage and focused indications, mission and a highlight or two about the company’s progress (e.g. recent patent approval in the US or positive results in a preclinical disease model showing the desired effects).
  • Technological innovation and how it closes gaps of current unmet medical/clinical needs. You can start by providing a brief background of the pursued indication and listing the main unmet medical needs e.g. current treatments are expensive, have serious side effects, are invasive, etc. You can then present what your technical innovation is and mention its technical strengths and commercial potential. Note: in order to avoid massive amounts of text, make sure to simplify some of the information in the form of figures, tables bullet points, etc.
  • Data provides credibility. Key results from studies to support the efficacy or safety of your innovation is very important as it provides crucial information to investors about the value of your innovation. Make sure to provide some data (in table, graph, etc.) and summarize in bullet points or a sentence what the main conclusion is.
  • Market size, potential and opportunity. Remember that many investors constantly have “return of investment” in the back of their minds, therefore you can provide a sense of the potential of the company’s assets by providing numerical estimations. These slides should contain information about the market potential of the target patient population as well as estimations of the market opportunity in specific geographical areas. To provide relevance to the presented numbers a benchmark to market sales of comparable products as well as a benchmark to the whole market size and growth can be presented. Also, from our experience, presenting comparable financial deals that other peers have accomplished in the same space is very interesting.
  • Slide about competition. An overview of the competitive landscape or a benchmark of your innovation(s) to current competitors could provide valuable information to your potential investor about the current positioning of your innovation. Information about the competition can provide the potential investor a sense of your business strategy e.g. whether you are pursuing a crowded market with a unique product or you are a pioneer in an untapped market.
  • Intellectual property (IP), regulatory environment and development timelines. Intellectual property is very important as it guarantees that you are doing something unique and you can fence off competition through a limited period of time. You can also provide information about the regulatory environment as depending on the nature of your innovation, exclusivity granted by regulatory agencies can fence off competition for longer periods of time compared to your existing IP portfolio. Finally, an investor must know what you are planning to do with money to be raised and this can be done by providing a development timeline or plan.
  • Company’s aim/goal and budget. Remember the first tip that I gave you? Well, now that you have presented how great your company and innovation is as well as the potential opportunities, you can tell the potential investor what your aim is to get out of the meeting with them (e.g. need investment of x amount of money to complete a phase 1b study to resume discussions with a Big Pharma potential collaborator). You should also present a budget/use of proceeds from the investment. Note: If you have a good understanding about the development plan and key activities that needs to be performed, you should be able to translate this information to budgetary means. If you need help, make sure to reach out to necessary service providers or benchmark costs.
  • Slide about team. In this slide you can present the management team as well as the Members of the Board and/or Scientific Advisory. You can also write a very short summary of their relevant experience or verbally describe it during the presentation.
  • Other slides. Depending on the time that you have available and the aim of the meeting, you can add additional slides to this core slide deck.
3. Work on a graphical profile. Many times, the colors, logo and design of a company presentation can build an image of a company in the target audience’s head. Whether it is to show professionalism or a distinguished identity of your company, these factors could work in favor of your company’s brand. The brand along with the uniqueness of your innovation could form an impression that would make it easier for your potential investor to remember you next time you contact them or when they read news about your company.
4. Be precise and concise. When you are nearly done with your presentation, make sure to run the ‘Spelling and Grammar’ function in PowerPoint, Keynote or whichever program you are using. Also, make sure that you use the same spelling of words, acronyms and standards throughout the document. A common example is that in Europe, commas (,) are used to separate decimals from integer numbers and dots (.) are used to separate thousands. However, this is the complete opposite in other countries (e.g. US) and many people make the common mistake of editing their slides to fit American investors but forget to change this in all of their numbers.
5. Highlight very important information. You can highlight the most important information or keywords in bold. You can also add action titles to each slide if that is the main message that you want to convey to your target audience.
6. Time is gold. This might be your only chance to impress a potential investor, so make sure to be prepared and plan out the time for your presentation. Practice or present it to your colleague(s), especially if you are pitching in front of a larger audience as running out of time could look unprofessional.
7. A figure, graph or table is worth a thousand words. In your presentation, placing information in a figure, graph or table can provide more legible information to the reader instead of a bulk of text. Make sure to add some bullet points of the main conclusions that you would like your reader to get out of that figure, graph or table as sometimes, the potential investor would be interested in getting a copy of your presentation. This would allow the reader to understand the presented information when you are not around.
8. Common understanding and trust. We understand that the potential and value of your innovation is huge, but it is worth remembering that some investors are familiar with the industry and they might know what a reasonable ballpark number is for the market size estimation and potential peak sales. Try to be reasonable with the numbers that you present as this could provide the vibes that you could be a reliable partner.
9. Flexible presentation. The presentation will look different depending on the stakeholder or event where you are presenting. From our experience, an efficient way to create presentations for different situations is to first create a large and extensive presentation and use this version to pick and choose slides to create additional simple presentations such as a non-confidential version of the presentation or a keynote-style type of presentation.
10. Appendix. Depending on the nature of the meeting, keep technical data in the appendix. However, if this data is confidential, make sure to get the proper confidential agreement in place before you present such data.

Hope these tips are helpful in creating or improving your own investor presentation. At MSC, we have a lot of experience in creating investor presentations for different life science companies. Our expertise varies from creating a clean and slick graphical profile to business-related content that truly portrays the potential value that the company’s innovation bear. If you want to talk more, feel free to contact us at msc@monocl.com.

By: Paola Jo, Senior Business Analyst