cfo track john lawson & pierre bourassa traditional drug development process

CFO Track

John Lawson & Pierre Bourassa

Traditional Drug Development process

Preclinical Testing

Phase I

Phase IIA

Phase IIB

Phase III

NDA

Market

Va

lue C

reatio

n

Discovery5,000-10,000 compounds screened

250 compounds enter pre-clinical

5 compounds go to Phase I

80% pass Phase I

30% pass Phase II

80% pass Phase III

One compound makes it to Market

Source: Ernst&Young Convergence: The Biotechnology Industry Report, 2000

Risk vs. valuation correlation

Source: MDS

Retain a good investment infrastructure Agreements on market access & price Flexible competitive worker costs International respect for patents Growth in healthcare spending

Regulatory alignment with FDA Parallel approval systems Acceptability of Canadian data Similar ethnic/genetic profile to

Maintain integrated healthcare system Strong primary/secondary care links Access for strong Canadian CROs Low propensity towards litigation

Encouragement to do large clinical trials They generate income They reduce drug costs They give access to newer therapies

Economic production facilities for biologics 25% of drug pipelines involve biologics Grow expertise in adding IP to

processes Provide facilities for bio-manufacturing

Encourage research to replenish pipelines Fund basic & pre-clinical research Expand enabling technologies

(genomics) Stimulate convergence of expertise

Move core activities along drug cycle Foster clinical expertise Incentivise professionals not to migrate Share in global sales successes

Nurture SME spin-offs Provide core university/institute funding

Support a stable Canadian VC structure Provide attractive R&D credits

Bourassa & Lawson 2007

Stay focused Investors want to see steady linear progress Product valuation triples from Phase II to III Drug/market complexity increases competitive

barriersUnderstand your true worth Market ‘need’ is more important than its current

size Drug companies have declining pipelines Value increases in areas of unmet medical need

Assure the integrity of your IP Look for, and cover, potential loopholes in patents Perform good searches of competitors/channels Consider bio-production to add/extend protection

Consider niche or limited applications

Orphan drugs may be fast tracked Move further along value chain in small segments Consider niche global markets with few KOLs

Time is of the essence Every day is worth an average $1 million in sales Get adequate early funding, return visits waste

time Quick results bring investor credibility

Speak to Big Pharma early Adequately protect your conversations Use enabling technologies (eg. genomics) where

possible Stimulate convergence of expertise (local clusters)

Bourassa & Lawson 2007

Today’s panelistsBertrand Bolduc, President & CEO Mistral

Pharma

Adam Buckley, VP Variation Biotech

Jean Paul Castaigne, CEO Angiochem

Monique Letourneau, CFO Ambrilia