Well, 2016 is now very firmly with us, and it's shaping up to be another very interesting year ahead! Personally speaking, this is the beginning of my fourth year at AmorChem, and while it is true to say that occasionally it still feels like yesterday, a lot of water has flowed under my bridge in that time corresponding with a lot of new challenges faced, much new experience gained, and many solid lessons learned - and that's what it's all about!
This is a big, big year for us at AmorChem, having reached the end of the investment cycle of our first fund, and various key projects now having matured from early stage discovery assets into those that are increasingly the focus of business development (BD) activities, garnering enthusiasm from BD personnel working for various potential external partners. This is both an exciting as well as rewarding development in that it underlines that we must be doing something right - right?!
We are poised to do it again this year, bigger and better, having learned a lot about the complexities and challenges in investing in life science discovery projects that remain housed in the laboratories of inventors. This experience is fairly unique to us (province-wide if not Canada-wide), the need for such translational funding isn't going away anytime soon, and this is why we are ideally positioned to expand on our success and therefore are currently fundraising for an AmorChem 2. We weren't totally sure at the outset or early on during the vesting period of our first round whether the submission of new opportunities and deal flow would significantly slow down after 3-4 years, or would be sustained. While it's always easy to be cynical or pessimistic, we were in on the inside, busier each passing year, with confidence that the need for our presence in the local ecosystem was not about to dry up. And guess what - it didn't!
In fact, our thermometer remained on the warmer side consistently, and it is accurate to say that the door has never really stopped knocking. Word of mouth has spread about our fund and what we do, and increasingly, people come to us now in a fashion typified by classical inbound marketing campaigns. This trend has been facilitated by our annual KNOCK OUT™ competition, whereby local hopefuls enter the ring in front of our panel of biopharma heavyweights and duke it out for a chance at a grand prize of a $500,000 AmorChem investment. The quantity and quality of our applicants has steadily improved and last year we found ourselves in the somewhat luxurious (bot not enjoyable!) position of having to turn down projects that were just a little too early - even for us.
The take-home message here is that demand remains high, the need for external funds to get early stage projects across the "valley of death" is deeper than ever (like the valley itself) , and it is apparent that academic granting agencies can only do so much in this regard. This is why we exist, and I don't think it is a stretch to suggest that the need for our continued existence is palpable - given the number of calls we receive from local tech transfer offices asking about our rumoured next round of financing, with a hot new project to put forward for it - it's more than evident that we meet a key, urgent need.
As exciting a time as it is for us, 2016 presents many challenges in the life science and pharma sector, and recent or upcoming elections can be expected to impact those challenges further. Here in Canada, we have Justin Trudeau as a newly elected Prime Minister, representing a shift of government from Conservative to Liberal, while south of the border, we have the raucous (and occasionally trainwreck) presidential campaign trail that will see Obama sail off to early retirement and the lucrative dinner speech circuit by year end.
We all need some light relief now and then, and the Republican nomination soap opera has been both excruciating and fascinating to watch, with the almost inconceivable notion that the Trumpster is poised to nail his party's nomination for President. Many shrieked or laughed in horror at the return of Sarah Palin yesterday, offering her support of Trump for President. This was seen as a critical step for Trump inside the party, and no doubt Sarah would love another shot at being Mrs. VP., even if once again, personal issues (this time the arrest of her son on domestic violence charges on the eve of the day she endorsed Trump, no less) continue to surround her.
This could all be seen as a sideshow to the daily world we all live in, but one mustn't forget pricing practices and pricing wars in the pharmaceutical industry have been top-of-mind in the latter part of 2015, with the issue being escalated both into the hands of Congress, as well as being a hot topic for Democratic hopefuls Hillary Clinton and Bernie Sanders. Given that one of these two likely is the next President of the United States, the scrutiny isn't going away anytime soon. The taunting of both by a certain prominent (for all the wrong reasons) ex-pharma CEO hardly helped the situation.
