Knowing which products have verified profitpotential before development begins helpsdefend their value to investors and reduces therisk of costly marketing errors.IntroductionAssume a generic drug company, let’s call them AB Generics,Inc., always targets the introduction of its generic drugs whenthe reference product comes off patent. AB’s executive teamhas looked ahead and seen the generic cliff — few productscoming off patent after 2016 — and is looking for alternativerevenue sources. They know that the 505(b)(2) NDA pathwaycan be used to make changes to reference products, but a majorquestion is which products offer the greatest profit potentialand least risk.For innovative pharmaceutical companies, opportunitiesfor new pharmaceutical products exist within the products,patents, technologies and intellectual properties they alreadyown or control. But for generic companies, there is usually nobasis other than their manufacturing capabilities upon whichto select a 505(b)(2) candidate.AB Generics, Inc. has turned to the 505(b)(2) developmentleader, Camargo, to identify and assist in the development ofits 505(b)(2) candidate. Camargo Pharmaceutical Servicesoffers a clear process to identify products that have documentedmarket differentiation.Selection CriteriaOur first step in choosing a product to develop is an assessmentof the client’s business profile — what the client brings to thetable as a starting point charted against its specific goals andbusiness needs. The criteria that are germane to this are manyand may include everything from existing products or APIsthe client holds, to market areas it wishes to enter or targetedpopulations it wishes to address.This narrowing of focus is essential to getting beyond broadand unmanageable marketing segments, such as indicationsor diseases, and down to highly specific definitions of uniqueproducts and discrete market segments. The research effortspans the scientific, medical, manufacturing and commercialspace because all must work in tandem to create a productthat can be defined, differentiated from what else is availableand effectively marketed at a profit.How the Process WorksOnce the market segment has been narrowed, the next stepis to identify, assess and rank each unmet medical need interms of product viability. Considerations to establishproduct viability cover a lot of ground and include a broadrange of potential research and reporting activities, including:Market segmentation • Disease overview • Epidemiology • Current standards of care • Needs assessmentProduct analysis • SWOT analysis • Critical success factors • Strategic objectives • HEOR • Drug development programs • Positioning and target product profile (TPP) development • Non-clinical programsProduction analysis • Regulatory considerations • CMC considerations • 505(b)(2) candidate assessmentIdentifying products fordrug development programswww.camargopharma.comDmNK R cOH
Marketing analysis • Market and competitor assessment • Detailed commercialization plan • Distribution assessment and plan • Key messagingInvestor analysis • Financial analysis • Partner targets • Pipeline analysis • Compendium assessment and planProfit potential • Payer reimbursement plan • Pricing developmentAs an example, a European pharmaceutical company soughtCamargo’s assistance with entering the U.S. market via a505(b)(2) NDA filing for its drug candidates. The productshad been developed with proprietary drug delivery technologyand its plan included transfer of both manufacturing andclinical studies to U.S. service providers.Before this company made decisions about manufactureor clinical development, however, Camargo conducted acomprehensive feasibility assessment to achieve in-depthunderstanding of critical factors affecting the U.S. marketpotential, including need in the therapeutic area, thecompetitive environment, payer acceptance in the drugtreatment category and regulatory considerations.Armed with this knowledge, the client was able to plan itsmarket-entry strategy and prioritize the products with thehighest potential market value. Camargo’s detailed timelineand cost analyses, both of which were key elements of theassessment, identified drug development time frames andcosts before embarking on the projects.Defending the ValueIf the object is to maximize investment from outside entities,research studies serve the purpose of defending the value ofthe product to investors by proving its validity.The 505(b)(2) development pathway provides a lower riskpathway to obtaining marketing approval in the UnitedStates. Because drugs approved under 505(b)(2) can rely inpart on data from existing reference drugs, they have knownsafety profiles and efficacy endpoints and can achieve FDAapproval with only a fraction of the number of requiredclinical trials and at a much lower cost.The pathway also yields products that will be of interest todifferent types of partners and investors, depending on whenthey are approached. There are four distinct “inflectionpoints” that impact the value of a 505(b)(2) drug candidatein clinical development: • Completion of the pre-IND meeting with FDA • Proof of concept (PoC) achieved in man • Filing of the New Drug Application (NDA) • FDA approval of the NDAAs you can see from the chart below, the best time to approachinvestors in terms of the royalty rate is as soon as the proof ofconcept has been established in man, when the average royaltyrate more than doubles. This is the moment when evidence inhand is most valuable.Elements of Deal Value – Royalty RateAverage Royalty at State of DevelopmentCase HistoryPentamidineAlthough Pentamidine had been approved for sleepingsickness, research uncovered a new indication as atreatment and prophylaxis for AIDS-related Pneumocystispneumonia (PCP). Because Pentamidine addressedan orphan indication and was reformulated through505(b)(2) in an aerosolized dosage form that reducedside effects, patents granting market exclusivity wereissued. The company was sold for more than $1 billion.
