BiotechnologyFrom Idea to Market

Edited by

Fred Mermelstein, Richard Prince

and Carl Novina

PDABethesda, MD, USA

DHI Publishing, LLCRiver Grove, IL, USA

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ISBN: 978-1-942911-37-1Copyright © 2019 Fred Mermelstein, Richard Prince and Carl NovinaAll rights reserved.

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CONTENTS

Foreword xvPhillip A. Sharp

Introduction xixFred Mermelstein, Richard Prince and Carl Novina

Acknowledgements xxv

Editors xxix

Contributors xxxiii

SECTION 1 DUE DILIGENCE

1 FIRST PRINCIPLES OF R&D–THE ROLE OF DUE DILIGENCE 3Fred MermelsteinUnmet Medical Need 4Intellectual Property: Exclusivity and Freedom to Operate 11Pricing and Reimbursement 22

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Additional Elements of Due Diligence 27FDA Regulatory Process 33Manufacturing 35Financial 37The Management Team 40What Due Diligence Can’t Uncover 41Conclusion 41References 42About the Author 43

2 TRANSLATIONAL RESEARCH IN ACADEMIA– MOVINGTOWARDSTHE D SIDE OF R&D 45Carl D. NovinaIntroduction:An Integrated Approach to Basic and

Translational Research 45Why Participate in Translational Research? 48How to Integrate Basic and Translational Research 56Academic Institutional Support for Translational

Research Programs 71Conclusion 78References 79About the Author 83

3 THETARGET PRODUCT PROFILE SHEET–AN INVALUABLETOOL IN R&D PLANNING 85Shani C. Missner and Matthew R. WeinbergIntroduction 85Purpose of a TPP 86The TPP Process 86Regulatory Outlook 88Benefits of a TPP 89The Use of a TPP Early in Drug Development 90Defining the Regulatory Value of a TPP 90Quality Target Product Profile 91The Strategic Evaluation Framework 92Go/No-Go in the Strategic Evaluation Framework 95TPP Scenarios 102Conclusion 102Appendix 1 Target Product Profile Template 103References 107About the Authors 110

Biotechnology From Idea to Marketiv

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4 FOUNDINGA BIOTECHNOLOGY COMPANY 111Alan CraneIntroduction 111The Biotechnology Company Birthing Process 112Key Success Factors 138References 145About the Author 146

5 MEDICAL DEVICES – FROM IDEATO MARKET 147John Butziger and Laurie BourgeoisIntroduction 147Regulatory Overview 149Selecting Partners for your Needs 152Partner Proposals 156A Note on Intellectual Property 157Quality Management System 157Document Control System 159Design Controls 160Program Phases 162Project Set-Up 164Hazard and Risk Analysis 166Device Design 167Design Verification Testing 171Design Validation Testing 175Regulatory Submittal 176Process Development 177Process Validation 181Production Transfer 185Production 186Contracts/Agreements 188References 190About the Authors 192

6 HOWTO COMPOSEA BUSINESS PLAN 195Douglas A. HamiltonIntroduction 195Start with the Table of Contents 198Sample Table of Contents for Biotechnology Company

Business Plan 198Executive Summary 200Company Overview 200

Contents v

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Research and Development Section 201Marketing Section 217Intellectual Property Section 231Manufacturing Plan Section 232Financial Strategy in Financial Information Section 236Management Section 248References 248About the Author 251

SECTION 2 FINANCING

7 CORPORATE COMMUNICATIONS –EXECUTIVE SUMMARIESAND PITCH DECKS 255Dian GrieselThe Investing Equation 257Here’s What an Investor is Seeking 257Refining Your Pitch 266Motivating Action 267Healthcare Company Questions 270Conclusion: Final Thoughts About Asking for the Money 277About the Author 279

8 FINANCING BIOTECHNOLOGY START-UPS–THE ROLE OFTHE LICENSED BROKERDEALER 281Jeff Eliot MargolisIntroduction 281Essentials 282Types of Financings 283Identifying Categories of Investors 287Finding and Qualifying Potential Investors 290Value of Strategic Transactions as Financing Vehicles and More 294Private versus Public Financings – Private versus

