Anatomy of a Strategic Alliance Between Biotech & Managed Care/IHS
Palmer Ford, PremierS. George Simon, VivoRx
John Chiatalas, Karditsa ResourcesSeth Rowland, First Draft
VivoRx
First Draft
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The PanelistsJohn Chiatalas, Esq.
Karditsa ResourcesKohn & Associates
Palmer FordPremier Medical Partners Fund, L.P.
S. George SimonVivoRx™
VivoRx
Seth G. Rowland, Esq.Basha Systems LLC
First Draft
Agenda
Alliances with BiotechVivoRx: Innovator in BiotechPremier: The Ultimate IHSVivoRx/Premier AllianceBuilding and Negotiating the Collaboration
Strategic Allianceswith Biotech Companies
Traditional Alliance: Big Pharma and Innovative Biotech– Access to Capital– Clinical & Regulatory Expertise– Sales & Distribution Network
New Model: Collaboration with Providers– Access to Patients & Clinical Trials– Access to Patient Outcomes Data– Access to Centers of Excellence
VivoRx: The Technology
VivoRx, Inc.
BetaRx– BetaRx-H– BetaRx-PR– BetaRx-P
Pharmacoeconomics of Diabetes
VivoRxPharmaceuticals, Inc.
CapxolProtoSphere CRADA with NCI Lupus VaccineMDSHHT
Objectives of VivoRx
Staying Private vs. Going PublicShort Term Capital Requirements (Burn Rate)Strategic InvestorsLong Term Capital Requirements– Initial Public Offering– Label Expansion– In-licensing Diabetes Products &
Technologies
Capital Requirements and Expense
Mylan Pharmaceuticals
North American Rights– Up-Front License Fee– Equity Investment– Product Development
Funding
Strategic Investor / U.S. Marketer
Goal: To Develop Centers of Excellence
BetaRx™ – Living Cell– Administered on
Outpatient Basis– At Diabetes
Treatment Centers
Capxol™ – Novel formulation
of Paclitaxel
Centers of Excellence (Cont.)
Clinical Development– Expansion of Orphan Drug Indication– Participation of Leading Clinical
Research CentersMarket Approval and Product Launch– Physician Training– Facility Training (QA/QC)– National Product Roll-out– Establish Centers of Excellence
Centers of Excellence (Cont.)
Illustrates Need for Strategic Partner – Access to Patients & Centers– Access to Capital
The Challenge– Identification of Ideal Clinical
Development Partner
Premier as a PartnerPremier as an InvestorNature of the Integrated Health Care System– Continuum of Care– Best Cost Outcomes
Outcomes Management: New ModelBarriers to Entry/Strategic Partners
OwnersAffiliates
Gross Revenues 1996 $71 BillionTotal Alliance Organizations 1800+ HospitalsNational Group Purchasing $10 Billion
Services:Group PurchasingInsuranceConsultingInvestments
Governance EducationBenchmarking/OutcomesManaged CarePremier Institute
(Washington, D.C.)
Premier Medical Partner Fund, L.P.
Charter:Invest in innovative products and services that reduce the overall cost of healthcare, while promoting patient well being.Financial Return for Limited Partners
Funds:$36 Million(Venture Capital)
Investments: $2-5 Million(Non Public)
Targets:Strong Patent PositionLater Stage Development Companies (Phase II)Pre-Money Valuation starting at $10-30 Million
Premier Medical Partner Fund, L.P.
Limited Partners:Becton DickinsonCR Bard Executive RiskFuji 3MJohnson & Higgins
KendallPremier Purchasing PartnersKinetic ConceptsMallinckrodtNycomedServiceMaster
Outcomes Management
Currently economicsbased ... without data
Procedure (surgical)ProtocolFormulary
ACUTEDISCHARGE
OUTPATIENTMANAGED CARE
Different:FormularyProtocol
NEW
CONTINUUM OF CARE
DeviceBest outcome ... Pharmaceutical
ServiceNew focus
OLD
The Integrated Health Care System
Nationwide: Formulary based on internal outcome dataProtocolsProcedures
CONTINUUM OF CARE
Hospitals
SubacuteTertiaryRehab
Surgicenters Clinics
RESERVED RESERVED
CLINIC HMOPHO
PPOHome
Hospital Based Computer System
Local HospitalsClaims/EligibilityClinical DataReferralsPaymentAuthorization
Tertiary CareHospital
SubAcute
AlternateCare Centers
Rehabilitation
Patient DemographicsMedical Records
Clinical DataClaims Payment
Prescriptions
HomeHealth Services
HomeHealthcare
Suppliers/Distributors
ProviderNetwork
Supplier
DistributionOrganization
Manufacturer
Systems/Logistics
StocklessJust in Time
Managed Care/Outpatient
Physician Networks
Claims/EligibilityPrescriptionsDrug-Drug Interactic
HOME MONITORING
Primary CarePhysician (PCP)
Claims/EligibilityClinical DataReferrals Pharmacy
Pharmacists
TestCenter
Laboratories
SpecialistClaims/EligibilityClinical DataReferrals
Physicians
Physician Link (Data)
PRO
TOC
OLS/O
UTC
OM
ES/
Therapeutic RegimenProtocol
FormularyUsage
Outcome Data
PharmacyBenefit
ManagementOutcomes
Data Company
•Comparative Database•Episodes•Report Cards•Outcomes“Flexible Episodes
Best Cost Outcome
vs: Lowest Cost DrugLowest Cost Procedure
TPAs
Insurance Carriers
Insurance Co.’s
Payors:•Boeing•IBM•GM•Ford•Chrysler
Historical Data
Compliance Data
Utilization Data
Reduces Inventory
Pharmaceutical Joint Venture Opportunity
VivoRx™ Technology
New Technology, LBO, Ventures
$36 MM
Premier Medical Partners, L.P.
3M, Nycomed, Kinetic Concepts, Fuji, Becton Dickinson, Kendall, Executive Risk, Servicemaster, Johnson & Higgins, CR Bard
Hemocleanse
PrisMedical
Investmentin $MM
Combined:•Formulary•Protocols•Therapeutic Use Patterns•Outcomes
Purchase Commitment
FormularyBased
Pharmacy Benefit Manager
Outcomes
Lilly PfizerBMS Glaxo Etc.
Pharma. Manuf.
Generics
Europe Canada South Africa Asia Etc.
American Pharmaceutical Partners
Companies Like VivoRx™ Need a Strategic Partner
“The Wall”Large CompetitorsMajor DistributorsCost of Salesforce
Contracts (5-7yr.)ProtocolsFormulariesOutcome studies
VivoRx™ - Premier Alliance
VivoRx
Objectives of the AllianceNegotiation of Term Sheet with MasterDraft™ Assembly of Term Sheet
Premier - VivoRx™ AllianceObjectives of an IHS
Best Cost Outcome: Technology lowers costs of providing care and improves outcome.
Early access to cheap, effective, best-of-breed medical treatment.
Hot new technology to distinguish IHS from other providers.
Return on investment.
Win-win situation
Premier - VivoRx™ AllianceObjectives of Biotech Company
Need to attract investors by demonstrating potential demand.
Need for continued funding.
Need for investigational sites to speed up regulatory review and approval.
Need for access to outcomes data and clinical research.
Need for Guaranteed Purchase Commitments.
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