Building biotech solutions for diseases of the developing world

Global Health CouncilJune 1, 2006Washington, DC

Wendy TaylorFounder and Vice President

Strategy and Operations

BVGH’s Fundamental Premise

The innovative drive and expertise of the biotech industry are integral to the mission of saving lives and treating diseases that afflict the world's poorest people.

Key Barriers to Biotech Participation

• Market– Disbelief that there’s a market for global health– Concern about opportunity costs and focus

• Funding– Skeptical of investor support for global health– Unable to access sufficient R+D funding

• Information– Unfamiliar with neglected diseases– Unsure of developing world markets

BVGH Mission

BVGH is breaking down barriers that hinder development of new vaccines, drugs and diagnostics to treat the urgent medical needs of the developing world.

BVGH Role: Bridging Biotech & Global Health

• Identify targets for biotech impact

• Create opportunities and incentives

• Build strategies

• Catalyze private sector R&D through new partnerships and funding

Reasons to Be Optimistic

1. Revolution in scientific tools available

2. Biotech industry is mature enough to tackle problems of this scale

3. Funding increasingly there to develop new solutions

4. Untapped markets that appeal to innovators

1. Scientific Opportunity

• Biotech advances applied successfully to many diseases of developed world

• NO Reason these advances can’t be used to make strides against neglected diseases

Rheumatoid arthritis

Non-Hodgkin's lymphoma

Multiple sclerosis

Breast cancer

Cardiovascular disease

Respiratory syncitial virus

Gaucher’s Disease

Targets for Biotech Impact

• Malaria drugs– P. falciparum genome sequenced– Multiple targets for HTS / RDD

• Diarrheal disease vaccines– Several candidates in clinical trials– Key test of dual-use rationale

• TB drugs– Apply novel anti-infectives vs. TB– Key targets ID’ed for rapid therapy

• Trypanosomatid Drugs– All 3 genomes sequenced in 2005– Increasing consensus on targets

• Diagnostics– Critical need for improved POC IVD

2. Technological Opportunity

• Industry’s capable biotech companies DRIVE innovation

– Biotechs developing new technologies + novel compounds• VCs pouring in $4B/YR • Big pharma signs dozens

partnering deals + buys best companies

25%

38%

52%

2000 2001 2002

Proportion of Newly Approved Drugs with Biotech Origins

• Huge advantage is industry’s diversity

– 15 Big pharma + 4000 biotechs

– Need lots of different ideas/approaches/competition to sort winners/losers

3. Funding Opportunity

• Funding opportunities have improved dramatically

• > $35 billion committed over last 7 years– Gates Foundation: $6 billion– Global Fund: $4.8 billion– PEPFAR: $15 billion– GAVI: $3 billion

4. Market Opportunity

• Potential untapped markets

– The 85% of the world NOT served by leading pharma/biotech

– Emerging market economies can and do pay

Rest of the world SE Asia +

China

Latin America

Japan

EU

North America

Total >$400 billion75% in 12 countries

Global pharmaceutical sales focus on the fastest-growing segments

BVGH: Bridging biotech & global health

• Create incentives and opportunities– Build business cases for major product classes

• TB and ETEC vaccines– Spearhead global Advance Market Commitments (AMCs)

• Build strategies– Focus leading-edge discovery engines on key GH problems– Help companies build business strategy

• Catalyze private sector R&D– Assemble sustainable partnerships around the most

compelling projects– Help secure financing

Findings and Initial Actions from TB Vaccine Business Case

Approach

• Identify markets that could potentially generate a return

• Quantify financial and social returns

• Define how public sector can enhance market and remove barriers

Findings

• Market size sufficient to attract innovators ($450M - <$1B/year at peak)

• Potential impact justifies substantial public sector investment (millions saved)

• Clinical trial risk high: >7 years with thousands of patients

• Biggest impact on timelines/costs would be improved biomarkers

Actions

• Promote findings with vaccine companies

• Promote development of novel biomarkers• Enhance developing world market to ensure access

$146

$253$314 $331

$393 $427$466

$546

$336 $348 $352 $356 $358 $359 $360 $361 $361

-600

-400

-200

0

200

400

600

800

1000

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Profits by year and market for BCG boost (2013 – 2030)

Launch

($970)

Source: BVGH/BCG analysis NOTE: Estimates for potential analysis only; information not provided by industry.

