Pullan's Pieces #163 
September 2020

Dear Reader,

Looking forward to a great webinar panel on New Paradigms in Oncology Oct 8th.  Free.  Sign up here.  


This issue we are trying a new format.  Please let us know if you like it. And of course, we welcome any comments or suggestions for next time. 



In This Issue

  • Linda:  Watch out in Territorial Deals
  • Linda:   Biomarkers to Predict Response in Oncology
  • Jessica:  CD19 Fatigue
  • Trevor:  Originators of 2019 Approvals
Linda:  Watch out in Territorial Deals
The easiest deal to do is to do a simple handover for global rights.  The partner takes it and hopefully optimally develops your asset. 

Doing a licensing deal for a territory (versus doing a global deal) can be a great way to bring in cash earlier, get a partner to help advance the drug to entice a bigger deal second or to keep an asset in your pipeline longer.  All great reasons to do a deal for one but not all territories. 

But, a deal for less than global rights is more complex.  You have to think about the terms as not hindering the next deal and you have to think about how the parties will work together - and it may be how you, your first territory partner and your Rest of the World  (ROW) partner will work together.  So as you put together the terms of the deal, you want to think not only about what is acceptable to you, but what will be acceptable to your future ROW partner.  
1.  What is the aim of the deal? Is it DATA? 
This is a great question no matter what the deal. 
But if the aim of the deal is to get data to use for the next bigger deal, then it is critical to think about defining the visibility of that data and the rights to use that data.  You probably want a JSC and regular reporting.  Do you want to see their regulatory correspondence?You may want to get rights to reference their regulatory filings.  You certainly want to get adverse event reporting (often dealt with a separate pharmacovigilance agreement). 

It is tempting to make everything reciprocal.  They share all the data with you and you share all the data with them.  But your ROW partner may not like the idea of sharing all their data with another company, and typically, your obligations pass through to your sublicensees.  Perhaps your obligation should only to be keep the first partner reasonably informed to the extent necessary for their development, rather than a full data sharing on the global development. 
2.  Will it be global development?
Are you committing your future ROW partner to incuding this first territory's clinical trials in a global development?  If it is global development, does the first partner pay only for clinical work done in the territory (while getting the benefit of all the clinical data) or does the first partner pay a share proportional to the size of the market in that territory?   Will you and the ROW partner have rights to audit their clinical sites?  Replace deficient clinical sites?  Is there coordinated publication strategy?

If there is some separate development, you may want to agree to the initial development plan, and possibly to any changes (in the JSC typically).  You may want a veto over any development that will harm the bigger value in the ROW.   

Here is one version to avoid harmful acts:  

"If Originator believes that Territorial Partner is taking or intends to take any action with respect to a Licensed Product that could have a material adverse impact upon the regulatory status of the Licensed Product outside the Territory, Originator shall have the right to bring the matter to the attention of the JSC and the Parties shall discuss in good faith to resolve such concern."
3.  How will manufacturing work?  
There are tensions because the first territorial partner wants to benefit from economies of scale (with a per unit cost smaller if there is the scale of global manufacturing) but also may want control of supply for their own needs.  Typically this is dealt with in a separate supply and quality agreement (with forecasts and such to allocate product) but the ROW partner may want to use their own facilities and expertise to ensure quality and supply.  
4.  Cross-licensing new inventions
Will all the partners benefit from new inventions in other territories?  Does this include 3rd party IP?  Or do you not obligate the ROW partner of the future to share inventions?  
5.  All the usual topics of a term sheet
You will want to think about scope, non-competes, diligence, consequences of termination, etc.   All with both your perspective and the possible perspectives of your future ROW partner.  
Jessica:   CD19 Fatigue

It seems like every day a new CD19 targeted CAR-T, CART-19, is born.  There is certainly more improvement to be made in CAR-T technology, and no one feels as if the CD19 addressable market is “good to go” but…how many newer CD19-targeted CAR-Ts does the world need?
CD19 and Hematological Malignancies

The ubiquitous CAR-T target, CD19, was first described as B4 antigen in 1983.  It is expressed on follicular dendritic cells (DCs that hang out with B-cells in lymph tissue, and are derived from mesenchyme and not bone marrow) and B-cells at all stages of development, though it is lost when B-cells mature to plasma cells which are antibody-secreting cells.  Because of this ubiquitous B-cell expression profile, it is an ideal target for addressing B-cell malignancies.  The hematological malignancies which can be addressed with CD19-focused therapy can be designated as orphan diseases which has fueled interest in this target as a therapy. 

The precision with which CD19 targeted CAR-T, or CART-19, kills malignant B-cells has resulted in some clinical challenges.  One obvious clinical challenge is that of cytokine storms due to the intensity of the elicited immune response.  A less-discussed impact is that of B-cell aplasia, or loss of healthy B-cells, which renders CART-19 recipients in need of subcutaneous immunoglobulin replacement therapy in order to help them fight infections.  A graver challenge associated with CART-19 is relapse due to antigen escape, or acquired tumor resistance, in which the cancer evolves to modulate expression of the target antigen.  Clearly, there is much work to be done in order to optimize the performance of CART-19.