Lawmakers remain focused on addressing the issues they see, and various corporate names such as Valeant, Turing, Ovation, and Questcor (among others) have all felt some heat from Congress, which is also zooming in on the price-gouging fake pharmacy phenomenon, including the so-called "gray marketers". Valeant's affiliation with Philidor was one such relationship that came under a load of scrutiny. In terms of individuals who made the news for these wrong reasons, well, one cannot possibly forget either Martin Shkreli (Turing) or J. Michael Pearson (Valeant); the latter ending up in hospital with pneumonia and on indefinite medical leave from his post, which sort of says it all regarding his particular 2015.
Just today in fact, I heard of the latest subpoenas to both Valeant and Shkreli, who will be forced to appear next week before the House Committee on Oversight and Government Reform regarding price-hiking shenanigans. For this one, Pearson is off the hook due to his extended medical leave, so it will be up to Howard Schiller to take the heat, and prove he meant what he said about pricing reform at Valeant during the recent JPMorgan Healthcare Conference in San Francisco. Shkreli, for his part, seems to be taking it in his stride or as seriously as ever (you can choose which!) with his usual response to the Twitterverse.
Just today in fact, I heard of the latest subpoenas to both Valeant and Shkreli, who will be forced to appear next week before the House Committee on Oversight and Government Reform regarding price-hiking shenanigans. For this one, Pearson is off the hook due to his extended medical leave, so it will be up to Howard Schiller to take the heat, and prove he meant what he said about pricing reform at Valeant during the recent JPMorgan Healthcare Conference in San Francisco. Shkreli, for his part, seems to be taking it in his stride or as seriously as ever (you can choose which!) with his usual response to the Twitterverse.
House busy whining to healthcare reporters about me appearing for their chit chat next week. Haven't decided yet. Should I? @RepCummings
— Martin Shkreli (@MartinShkreli) January 20, 2016
One currently red hot drug development area is the immuno-oncology space, which saw some record-breaking fundraising in a dealmaking record year in 2015. Perhaps most prominent are companies like Juno, Kite, Cellectis, Bluebird, and making the news more recently was the UK's Immunocore, which scored a European record-breaking financing round of $320M for their T-cell-mediated attack approach on cancer. This type of huge fundraising is reminiscent of North American record-breaking rounds such as Cambridge's (MA) Moderna, which raised a whopping $450M in 2015 for their mRNA therapeutic approach. In fact, since 2011, Moderna has raised an amount just shy of $1B, which is staggering.
Speaking of immunotherapy, AmorChem bought into this overall approach early on, having invested in a personalised cancer immunotherapy program that uses minor histocompatibility antigens (MiHAs) as T-cell targets in cancer. This exciting program is about to enter Phase I clinical trials here in Canada, and we are already fielding multiple inquiries from potential partners who see the huge potential in the approach, and we are optimistic that the future for MiHA-directed immunotherapy is looking very bright indeed. Watch this space!
Although the general trend in 2015 was that big money went to many fewer players than in previous years, the upshot was that those fewer players raked in a record-breaking amount of investment. According to Evaluate Pharma, almost $9B poured into some 366 companies (US, Europe, Asia) in 2015, which is about $2B more than was seen in even 2014 by most estimates, so although the number of residents inside the bubble may have been reduced, the bubble itself not only didn't shrink (and definitely didn't burst) but actually expanded.
Things look optimistic in spite of various challenges the pharma industry faces; such issues will probably sort themselves out in the coming year or so, once corporations find out who the next President is, and how ahead of the game they want to be in order to avoid greater scrutiny. Having said that, an industry with a global revenue stream in the hundreds of billions of dollars (and predicted to be in the trillions before very long!) is a juggernaut that barrels forward with considerable force, and even lawmakers can only hope to do so much to slow it down. Time will tell on the outcome of big pharma pricing wars and the increasing accusations of price gouging from the public, payers and governments alike. Until then, let's stay optimistic and look forward to an amazing 2016 ahead!
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