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E&Y Super Session – Beyond Borders 2014 – Unlocking Value

June 25, 2014
More than 500 attended the super session to go over key findings in the 28th annual EY Global Life Sciences Report: Beyond Borders, Unlocking Value.

Glen Giovannetti, EY global life sciences sector leader, and Kristin Pothier, partner in the EY commercial advisory services, moderated.

Panelists were: Mara Aspinali, president and CEO of Ventana Medical Systems; Philip Birch, senior vice president, global strategic marketing, Aptiv Solutions; Brian Daniels, M.D., senior vice president, global development and medical affairs, Bristol-Myers Squibb; and Rachel King, CEO, GlycoMimetics, Inc.

Glen introduced the highlights of the report, which set the stage for discussions from the panel on future directions on unlocking value. He said 2013 was a good year for the commercial leaders in biotech. Those with over $500 million in annual revenues saw their market capitalizations increase by 74 percent, while revenues were up 13 percent. IPOs raised $3.5 billion during the year, which was second only to 2000.

He showed a chart with IPOs spiking in 2000, then disappearing as the U.S. went into a recession, he said. There was a bubble in 2000 but the current investor interest and potential is real. There is no hype, with stocks getting huge valuations just by having the word “genome” in the name on the prospectus. The recent IPOs are being driven by market leaders with real products and more mature companies that had advanced into later stage clinical trials.


Beyond 2013, the industry needs to make a major move to show value and demonstrate outcomes. He said large biopharma companies have relatively little to show for their internal R&D spending. The trends led EY to think about how to better conduct R&D. He cited a value leakage in biotech R&D. Value is not always recognized as a company goes through a seed round, venture round, trial results, strategic alliance and then trial results.

He said there are four levers for unlocking future value: increase probability of success; reduce capital investments; shorten development time; and increase sales.

Increasing the probability of success requires precision medicine, he said, which is mainly confined to oncology. Yet only 8 to 12 percent of oncology drugs in pipeline use biomarkers.

To become more productive, a new model would have adaptive clinical trial strategies based on faster analysis of data, adjusting as data comes in, conducting interim analyses and combining phases were needed.

EY found that only 20 percent of clinical trials involve some type of adaptive design.

Another strategy: entering into precompetitive consortia. The approach would accelerate medicine partnerships, solve shared challenges, help with pooled data, create standards and better engage payers and regulators.

The recommended approach is complicated because biomarkers and adaptive trials require specific expertise. Upfront costs keep many companies at bay, he said. Also, internal incentives get in the way. The concept of fail fast is often difficult for small companies that have few projects in the pipeline.

Kristin Pothier, from EY commercial, facilitated the panel discussion to pursue ideas for unlocking value in the future. She asked the panelists to provide their ideas on how biotech companies can recapture some of the value they gave away in recent years. How can capital be used more efficiently in clinical trials?

Brian Daniels, a physician, stressed the importance of being clear on the target and making strategic investment decisions. Being successful may not be achieved for years, which is difficult for investors to understand.

Rachel King said companies need to show value to the patient. Smaller biotech firms need to validate their technology, which can be a challenge with fewer things in the pipeline.

Phil Birch, from Aptiv, said in looking at the journey as a service provider, his firm tries to make the journey more effective and productive. The key is to use investment dollars more effectively to increase possibility of success.

Mara Aspinali said she has been involved in many trials where the approach is all about thing: accelerating the trial and bringing the drug to patients as quickly as possible.

If a firm has clear markers and can recruit people to trials faster, they will get faster approval, she said, although the success varies from disease to disease and country to country. Mara cited a study of 908 cancer compounds over 10 years from 1999 to 2009. Those that had biomarkers had a 53 percent success rate and just 23 percent for others.

Rachel King said one encouraging development out of the FDA is creation of the breakthrough therapy designation. She said this could be game-changing in getting innovative drugs approved faster improving the economics of drug development.

All agreed that being more efficient and strategic in the development process, using biomarkers and adaptive trials and finding other ways to shorting the regulatory pathway will be a benefit to the entire healthcare industry, starting with the patient.