Public Companies 295Managing the Communications Process with Investors 297Conclusion 298References 298About the Author 298

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9 INDUSTRY PARTNERSHIPSAND LIQUIDITYEVENTS – ENGAGINGWITH BIG PHARMA 301David R. BoykoCorporate Partnering 302Liquidity Events 315References 325About the Author 327

SECTION 3 OPERATIONALIZATION

10 REGULATORY AFFAIRS’ ROLE INPRODUCT DEVELOPMENT 331David L. RosenIt’s the Law: The Why and the How 331Regulatory Affairs: The Architect, Interpreter

and Advocate 340The Big Pieces: You Can’t Get There Without Them 343Globalization: Don’t Leave Anything on the Table 349Ready to Launch: Preparing the Beachhead 354Maintenance:The Party is Just Getting Started 358References 361About the Author 366

11 CLINICAL TESTING OF BIOSIMILARS 369Sarfaraz K. NiaziIntroduction 369Overarching Guidance 371Clinical Pharmacology Studies 374Interchangeability 390Comparative Clinical Studies 396Case Studies 404Appendix 1 New Drug Discovery 409Appendix 2 Data From Completed Studies 421Appendix 3 Biosimilar Clinical Trials 423References 448About the Author 454

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12 SAFEGUARDING CLINICAL DEVELOPMENT 455– STRATEGICAND QUALITY CONSIDERATIONSRichard PrincePrinciple #1 – Corporate Governance and Executive Management 473Principle #2 – Science 475Principle #3 – Design 477Principle #4 – Measurement 481Principle #5 – Independence (As Part of Teamwork) 484Summary 485References 487About the Author 490

13 PERFORMING CLINICALTRIALS –THE ROLE OF CLINICAL OPERATIONS 491Cassandra Erato and Angela BartkusStarting Your Clinical Trial, Moving from Animals to Humans 491Early Stages of a Clinical Trial Program 491Clinical Trial Types 494What to Look for in a CRO for an Early Stage Trial 498Regulatory Considerations in a Phase 1 Trial 501Trial Lifecycle and Project Management 506The Importance of Data Automation 519References 519About the Authors 520

14 DESIGNINGAND BUILDINGABIOTECHNOLOGY FACILITY 523Kim NelsonIntroduction 523Quality Risk Management 526Project and Facility Design Risk Assessments 527cGMP Compliance 529Biosafety and Biocontainment 533ISPE Baseline® Guides 537Cleanroom HVAC Classifications 539Design and Operational Paradigms 541Concurrent versus Campaigned Multiproduct Operations 542Bioburden Control versus Aseptic Processing 544

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Process Closure: Closed Systems versus Open Processing 544Room Segregation versus Closed Systems 545Single-Use Technology versus Stainless Steel Equipment 547Minimizing Classified Environments and Placing Equipment

in Gray/Mechanical Spaces 553Corridor System and cGMP Flows: Unidirectional versus

Mono-Corridor 554Gowning Strategy 557Air-Locking Strategies 557Reliability and Redundancy of Electrical and Utility Systems 558Process Intensification 560Staging Space in Single-use Facilities 561Solid Waste Management in Single-use Systems Facilities 561Outsourcing versus Fully Integrated Biopharmaceutical

Operations 562Modular/“Podular” Construction Approaches 563Flexible and Agile Facilities 564Conclusion 565References 567About the Author 570

15 MANUFACTURING BIOPHARMACEUTICALS– FROM START-UPTO COMMERCIALIZATION 573JosephWaggett and Laura Grayson RoselliIntroduction 573Differences Between Drugs and Biologics 576Process Design/Development (Recombinant Protein

Biopharmaceuticals) 579QTTP and Identification of CQAs and CPPs 582Process Design and Process/Product Characterization

for a Biopharmaceutical Product 583Scale-up and Process Validation 583Commercial Manufacturing 589Cell Therapy, Gene Therapy and Personalized Medicines 598References 602Recommended Reading 604About the Authors 608

