Tag Archives: business development

A blockbuster on $1 a day pricing?

 

 

Yesterday, North Carolina-based Pozen gave a detailed Investor Update, focused

English: Dollar General variety shop at 800 Br...

Tomorrow’s Pharmacy?

on PA32540, a “Coordinated-Delivery Tablet Containing Enteric-Coated Aspirin and Immediate-RElease Omeprazole.”

Information on the company’s pipeline is available here, while the investor presentation (lengthy PDF) is here.

At Lacerta Bio, we follow the drug delivery/reformulation space quite closely. We happen to have a lot of experience in this space. Plus, we believe that there can be a lot of therapeutic value gained from these approaches, especially if this therapeutic value can be achieved using an efficient development plan and reasonable drug pricing.

So with PA32540, it appears that Pozen has really latched onto this second point (reasonable drug pricing). But first, a little background…

There is no question that aspirin is a valuable agent to prevent cardiovascular and cerebrovascular events. However, as Pozen points out, nearly 70% of patients who should be on aspirin therapy are actually taking it. So even though aspirin is very cheap, the side effects make long-term aspirin therapy prohibitive for many patients.

In fact, Pozen’s clinical data support this. They demonstrated that nearly 12% of their subjects on enteric coated aspirin experiences gastric and/or duodenal ulcers. Further, over 11% of subjects discontinued enteric-coated aspirin due to any adverse event.

Now that’s not to say aht PA32540 is perfectly safe either. For example, Pozen’s own data demonstrate a 17.5% incidence of gastritis, versus 16% for enteric coated aspirin.

Nevertheless, the safety data, coupled with the well-established efficacy data supporting aspirin in this population, make PA32540 a compelling product.

But what about cost?

As one would suspect, Payers responded with little enthusiasm when initially presented with the PA32540 profile.

What changed their minds?

$1

Pozen correctly noted that pricing is the key component to having a successful reformulation product.

Pozen Payer Market Research Findings

Pozen Payer Market Research Findings

Specifically, at $1 a day, this makes PA32540 cost neutral to the Payers. Even better, the product will likely be on Tier 2 on the formularies, instead of Tier III.

Brilliant.

In fact, since Tier II copays are around $30 a month anyway, a contracting approach will likely not be required.

Now stop and think about this for a second. Let’s suppose you currently sell a branded product in a category where there are generic alternatives (statins, for example). With a generic available, the brand would have to have compelling clinical evidence of superiority to have Tier II pricing, and even that will be a challenge.

The way many companies handle this is through bundling a basket of products, offering different prices on the products in a basket in order to make that branded Tier III product more compelling for the Payers.

So while a Pfizer or an AstraZeneca can do this, a small company without a substantial portfolio of products cannot.

This is critically important from a business development perspective (and hence another reason why we’re so interested). Time and time again we see plans and business models which do not have substantive payer research supporting the model. There is a real danger that products can be approved, yet fail miserably in the marketplace, partly due to unreasonable pricing and revenue expectations.

The “Affordable Medicine” concept Pozen is supporting can really resonate with a number of Payers. Importantly, if a developer can execute on a plan while maintaining an Affordable Medicine mindset, and not the Wall Street/Investor-driven blockbuster mindset, then we may see more approved products on the market, with broader usage for each product.

Further, by moving aspirin from OTC to Rx, we will now have a much better tracking system for aspirin prescribing, usage, adverse events, etc. Again, this is another way the entire system benefits from their approach.

We can’t say whether or not Pozen (or their commercial partner) will hit their Revenue targets. We dont’ even know if Pozen will successfully out-license this asset to strong commercial partners. However, given some of the plans we’ve seen recently, we have to commend Pozen for their pricing and commercial strategy.

Radio Silence: Three Reasons Why It Happens in BD

 

Consider the following situation:

English: "Wilshire Room," company in...

Where is everybody over there?

  • You are out-licensing an innovative asset in a niche therapeutic area
  • It is a first-in-class molecule
  • It has successfully demonstrated efficacy in two international Phase II clinical trials
  • You complete 20 meetings with prospective national, regional, and international partners at a major business development networking conference
  • You return home and start the follow up process…

…and you are met by a complete lack of response from your best leads.

Sound familiar?