Maximizing InvestmentInvestors lend most credence to those propositions where it isobvious that due diligence has been performed. To maximizeinvestment, it’s important to nail down your defense of thevalue in each area before you approach investors.Clinical development • Project management by established experts in: - Technical assessment and product formulation - Clinical trial management - Regulatory strategy and interaction with FDAIntellectual property • Types and sufficiency of product patents • U.S. marketing exclusivity • Life cycle management strategyProduct revenue forecasts • Product differentiation and market positioning • Pricing and discounting strategies by payer class - Managed care - CMS programs • Compendia positioning • Distribution strategies - Third-party logistics, wholesalers and retail chains • Sales and marketing strategies - Targeted physician audience (breadth and depth) - Direct to consumer promotion - Social media, other non-traditional promotionProduct and promotional cost forecasts • Manufacturing strategy - Product unit cost expectations - Licensed technology royalties - Redundancy • Product liability/insurance strategy - Assessment of insurance industry capacity - Insurance costs and structures • Sales and marketing infrastructure - Size and cost of sales force - Cost of A&P programs - Effective tax rate optimizationNarrowing a Universe of PossibilitiesDown to OneMany of us are in the pharmaceutical business because wehave a drive to help alleviate the world’s suffering. But givenall the world’s diseases and medical conditions and theirstages, all the organs and systems of the human body, all thedifferent human population groups, all the possible drugdelivery platforms, and all the compounds known to have aneffect in humans, the concept of choosing a single pathwayto address is almost inconceivable.When this decision is additionally complicated by factors thataffect viability in the marketplace, including the competitiveposition; costs of manufacturing, marketing and distribution; andavailable patent protection, among others, only a deliberative,step-by-step approach by a team of experts can narrow theuniverse of possibilities down to a manageable number ofviable options. And only expert analysis can choose the bestoption from an array of possibilities.Many companies perform studies; few have the marketexpertise to synthesize the results into a viable 505(b)(2)development plan. Camargo, the leader in 505(b)(2) drugdevelopment, has developed a detailed process for choosingappropriate development candidates. We are eager to putthis knowledge to work for you.Case HistoryAmphotericin BAmphotericin B is a polyene antifungal drug, often usedintravenously for systemic fungal infections. Administeredorally or intravenously, it is well known for its severe andpotentially lethal side effects, including high fever, shakingchills, hypotension, vomiting, headache, dyspnea andtachypnea. Reformulated as a liposome through 505(b)(2),the new product is difficult to genericise and dramaticallyreduces side effects and improves efficacy. www.camargopharma.comCase HistoryGlycopyrrolateOriginally approved for reducing gastric and othersecretions intravenously before surgery as well as for useduring anesthesia and intubation, a Glycopyrrolate tabletformulation is approved for peptic ulcers. Research intonew indications and formulations led to the developmentunder 505(b)(2) of a liquid formulation for cerebral palsypatients to reduce drooling. This new formulation wasgranted orphan drug status for new indications. It iscurrently being developed as a long-acting muscarinicantagonist (LAMA) for COPD patients in MDI, DPI andnebulized dosage form. The estimated market potential forthese new indications exceeds $1 billion.
www.camargopharma.comAbout Camargo Pharmaceutical ServicesCamargo Pharmaceutical Services is your full-service drug development partner specializing in the 505(b)(2) process. Beforedevelopment even begins, we verify profit potential by working with your team to develop a comprehensive program andtimeline complete with important milestones and cost objectives. We manage every facet of the plan throughout yourdevelopment continuum, from feasibility assessments, formulation and testing the drug product, to conducting preclinical andclinical studies, to final submission. Connect with Camargo on LinkedIn, the President’s blog or visit www.camargopharma.comfor more information.Worldwide ReachMore than 25 countries across North America, Asia, Europe and Australia.Camargo’s regulatory know-how and customized clinical solutions are as varied as our clients’ global drug development needs.1.513.561.3329 toll free 1.888.451.5708 www.camargopharma.com2505 Meridian Parkway, Suite 175Durham, NC 277139825 Kenwood Road, Suite 203Cincinnati, OH 45242-6252