Chemistry Today Ddt Pannelay Jan2009

Drug delivery Annie Jullien Pannelay ANNIE JULLIEN PANNELAY Drug delivery technology Mergers and acquisitions activity expected to increase ABSTRACT formulations will help drug companies respond to nearly $80 billion in lost value for drugs with expiring patents The drug delivery technology segment has grown in value during the next few years (3, 4). Secondly because drug from $15 billion in 2000 to $ 50 billion in 2008 to become delivery technologies can transform markets: using a more a key area in the pharmaceutical industry; start-ups as well reliable and more comfortable way of administration can as big players are involved. The market is growing quickly, have a great impact on the market size and sales. For but despite an increasing number of strategic alliances, the example, the use of opioids for pain management has seen pure M&A activity remained below 100 transactions for 2007 a tremendous increase thanks to the development of reliable and 2008. We expect M&A activity to grow since drug delivery transdermal drug delivery technologies. From seldom used companies are a key growth driver for the pharmaceutical hospital drugs, opioid transdermal formulations are now industry: Drug delivery technology is an answer to nearly $80 widely used and could get out of the hospitals thanks to this billion in lost value for drugs with expiring patents during the innovation. In addition, the cost is not any higher using next few years and it is an innovation enabler as well. M&A transdermal drug delivery technologies. Lastly, and this is transactions are the marriage of niche technologies, complementary where drug delivery is a real driver to innovation, new drug to each other, and they are intended to achieve profitability delivery technologies can enable administration of compounds through a more effective technology offer. Thanks to good that do not have an acceptable pharmacokinetic profile. access to venture capital funding, and the birth of new drug Molecules that do not meet solubility or permeability criteria, delivery players after spin-offs from pharmaceutical companies, but have a promising activity and a good safety profile, can we expect to see in the medium term a consolidation trend be developed and eventually marketed thanks to drug delivery and an increased number of transactions. The M&A activity technologies. Reaching an acceptable pharmacokinetic is expected also benefit from crisis-driven consideration to be profile can be achieved with drug delivery solutions. This is active, in number of transactions if not in transaction size. where drug delivery technologies add the most value in terms of filling unmet medical needs (See note on dissolvable The drug delivery technology bio-needles, a segment which makes possible – and easier global market grew from $15 than using inject able formulations – the use of therapeutic billion in 2000 to $ 40 billion proteins). in 2006 (1) (i.e. CAGR of approximately 18 percent vs. about 10 percent for the RECENT TRANSACTIONS IN DRUG DELIVERY overall pharmaceutical TECHNOLOGY market). Drug delivery is an active segment today, we The number of drug delivery licensing, co-development, estimate its size to reach $ manufacturing and M&A deals experienced a clear increase 50 billion in 2008 (2). The over the last few years, growing from just above 200 per year term “Drug Delivery in 2001 and 2002 to 336 in 2007 (5). If we focus only on Technology” refers to the M&A transactions, we see a strong growth from 20 deals in construct of the drug as well 2003 to almost 100 deals in 2007 and a slow down in 2008 Number of M&A transactions in drug delivery technologies. as its method of administration. due to the global economic situation. However, it is sometimes Drug delivery companies difficult to assess how big the “drug delivery” part of a deal develop either their own drug delivery technology, to be sold is, as the technology is often combined with a drug under via licensing to specialty pharmaceutical companies, or invest development. As for the amounts involved in the transactions, in new drug development together with the drug delivery technology they are mostly below $100 million, and often not disclosed, that makes the administration of this new drug possible. since they concern mostly privately held companies. Over the past twelve months, several notable transactions WHY ARE DRUG DELIVERY TECHNOLOGIES involving drug delivery technology took place: IMPORTANT? In December 2007, Philips Electronics N.V. (NYSE:PHG) acquired Respironics for $5.1 billion in an all cash deal. The drug delivery segment is a key function within the Respironics was focused on providing solutions for sleep and pharmaceutical industry. Firstly because it is a great life cycle respiratory markets, including respiratory drug delivery management tool: the marketing departments of big instruments. The acquisition of Respironics diversified Philips’ pharmaceutical companies first realized that drug delivery portfolio of healthcare solutions towards a bigger offer in technologies were a way to rescue compounds facing patent home healthcare, and an expected enhanced growth. expirations and generic competition. New drug delivery SpineOvations (San Diego, CA) acquired Discogen late 2007. 8 chimica oggi • Chemistry Today • vol 27 n 1 / January-February 2009

