Biotech

Sara Demy was recently interviewed by Janelle R. Anderson on the Human Proof of Concept podcast during Biotech Showcase.  Janelle is currently a Managing Partner at CTI Life Sciences Fund.

If Biotech Showcase is the farm team for JPM, then Sara Demy is the coach. She literally got high fives when her conference burst onto the scene in 2008.  Since then, it has busted out of its first two locations and now boasts over 3,000 attendees, with 400 presenting companies and 1,000 investors. Listen as Sara explains the launch of Biotech Showcase.

On the second day of Biotech Showcase we examined what the biotech industry should expect from the Trump Administration with the help of our friends at Hogan Lovells. Over the course of the luncheon plenary and two afternoon workshops panelists discussed what lies ahead for the Affordable Care Act, the FDA and CMS.

Repeal or Replace?

When it comes to the fate of the signature program of the Obama Administration, the Affordable Care Act, our panelists were skeptical that the Trump team and the Republican Congress will be able to make good on their promise to repeal the Act and replace it with ‘something much better.’

Greg Simon, formerly Executive Director of the White House Cancer Moonshot Task Force, quipped, “You can’t replace reality with a bumper sticker,” underscoring the fact that the Republicans haven’t put forth any details on an alternative.

As Ken Choe, a partner at Hogan Lovells explained, “Lots of balancing of interests went into the ACA that will make it hard to unwind.” For example, as Liz Fowler, Vice President of Global Health Policy for Johnson & Johnson pointed out, ACA included a ‘drug company tax’ that was levied against biopharmaceutical firms in exchange for the promise that more patients would be brought into the health care system through greater access. If the ACA is repealed, those companies may, rightly, want a refund.

Another complicating factor is the fact that the biosimilars regulatory pathway is part of the ACA. If that law is repealed, new legislation will be required to restore the pathway.

As to what a replacement program might include, Dan Todd, Principal at Todd Strategy, said that while details are unclear, it is likely it will include high risk pools to cover patients with existing conditions and advanceable tax credits in place of subsidies.

Wither the FDA?

While many names have been mooted as potential FDA commissioners, (including Joseph Gulfo, Executive Director of the Lewis Center for Healthcare Policy and Technology, who moderated our FDA workshop), President Trump has not yet produced a nominee. As a result, it’s hard to speculate what direction the agency might take, however, our panelists did their best to comment on the rumors and speculation that have been making the rounds.

Jane Axelrad, Principal of Axelrad Solutions LLC, who previously served as Associate Director for Policy at the Center for Drug Evaluation, noted that there are fewer than five political appointees at the FDA. The majority of the agency staff are civilian employees who have been with the agency through several administrations. So a change in administration does not necessarily spell wholesale change at the FDA.

Jane and other panelists expressed more concern about the impact of the government hiring freeze on the agency which has been notoriously hard to staff – particularly in light of the fact that many agency staff may take this change in administrations as an opportunity to retire.

As Senator Norm Coleman, now Of Counsel at Hogan Lovells, pointed out, “It is likely the administration will push the agency farther than it wants to go.” Jane agreed, saying “Staff will resist any push to undermine the rigor of the drug approval process until they are overturned up the line.”

The panelists dismissed the idea that has been floated that the FDA should be reworked to focus reviews on safety and not efficacy. It was noted that payers would not be willing to reimburse drugs without proven efficacy making the idea a non-starter.

The Fate of Other HC Initiatives

As Jane pointed out, many of the health care reforms that are in process are already enshrined in the 21st Century Cures Act, signed into law in November by President Obama. Among other things, this sweeping legislation covers the adoption of Electronic Health Records (EHRs), patient-focused drug development, the use of Real World Evidence (RWE) and the Cancer Moonshot.

In fact, Greg Simon explained that the change of administrations is having virtually no effect on the Cancer Moonshot, explaining “It’s not important if the program is officed in the White House.”

Prognosis for the Next Four Years

Summing up the panelists prognosis for the next four years, Julie Gerberding, Executive Vice President and Chief Patient Officer for Merck, explained, “The government is designed for stability.” None of our panelists expect that the new administration will be able to accomplish the radical reforms proposed on the campaign trail.

The biopharmaceutical industry should, as Greg Simon advised, “Go about your business and continue to try to do the best you can” and hope the new administration chooses “neglect” when it comes to our industry. 

For those of us who have been making the rounds of the investor meetings in 2015, it’s not news to hear that biotech’s time has come – in fact it’s almost a cliché.

Are we in another biotech market bubble, or have things fundamentally changed? That’s been the lingering question. But now financial data is beginning to come to light that supports the position that we are in the midst of a sea change rather than a bubble.

Bruce Booth, one of our favorite VC’s and a thoughtful blogger on biotech finance, did an analysis of post IPO performance of the recent crop of newly public biopharma companies. He discerns that a degree of pricing discipline for biotech securities is emerging that is indicative of a maturing sector.

In a more obvious indicator of market maturity, in Fierce Pharma’s ranking of the top 15 pharmaceutical companies by sales for 2014, Gilead displaced Eli Lilly, becoming the first biotech company to make the list.

It is against this backdrop that Demy-Colton Life Sciences Advisors is launching the Biotech CEO Summit as a forum where key biotech leaders who are reshaping the biotech landscape can serve as a ‘brain trust’ for the industry as it grows to maturity and sustainability.

The private interactive forum will be held July 21 to 23, 2015 at the Carneros Inn in Napa, CA. Attendance will be limited to an invited group of 40- 60 CEOs who are thought leaders and influencers in the biotech industry.

We undertake this project with the goal of bringing together prominent thought leaders from industry or academia, leading investors and global key opinion leaders to examine and address the opportunities and challenges the biopharmaceutical industry faces as it forges a future where it will indeed deliver on the promise of transformational science.