After all, you have a desirable asset, and the initial meetings were enthusiastic, with promises of follow-up calls, exchange of confidentiality agreements, etc., etc.

Why are you being met with silence? With a lack of responsiveness?

Where was the enthusiasm that you felt during that 30 minute meeting in the grey numbered cubicle?

In our experience, there are three general reasons why your desirable asset is met with enthusiasm, then silence. In this post, we discuss these three reasons, but there may be others! Please feel free to offer alternatives.

Wrong Audience - This is one reason why so many company executives argue against the use of networking conferences. Namely, that the person you met is simply the wrong person for that meeting.

Now what do we mean by wrong person? It could be that the person on the other side of the table:

  • Lacks the authority to follow up
  • Presented the opportunity to an internal decision maker, who in turn is too busy or disinterested to provide feedback
  • Completely misunderstood the opportunity
  • Is too embarrassed or “busy” to respond (and hence, hoping you will go away)

Moved On - We recently ran into a situation where our key contact on the other side of the table suddenly became unavailable for an extended period of time due to a death in his immediate family. In another case, a key contact went on an extended maternity leave without notifying us. When situations like this happen, it can be weeks to months before a company responds, especially if the person who has moved on has not communicated the situation internally.

Wrong Asset - It’s entirely possible that the asset presented was simply not a fit, but the meeting was held for any number of reasons, such as:

  • The counterpart is looking to boost the number of meetings conducted, thereby justifying their presence at the conference
  • There was an internal change or shift in the company’s licensing strategy which was not communicated in time to the parties at the convention (Yes, this does happen!)
  • Complete misunderstanding between the summary information posted on the partnering web site and the slides presented during the meeting

So what can you do to reduce the amount of BD&L radio silence? Here are a few tips:

1. Pay very close attention to the exact person(s) you are meeting. Where possible, try to schedule a meeting directly with an individual, not a company.

2. Be choosy when deciding which companies you want to meet. Blanket conference coverage will likely result in a lower percentage of quality leads.

3. Keep your presentation very short, and leave a lot of time to ask questions about their internal process. For example, will the person you are speaking with lead the process internally? If not, who is that internal champion? What are the key criteria or questions that can be addressed immediately?

4. In select cases, if the meeting goes very well, you can schedule a follow-up meeting right on the spot. Suggest picking a date 2 weeks after the conference for a follow up. After all, isn’t that what smartphones are for?

5. Send a LinkedIn invitation soon after that initial meeting.

6. Mail a hand-written thank you note, along with a hard (bound) copy of the slides. Trust us. You will likely be the only person mailing a paper copy! For a greater impact, use overnight delivery.

These are but a few techniques we have used to overcome the “radio silence” problem sometimes seen in business development.

What techniques have you used in the past? What has worked for you?

 

Need international out-licensing help?

At Lacerta Bio, we’re in the middle of several international out-licensing projects. This process is enabling us to re-connect with many companies around the world. In addition, we’re making new contacts in other companies, especially in Central/South America, Korea, China, and Japan.

The benefits for you are:

  • A current contact list
  • An efficient process
  • A business model synchronized with your success

If you have a late-stage asset and are looking for help out-licensing your asset, let us know…we can help.

Need for new drug delivery technologies is greater than ever

So said Shams Ruston from Labopharm at last week’s Interphex conference in New York.

We happen to agree.

In fact, there are two ways to look at this.

From the branded side, drug delivery can help extend the patent life of existing assets…a far less risky and less costly approach than trying to in-license the next blockbuster. A reformulation approach buys the innovator time to reap the fruits of earlier investments, or make the necessary ones in the near term to sustain growth. The underlying challenge may be an organizational one, as companies fixated on acquiring safe, effecting Phase II+ assets for a pittance continue to struggle to execute in-licensing deals. Broadening the in-licensing mandate (or the in-licensing mindset) would help companies tremendously.

From the other side, generic companies are competing on price, service, and distribution, and not the actual asset. Drug delivery & reformulation approaches enable generic companies to develop a branded product line. However, we recognize that reformulations require a clinical benefit in order to garner acceptable reimbursement levels.

As we’ve talked about before, drug delivery is far from dead. If anything, the current patent cliff can result in innovative ideas for companies willing to look for them.