RECENT INNOVATION DRUG DELIVERY SYSTEMS: LIFE CYCLE MANAGEMENT IN DRUG DELIVERY TOOLS Drug delivery Theraject: Dissolvable bio needles J&J’s Risperdal Depot®: allows market entry Theraject is a California based early stage drug delivery company to new players? which focuses on developing pain-free, minimally invasive drug Risperdal (Risperidone) is the reference treatment for the treatment of delivery systems enabling administration of large molecule drugs. Schizophrenia and bipolar disorders. Risperdal® generated about The drug or vaccine is mixed with the base material in the right 2Bn sales in the US in 2007. Recently, Risperidone generics hit the proportion, and this mixture is used to mould micro needle arrays, market. Now the patents are in the public domain, other companies which are then incorporated in an adhesive patch. These micro needles can develop new formulations, and that is what Oakwood Laboratories create channels through the stratum corneum, allowing the drug to plans to do, using their micro sphere in-house technology: They will reach the viable epidermis, but the micro needles do not reach the develop a new depot injectable formulation, allowing one administration capillaries or the nerve cells. The micro needle array dissolves into every month, instead of daily, enhancing patient compliance. This kind the interstitial fluid that bathes the viable epidermis, thereby delivering of strategy allows smaller players to enter big markets. However, J&J’s the drug or vaccine. The TheraJectMAT permits needle less, pain-free Janssen has planned for it in advance, and its new depot formulation, application of large and small drug molecules or vaccines in a broad though being only a ‘two weeks’ vs. ‘one month’ for Oakwood, it is range of doses. already marketed. SpineOvation is a developer of biocompatible injectables for also strengthened its portfolio by recent alliances, such as the spinal disc and other orthopaedic applications. Discogen’s deal with ProMetics. In addition, CPEX Pharmaceuticals technology provides a method for intradiscal drug delivery, (NASDAQ:CPEX) was created as a spin off from Bentley which could enhance treatment for patients suffering from Pharmaceuticals. Bentley was a publicly traded specialty early stage degenerative disc disease. This intradiscal drug pharmaceutical company with two distinct businesses: Its delivery method is a complement to SpineOvations’ technology. emerging drug delivery business and its established generic The financial terms of the transactions were not disclosed. pharmaceutical manufacturing and distribution business. Tea Inovio Biomedical Corporation (AMEX:INO), a developer of (NASDAQ:TEVA), the biggest generic company, while acquiring electroporation-based DNA vaccine delivery technology, and Bentley in June 2008, did not wish to retain Bentley’s drug VGX Pharmaceuticals announced in July 2008 an all stock delivery activity. The drug delivery arm, CPEX Pharmaceutical merger. VGX specializes in development of DNA vaccines. was therefore created, and spun off. CPEX Pharmaceuticals’ Inovio’s electroporation-based DNA delivery technology performance did not disappoint, with its shares gaining almost increases gene expression and immune responses from DNA 20 percent in two months. These transactions lead to larger, vaccines. The newly formed company jointly develops a new sometimes multi-service companies. Pure drug delivery generation of vaccines based on its DNA vaccines, delivered technology players, in order to survive if they do not develop by the electroporation delivery device initially developed by new chemical entities and introduce new product themselves Inovio. These new DNA vaccines will be much more differentiated, have to offer a strong range of services. That is why mergers and hopefully their time to market will be reduced. and acquisitions make sense to them, enabling them to sell In April 2008, Abraxis BioScience, acquired Shimoda Biotech more services for a higher price and to reach the global and its subsidiary, Platco., located in Plettenberg Bay, South biopharmaceutical market. Technology companies have Africa, for $15 million upfront plus potential additional payment historically a better access to funding in North America than upon achievement of milestones. Abraxis develops albumin- in Europe, and drug delivery companies are no exception. bound formulations of anticancer drugs. Shimoda owns The number of new companies, the diversity of technologies cyclodextrin based formulation, and develops targeted delivery developed is higher on this side of the Atlantic Ocean. Hence technologies, based on viral components. The alliance broadens looking for mergers partners in the US and Canada makes Abraxis’ drug delivery strategies. Abraxis, whose only marketed sense for European emerging companies. Those who venture product, Abraxane® is currently tested for broader indications in this kind of project are expected to find venture capital funds happy to cooperate, exit their investments and give their PURE PLAYERS IN DRUG DELIVERY SYSTEMS ex-portfolio companies the chances of success they deserve. RECEIVE VC FUNDING Cross border transactions for emerging companies in drug Alimera Siences, initially a reseller of over-the-counter eye delivery will be a decisive step to the global market. Over the drugs has now partnered with the nanotechnology company next two to five years, we expect to see an increased number Psivida to produce its drug-device combo Medidur. Psivida of transactions in the drug delivery segment. Niche players has developed the only two FDA approved sustained release consolidate to offer a broader or more efficient range of back of the eye treatments for chronic eye disease – Vitrasert® solutions in their therapeutic areas. Well funded new companies and Retisert®. (Both products are marketed and sold by Bausch develop new technologies in drug delivery. For the pure players, & Lomb) Medidur consists of a tiny structure designed for implantation in the back of the eye, where it can emit small the licensing business model is more viable with a broader quantities of a corticosteroid in order to control a blinding offer. Strategic alliances will still be in larger numbers, but we condition called diabetic macular oedema. Alimera Sciences, forecast an increased number of M&A transactions. raised $30 million in a Series C round in August this year. Phase Rx specializes in RNAi strategies. RNA interference REFERENCES AND NOTES (RNAi) is a mechanism that inhibits gene expression, and it 1. Leading Drug Delivery Companies and Technologies: Competitive is exploited to develop strategies against cancers and viral landscape, company profiles and technological developments, Business infections. PhaseRx is trying to create a more effective way to Insights , June 1, 2008. deliver siRNA, using a synthetic polymer, and creating an 2. Etradex Estimates. 3. Fuji Kenzai report. inject able drug that enters the bloodstream with limited side 4. See “Janssen and Risperdal Depot”. effects. PhaseRx raised $19 million in January 2008. 5. Drug Delivery Report, from PharmaVentures. TyRx is focused on implantable surgical pouches that are infused with antibiotics and other drugs. Its products are intended to prevent infection after implantation of devices ANNIE JULLIEN PANNELAY through surgery. Its current products include pouches for implanted defibrillators: AIGISrx™ CRMD is constructed of Etradex Corp. knitted filaments of polypropylene coated with a proprietary 161W, 54th street resorbable polymer that elutes the antimicrobial agents for a New York, NY10019, USA minimum of seven days to reduce the risk of infections. TyRx Pharma, raised $25 million in February 2008. chimica oggi • Chemistry Today • vol 27 n 1 / January-February 2009 9

Chemistry Today Ddt Pannelay Jan2009

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