So, yeah, despite the approval of Kymriah® and Yescarta® there is more work to be done on CART-19.  However, it can seem as if CD19 is the only target that is being addressed by this innovative technology.  A few reasons for this are:

  • Me too – Classic; and there is nothing wrong with the - “we see what those guys did, but we can do it better” approach.  It is one of the best drivers of innovation

  • CART-19 optimization – as described above, the marketed CART-19 products are far from perfect and there is much work to be done here

  • Benchmarking – CART-19 is now the “gold standard” for CAR-T therapy and new innovators are developing their novel CAR-T products to CD19 in order to benchmark to this gold standard

Between the CART-19 optimization and the benchmarking motivations, we will see the emergence of allogeneic CART-19 products.  Fueled by both a desire to improve upon the technology as well as a need to benchmark against the “standard” autologous CART-19, most allo CAR-T initiatives are leading with a CD19 target.

How many CART-19 are there in development?

In a recent Global Data search of clinical trials for CAR-T cell therapies, 443 of 957 CAR-T trials were targeting CD19 - that is nearly 50% of all CAR-T.  When CART-19 is combined with BCMA, CD20 and CD22, CAR-T products addressing hematological malignancies well exceeds 60% of all CAR-T products.  Could 40% of CAR-T in clinical development be addressing solid tumors?
Global Data Clinical Trial Data – 14 September 2020

Target Practice

Below is a table of all targets identified in the recent Global Data search for CAR-T products in clinical trials.  The targets have been loosely characterized as:

  • Hematological malignancies – targets addressing lymphocytes, mostly B-cells
  • Solid tumors – targets addressing general somatic cell markers or tissue-specific antigens
  • Checkpoint Inhibitors – targets to disrupt the tumor suppression of the immune response; these could be used (likely in combination with another therapy) to address solid tumors
  • General anti-tumor – these products will address typical oncogenic and/or metastatic processes
  • Immune modulators – targets to direct/skew the immune response to be more lethal for tumors


CAR-T for Solid Tumors

Can CAR-T products emerge from a focus on hematological malignancies and address solid tumors?   The reasons why developing CAR-T for solid tumors has been difficult are:

  • On-target/off-tumor challenge   – identifying a unique target that is expressed on the tumor, and not normal tissue, has been difficult.  This is true for hematological malignancies, the on-target/off-tumor effect is the cause of B-cell aplasia in CART-19

  • One size fits none   – as with clothing, there is no one size fits all.  There is no single target that can address all solid tumors.  This is evidenced in the solid tumor targets (in the table above) that are being tested as most of them are tissue-specific

  • Tumor access   – one of the main reasons why checkpoint inhibitors have been such a hot area of focus for immunotherapies is to create a more conducive environment for immune cells in the tumor.  If small molecules and antibodies can’t penetrate a tumor how can a CAR-T cell?   Solid tumor focused CAR-T cells will likely be used in combination with some sort of checkpoint inhibitor or immune modulator

CAR-T therapies have been one of the most clinically promising therapeutic modalities to be developed in the last decade.  The proof of concept in hematologic malignancies, particularly with CD19 targeting, has been life-altering for those patients that have been fortunate enough to benefit from it. The general applicability of this treatment modality lies both in the ability to drive down costs (for instance by allogeneic products) as well as to address solid tumors in order to help significantly more patients suffering the affliction of cancer.
Trevor:  Originators of 2019 Approvals

There were 42 novel therapeutic drugs approved in 2019 and it got me thinking about where these drugs originated.  Were these the well-resourced wet labs and vaunted vivariums of Big Pharma, with thousands of employees and billions in revenues?  Or were these the nimble, CRO-deploying, scrappy biotech and small-mid sized pharma driving the innovation?  According to GlobalData, nearly 60% of the 2019 approvals had their start inside the biotech and small-mid pharmaceutical companies (less than $5B in revenue). An approval in 2019 means discovery was likely underway around or before 2010. 

The well-known shift in innovation (and painstaking early de-risking) from the big companies to the smaller ones was clearly underway at that time.  And we can chalk one up for the bastions of basic research in 2019 as well as just over 10% of the 2019 approvals we discovered in the hallowed halls of academia (the Pac-12 dominating with 3 – two for the University of California and one for the University of Arizona).

As seen in the righthand figure, Big Pharma still maintains a primary anchor leg in the relay race;  there remains a hand-off to big pharma (though perhaps not as large of a transfer as one might expect).  Big pharma markets than 50% of the 2019 approvals.  
And with the absolute explosion of the biotech sector in the last decade, it’s reasonable to expect that the sector will continue to see the market continue to be driven by innovative biotechs and well-resourced small-mid pharmas.  The demand for earlier stage biotech amongst investors is evident in the news flow of massive influx into life science venture capital and IPOs.  The demand is well represented in the chart below showing the increasing share of biotech as publicly-traded companies (blue line).
We’ll take this a few levels deeper next month, exploring clinical-stage assets tracing them back to the originators and the founding environments they were forged in.  Were they launched on the moon rocket of big VC money and connections?  Were they bootstrapped by indefatigable founders who cobbled together the early financing required to make the turn into (and through) the valley of death?  Let’s find out…
Pullan Consulting (www.PullanConsulting) provides advice and execution for biotech partnering and fundraising, with outreach to partners and investors, help with the shaping of presentations, evaluations and market analysis, preliminary valuations and deal models, and negotiations from deal prep to term sheets to final agreements.      
We have extensive scientific and financial experience, with many deals signed.  Check out the website for more on clients, tasks, CVs, etc.  And don't forget to look at the resources with whitepapers and decks to help. 

Send us an email or set up a call if you want to explore how Pullan Consulting might be of help!     
Linda Pullan                     Linda@pullanconsulting.com 
Trevor Thompson             Trevor @pullanconsulting.com 
Jessica Carmen               Jessica@pullanconsulting.com