Low income

Mid income

High income

Private mkt

R&D

COGS

Maintenance

Facility

Annual profit

China

India

Represents all costs ($638MM) incurred for R&D, adjusted for timing of investments(2)

Upfront facility costs ($250MM) ((infrastructure), adjusted for timing of investment(1)

-970

Competitive event

Public mkt demand

Private mkt demand

($MM)

Booster Vaccine: Cash Flow by Market

0.0

0.5

1.0

1.5

2.0

2.5

2013 2015 2017 2019 2021 2023 2025 2027 2029

BCG boost

Deaths (millions per year)

Source: BVGH TB Vaccine Business Case

-7%

-19%

-28%

-12%

-32%

-48%

-17%

-40%

-62%

2.2

2.0

1.8

1.5

2.1

1.8

1.4

1.1

2.0

1.7

1.2

0.8

Baseline

BCG Replacement

Prime-boost

Potential Impact of TB Vaccine

Over a million lives could be saved each year by novel TB vaccines at low cost/DALY

Cost per DALY averted in Africa - BCG Replace ($6-10) - BCG Boost ($21-26) - Prime + Boost ($21-23)

Cost per DALY averted in Africa - BCG Replace ($6-10) - BCG Boost ($21-26) - Prime + Boost ($21-23)

Building Markets: Advance Market Commitments (AMCs)

• Major shift in donor mindset

– Understand need for market-based solutions

• How they work:

– Donors make legally-binding commitment to create viable markets for key vaccines

– Guarantee minimum price for certain volume of successful vaccines

– Technical specs for the product must be met

– Industry commits to lower long-term price

AMCs – BVGH’s Role

• Ensure AMCs cost-efficient for donors and attract industry’s capable innovators

• Consulted extensively with biotech industry– Over 50 companies and 150 senior executives

• Issued two AMC reports

– Supported concept and outlined key issues to be addressed

• Industry response– OVERALL: Promising mechanism that should move forward– Not magic bullet – push funding still needed– Must be competitive with other opportunities– Concern about demand risk

BIO Ventures for Global Health

Building biotech solutionsfor diseases of the developing world

www.bvgh.org

TB Vaccine Business Case

• Approach– Identify markets that could potentially generate a return – Quantify financial and social returns – Define how public sector can enhance market and remove barriers

• Findings– Strong financial and social case for investment

• Est. annual global market: >$450M for BCG replacement; >$750M for boost• Positive NPV, driven by developed world and emerging markets

– Potential impact justifies substantial investment• SROI: millions of deaths avoided; cost $19-63/DALY averted

– Clinical trial risk high: >5 years with thousands of patients

• Follow-Through– Study embraced by industry – first clear definition of market’s value– Companies newly attracted to work on biomarkers and vaccines– “Road show” will promote findings; value of “deep dive” approach

BVGH Expertise

• Deeply networked with leading players in industry

• Broad convening power: Bringing together the best science and the most skillful product developers

• Experience building successful product development organizations and partnerships

• Trusted partner: Ability to advocate for global health without promoting particular products or strategies

Burden

Needs Gap

Status of Science

Relevance toBiotech

Availability ofFunding

High level assessment criteria

Global burden of disease in DALYs and deaths

Adequacy of current solutions proxied by mortality CAGR. Qualitative scan of gaps in current drugs, vaccines, & diagnostics

Quantitative scan of publication activity, state of pipeline, and NIH funding; review of key publications, partic. rel. to targets

Match needs w/ key biotech assets – Rx, Dx, Vx discovery; preclinical and clinical product development capabilities

First pass review of a) hybrid and dual/use markets; b) other pull and push funding

Landscape Analysis