Archive for November 2013

Biotech IPOs Are on the Rise

November 25, 2013



With over 20 years of experience investing in biotechnology, Lindsay Rosenwald, MD, has founded dozens of companies and managed a number of billion-dollar biotech funds. As the co-founder of the asset management firm Opus Point Partners, Lindsay Rosenwald closely monitors developments in the life sciences, pharmaceuticals, and related industries.




For the first time in over a decade, biotech initial public offerings (IPOs) are making a strong showing in 2013. So far this year, about 30 promising biotech companies have gone public, including Chimerix, Enanta Pharmaceuticals, and Tetraphase.

What has stimulated this recent burst of IPO activity among biotechs? Some business leaders cite the 2012 Jumpstart Our Business Startups (JOBS) Act, which has allowed some small businesses to reduce auditing costs and therefore devote more resources to research. The JOBS Act also allows companies a measure of confidentiality, helping them to gauge investor interest with more certitude.

In addition to the legislative environment, recent positive shifts in the biotech market among established firms may be signaling a rise in investor confidence in biotechnology companies. A natural outgrowth of this is an increase in capital available for IPOs.

If these positive trends continue, the biotech sector could return to the investors’ spotlight. More importantly, a rise in the number of successful IPOs could encourage more scientists to open companies and share their medical insights with the world.

The Ongoing Legislative Debate over Generic Biologic Drugs

November 18, 2013

Biologic DrugsDr. Lindsay Rosenwald of Opus Point Partners co-manages one of the premier biotechnology investment funds available today. As an entrepreneur with a background in medicine and nearly three decades of experience in financing and incubating biotechnology firms, Dr. Lindsay Rosenwald has established himself as one of Wall Street’s preeminent biotechnology investors.

During the summer of 2013, various state-level legislative battles took place as pharmaceutical companies encouraged policymakers to enact physician notification requirements regarding generic biologic drugs. These companies, led by Amgen and Genentech, have faced resistance from pharmacists and the Generic Pharmaceutical Association, which represents manufacturers of generic drugs.

Biologic drugs are especially complex molecules which require exacting manufacturing processes to produce. Hence, generic versions tend to be “biosimilar” rather than identical to brand-name drugs: they behave the same medically without necessarily being perfectly chemically identical.

Because biologics currently make up around a quarter of the $320 billion market for medications in the U.S., the ways in which their generic versions are approved, tested, and regulated are worth tens of billions of dollars to the different actors in the pharmaceuticals industry. So far, in all but one of the fourteen states where the measures have come up for debate, the generic manufacturers have prevailed.

In the coming decade, patents on several high-profile biologics will expire and the FDA will be faced with approving generic versions. Legislation like doctor notification rules will impact many aspects of the generic drug industry.

Breakthrough Opens Up New Avenues for Antibiotic Research and Development

November 8, 2013

In an article published in PLOS Genetics on October 31, 2013, Oregon State University researchers disclosed details of a discovery they made during studies of the DNA sequencing of the common cereal fungi fusarium graminearum. Conducted with support from the American Cancer Society and the National Institutes of Health, the research revealed that one gene in the pathogen acts as a switch or “master regulator” that silences more than 2,000 other genes. By deleting the gene, researchers have gained access to numerous gene expressions that could produce previously unknown compounds with applications in biofuel manufacturing, agriculture, and numerous other industries.

Because fungi have antibacterial properties, the discovery is of particular note to medical professionals, who have long been struggling with the advent of antibiotic-resistant bacteria. Concurrent with the increasing concern over antibiotic resistance is an alarming dearth of new drugs to combat the problem. To encourage the research and development of new antibiotics, the United States government passed the GAIN (Generating Antibiotics Incentives Now) Act in 2011, which extends the exclusivity period of new drugs that meet the qualifications for an infectious disease product set by the Secretary of Health and Human Services (HHS). Despite this, the development of new antibiotic compounds has continued to stagnate, with just two new antibiotics gaining FDA approval in the last five years. Because the return on investment for the development of new antibiotic drugs is so small, large pharmaceutical firms in particular are shying away from antibiotics research.

Fortunately, several biotech companies, such as GlaxoSmithKline, Cempra, and Evotec AG, have positioned themselves to meet the need created by antibiotic resistant bacteria by forming partnerships to accelerate drug development. With the announcement of the breakthrough by Oregon State University researchers, possible new research avenues might entice more companies to establish similar partnerships or create programs of their own.

Amgen Purchases Rights to Filgrastim and Pegfilgrastim

November 7, 2013

Leading biologics manufacturer Amgen, Inc., recently announced its acquisition of the rights to sell and distribute the drugs filgrastim and pegfilgrastim in close to 100 markets. Previously owned by F. Hoffmann-La Roche (Roche) under license from Kirin-Amgen, Inc., a partnership between Amgen and Japanese company Kirin Holdings Co. Limited, the franchise rights to the African, American, Asian, Eastern European, Latin American, and Middle Eastern markets earned $200 million in sales for Roche in 2012 alone. Sold under the names Neupogen and Neulasta in the United States and Europe, filgrastim and pegfilgrastim boost white blood cell counts of patients undergoing chemotherapy, thus helping them resist infections.

The deal will begin to take effect January 1, 2014, in a gradual transition designed to ensure that doctors and patients continue to have access to these potentially life-saving drugs. Consequently, Roche will distribute the drugs in countries where Amgen does not have a market presence until Amgen is able to establish a distribution pipeline. The resulting growth in previously untapped markets will enable Amgen to create reliable distribution networks in these areas and reach more patients worldwide.

Indicative of Amgen’s faith in its ability to drive sales effectively in the formerly Roche-controlled areas, the acquisition closely precedes the expiration of Amgen’s patent on filgrastim, which will be facing new competition from tbo-filgrastim, an unofficial filgrastim biosimilar manufactured by Teva Pharmaceutical Industries, Ltd. Although biotech insiders predict that Amgen may lose up to 40 percent of franchise sales from both filgrastim and pegfilgrastim by 2018, the biotech giant continues to show sales growth, as reported in its third-quarter results for 2013. Amgen experienced total revenue growth of 10 percent over the third quarter as well as an 11 percent increase in product sales, which were generated in part by revenue from its brand-name pegfilgrastim (Neulasta) and filgrastim (Neupogen) drugs.