BioEntrepreneurship: Intellectual Property: What Do Investors Look For?


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Strong patent protection is essential for a start-up biotechnology company and can be a valuable company asset. However, it is also expensive, with costs ranging from tens to hundreds of thousands of dollars over time. This session will focus on how to get the most out of your patent dollars.

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BioEntrepreneurship: Intellectual Property: What Do Investors Look For?

  1. 1. Intellectual Property What Do Investors Look For? Dr. Andre Uddin VP Strategic Development Transition Therapeutics Inc. Page 1 of 17
  2. 2. Criteria for Biotech Investment ! Excellent Management ! Strong Balance Sheet (2 years of cash) ! Products Targeting Large or Untapped Markets ! Strong Pipeline of Products ! Solid Intellectual Property Page 2 of 17
  3. 3. Other Considerations ! Clinical Data ! Diseases ! Clinical Trials ! Health Care Savings ! Competitors ! Manufacturing ! Product Development program ! Technology Platform Page 3 of 17
  4. 4. Only the Paranoid Survive “ When business andofthe old ways of competing,structure, from the old ways of the balance forces shifts from the old “ doing to the new. - Andrew S. Grove Business goes onto new heights Disruptive forces Value Creation Business declines Time Page 4 of 17
  5. 5. The Pharmaceutical Industry Strategic Inflection Points 1820 to present 1820~1880 Natural Products have active principles 1880~1930 Isolation of chemicals from plants, dyes and organic chemistry 1930~1960 Large scale synthesis 1960~1980 Determination of Mechanisms of Action Chemical Transmitters Biological Receptors 1980~2000 Advent of Molecular Biology Monoclonal Antibodies Drug Delivery Genomics 2000~Present Convergence of Pharmaceuticals/Medical Devices RNA interference (RNAi) Page 5 of 17
  6. 6. Pharmaceutical Life Cycle Patent Expiration Generics Launch les a S Page 6 of 17
  7. 7. Building A Patent Estate Typical Pharma Patent Portfolio High NCE Patents Mechanism of Action Patents VALUE Method of Treatment Patents Formulation Patents NCE Salt/Solvate/Polymorph/Crystalline habit Patents Process Patents Gene Patents Low Source: GlaxoSmithKline Page 7 of 17
  8. 8. Typical Modern Pharma R&D Process Source: GlaxoSmithKline Page 8 of 17
  9. 9. Successful Pharmaceuticals with Exclusivity/Method of Use Patents Company Drug Use Sales (USD) BMS Taxol Cancer > $1B/yr (peak) GSK AZT AIDS $700M/yr (peak) Astellas Adenocard (adenosine) Cardiac $285M/yr (2004) Celgene Thalidomide Cancer $418M/yr (current annual run rate) KOS Pharma Niaspan (niacin) Cholesterol $441M/yr (2005) Page 9 of 17
  10. 10. Regulatory Exclusivity A fixed period of time within which a regulatory authority will not allow approval of a generic abbreviated/abridged application of an approved drug Page 10 of 17
  11. 11. A Cautionary Tale “ In science the world, goestotothe man towho the the credit the man “ convinces not whom idea first occurs. - Sir William Osler ! Dr. Horwitz, synthesized AZT in 1964 as a potential anticancer agent - didn’t work ! Developed and sold under a patent once owned by GlaxoSmithKline ! AZT became a highly successful anti-HIV drug (peak sales of US$700M) ! Dr. Horwitz nor his university ever saw a penny “Missed Chances” Goldie Blumenstvk, Chronicle of Higher Education Chances” Blumenstvk, Page 11 of 17
  12. 12. Anything is Possible Highly Valued Patents “ It is harddeserves timeworn impact of PCR… to exaggerate the actually superlatives like “ quot;revolutionaryquot; and quot;breakthrough.” - Tabitha M. Powledge Case Study: PCR ! 1983 Dr. Kary Mullis at Cetus Corporation conceives of Polymerase Chain Reaction (PCR). PCR is a simple yet elegant process that enables the production of virtually unlimited copies of genetic material in the laboratory. ! 1985 Cetus files first PCR patent application. First publication of PCR by Cetus appears in Science. ! 1987 Cetus is awarded fundamental patents for PCR. ! 1989 Cetus agree to begin joint development of diagnostic applications for PCR. ! 1991 PCR patent and related technology sold by Cetus to Roche for US$300M ! 1993 Dr. Kary Mullis shares Nobel Prize in Chemistry for conceiving PCR technology Source: Roche Page 12 of 17
  13. 13. Anything is Possible Highly Valued Patents Case Study: RNAi ! 2005 Sirna Therapeutics first company to advance RNAi compound into human trials ! April 3, 2006 Sirna Therapeutics Granted First Broad siRNA Patent for a Gene Target in the United States ! Present - Sirna has 52 issued patents and more than 270 pending patents in the area of RNAi ! October 30, 2006 Merck purchases Sirna for US$1.1 BN Page 13 of 17
  14. 14. Patent Enforcement “ A manofhad better his family by influenza, to him in thisdispute have anything happen world short losing all than have a “ about a patent. - 1892 Quote from Master of the Rolls (Head of English C of A) “ Irather as a casino. the law courts not as a cathedral but have come to regard “ - 1977 Quote from Editor of Private Eye Page 14 of 17
  15. 15. Anything is Possible Highly Valued Patents Angiotech/Boston Scientific’s Paclitaxel coated stent ! 1998 Angiotech licenses paclitaxel-coated stents to Cook/Boston Scientific ! 2004 Angiotech/Boston Scientific launched TAXUS in US - peak sales of US$2.6BN Page 15 of 17
  16. 16. Anything is Possible Highly Valued Patents Case Study: Getting around Angiotech’s Paclitaxel coated stent patents ! 1999 Conor founded to develop stents which have drug reservoirs in their struts ! February 1, 2005 BSX/Angiotech sues Conor for patent infringement ! February 18, 2005 Conor Medsystems Files lawsuit to revoke Angiotech patent ! February 17, 2006 Conor receives CE mark for its CoStar paclitaxel Drug-Eluting Stent ! February 24, 2006 U.K. High Court of Justice ruling invalidates Angiotech Patent on Paclitaxel Coated Stents ! November 16, 2006 JNJ announces the purchase of Conor Medsystems for US$1.4BN Page 16 of 17
  17. 17. Key Rules for Patenting 1. Avoid early public disclosure. File first, then disclose. 2. Do not publish interim results 3. Research the market and technical novelty of an invention before patent filing 4. If you cannot protect the patent from infringement, don’t file 5. File in the US first Page 17 of 17