Beyond borders: biotechnology industry report 2013
Evidence determines success
Evidence determines success, by Helga Rübsamen-Schaeff, PhD, CEO, AiCuris
In October 2012, AiCuris — a German company specializing in anti-infective cures — and US-based Merck & Co. announced a licensing agreement that attracted much attention in industry circles. The deal was particularly noteworthy for the size of its up-front payment — €110 million (US$141 million) — the largest such payment in Germany and one of the five largest worldwide.
How were such terms reached at a time when big pharma companies are structuring deals with smaller up-fronts and larger milestone payments? While each deal is unique, we believe our approach could have lessons for other biotech companies in today’s challenging business environment.
At AiCuris, one of our focuses was on human cytomegalovirus (HCMV), an infection that typically has no symptoms in healthy people but can be fatal for patients with weakened immune systems. When we initially sought to out-license our lead HCMV product, Letermovir, and follow-up compounds, we had positive Phase IIa data for Letermovir in a trial involving 27 organ-transplant patients. However, we soon discovered that Phase IIa data is not sufficient to attract strong deal offers, and we were dissatisfied with the initial offers we got from potential partners.
So, we decided to invest in collecting more data. This included clinical data, through a Phase IIb trial that ended up meeting all primary and secondary endpoints. In parallel — and just as important — we conducted market research to demonstrate the economic value of our lead product Letermovir based on several factors:
- Good positioning in a rapidly growing market. Our research found that the HCMV market is characterized by double-digit growth and very little competition (existing drugs have safety issues and the only other drug candidate in Phase II trials was a prodrug of an existing drug). There is a strong basis for expecting the AiCuris drugs to significantly replace existing treatments.
- Physician uptake. Our analysis showed that a drug with our profile would be welcomed by physicians, not only in the transplantation indication but also for other at-risk HCMVinfected patients, such as newborns. For such at-risk patients, we discovered that physicians would be willing to use the drug for prevention. Research also indicated that there is a significant number of patients who have become resistant to existing therapies and that the drug could be used to safely treat them due to Letermovir's novel mode of action.
- Expansion potential. Letermovir's high efficacy and safety provides an opportunity to add indications that are currently not covered by existing drugs. Our portfolio of drugs with different modes of action could also create an opportunity to combine drugs for particular indications.
- Attractive pricing. We found that HCMV is seen as an indication that, due to the significant unmet medical need and high costs associated with complications, should support adequate pricing.
- Orphan status. HCMV is widely distributed around the world but is often undiagnosed because of the absence of symptoms. So while the potential market is huge, the immediate reality we face is that of a much smaller market. We were therefore able to obtain orphan drug status on both sides of the Atlantic — an area of increasing focus for big pharma companies. Armed with positive Phase IIb data — and, more important, market research to support the value of our pipeline — we were approached by a number of potential partners.
While all our circumstances may not apply to every other biotech company, our basic approach is critical. In today’s market, it is very important to show partners and payers the value of the products. Evidence determines success.