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16 QUALITY CONTROLTESTINGTHROUGHOUTTHE PRODUCTDEVELOPMENT LIFECYCLE 609Daniel Prince, MartellWinters and Richard PrinceResearch and Development Programs 613Early Stage Development 613Late Stage Development 615Commercial Testing 615Selecting a Contract Testing Organization 617Designing QC Testing Programs 623Test Method Qualification vs.Test Method Validation 627Test Method Qualification 628Test Method Verification 629Test Method Validation 630Test Article Categories 631Specialized Validation Testing 635The Lifecycle of Contracted Testing Services 637The Future of QC Laboratories 638References 638About the Authors 641

SECTION 4 LEGAL

17 FORMINGTHE ENTERPRISEANDRAISING CAPITAL 645Travis L. GeringIntroduction and General Caveats 645Choice of Entity 646Federal and State Laws Governing the Issuance of Securities 657Types of Securities 659Private Placements 662Exemptions from Securities Act Registration 663Securities Act Section 4(a)(2) 664Regulation D 668Regulation S 682Crowdfunding 682Regulation A+ 687Rule 701 Exemption for Employee Option Plans

and Incentive Plans 693

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Securities Act Rule 144 694Rule 144A Offerings 698Cryptocurrencies and Initial Coin Offerings 699Going Public 702The Integration Doctrine 710Intrastate Offering Exemptions: Rules 147 and 147A 711Brokers, Placement Agents and Underwriters 712Liability Considerations 720Special Considerations for Financing Cannabis Enterprises 727Conclusions 730About the Author 731

18 ESTABLISHING EFFECTIVE INTELLECTUALPROPERTY PROTECTION 733ChristineWillgoos, John P. Dillon and Jonathan S. CaplanIntroduction 733Patents and Patentability 736Trade Secrets 772Best Practices for a Biotechnology Company –

Policies and Procedures for Obtaining and ProtectingIntellectual Property 777

Conclusion 791Appendix A U.S. Patent 5,225,539 792References 805About the Authors 808

19 LICENSING TECHNOLOGY FROMACADEMIA AND GOVERNMENT 811Lita NelsenIntroduction: What Does the TTO Do? 812What you should Know as an Inventor 814Acquiring a License from a University:

For Biotech Founders and Investors 824Sponsoring Research at the University:

Important Terms of the Agreement 840Appendix 1 Exclusive Patent License Agreement 845Appendix 2 Sample University Agreement 879About the Author 891

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SECTION 5 COMMERCIALIZATION

20 UNDERSTANDING DRUG PRICINGAND REIMBURSEMENT 895Joshua P. CohenFourth Hurdle Challenges to Market Access 895Prescription Drug Supply Chain 896Pharmacy Benefit Managers 898Central Role of Rebates 902Government Program Special Discounts and Rebates 904Pricing of Branded Single Source Products 905Pricing of Competing Branded Products 907Markets for Generic Drugs and Biosimilars 908Pricing and Formulary Management of Outpatient

Versus Physician-Administered Drugs 909Pricing Determination and Transparency 910US Drug Prices in an International Context 911R&D’s Relationship to Price 912Disconnect Between Price and Value 912New Pricing Policy Initiatives 914Concluding Remarks 916References 917About the Author 920

21 GUIDANCETO PHARMACEUTICAL PRODUCTLAUNCHTIMELINESAND POST MARKETORGANIZATIONAL EXPANSION 921Charles Bell, Suzanne LoGalbo and Elise Fellner RothPharmaceutical Lifecycle Management 922Pre-launch Timeline Activities 922Expansion of the Business – Three Case Studies 925Conclusion 935About the Authors 935

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22 PORTFOLIO MANAGEMENT OFCORPORATEASSETS 937Douglas A. HamiltonWhat is Portfolio Management at Biopharmaceutical

Companies? 937Why do Companies Conduct Portfolio Management? 938When do Companies Typically Conduct Portfolio Analysis? 939What do Companies use Portfolio Management For? 940What Type of R&D Projects are Evaluated in

Portfolio Management? 941Overview of the Portfolio Management Process 942Asset Evaluation: R&D Assessment 943Probability Adjusted Present Value (PV) of R&D Cost

to Develop 946Asset Evaluation: Commercial Assessment 948Portfolio Analysis 954Conclusion 965References 965About the Author 966

GLOSSARY 969

INDEX 1021

Contents xiii

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