PharmaVentures and PharmaTelevision are delighted to be Media Partners at the World Stem Cells & Regenerative Medicine Congress 2015.

Dr Adrian Dawkes will be recording a series of interviews for PharmaTelevision with key people attending what looks to be a very exciting event.

A decade on and still strong: London celebrates the 10^th anniversary of World Stem Cells & Regenerative Medicine Congress.

2005. What a year!

London was overjoyed at being elected as host city for the 2012 Olympics, but also devastated by the July 7th terror attacks. The death of Pope John Paul II, that same year, marked the end of an era in the life of the Roman-Catholic Church whilst in Germany, Angela Merkel becomes their first female Chancellor. 2005 also played host to Hurricane Katrina in the United States when it flooded New Orleans, the launch of YouTube and it is where Terrapinn’s stem cell story starts.

A decade later and it is a delight to be celebrating the 10th anniversary of an event that was key to the foundations of this medical revolution.

“10 years ago when we launched the World Stem Cells Congress, the stem cells sector was one of scientific interest. Focussing on the challenges of how to transform the cells, this conference and exhibition was quite small and the topic area quite niche. Attracting only around 80 people, word of the industry’s potential had not yet reached the masses”, says Derek Cavanagh, Project Manager of World Stem Cells & Regenerative Medicine Congress 2015. He goes on to speak about how in about 2010 the sector underwent an important transition. Key industrial players as well as leading pharma companies had come to realise the commercial opportunities with stem cells, which would change the sector moving forward. 

This in turn was when the event would shift in focus from solely science to incorporate the commercial aspects as well. Both translational medicine and regenerative medicine were added to the conference programme, and an emphasis on achieving market access was enabling successful commercial development within the industry. As industry challenges shifted towards lack of investment and scaling up manufacturing and distribution, discussions moved on to the new business models that were coming into practice as the stem cell sector developed and moved away from traditional pharma models, which would inevitably catapult the industry to where we are now.

What is now the World Stem Cells & Regenerative Medicine Congress is proud to be welcoming an audience of around 600 attendees to London this May. “This year we will be introducing additional content on tissue engineering and organ regeneration as well as the collocated Investor Forum and Cord Blood World Europe. Delegates will be able to hear and learn from over 70 speakers across the 3 days as well as partake in hundreds of meetings on-site as collaborations become key to commercial success of the industry” explains Hannah Yates, Conference Manager, World Stem Cells & Regenerative Medicine Congress 2015.

With a large volume of business generated over the years at this event, key industry supporters such as Cell Therapy Catapult, GE Healthcare and Lonza, and leading keynote presentations from the likes of Chris Mason, Perry Karsen, Keith Thompson, Michael May and Susan Solomon, World Stem Cells & Regenerative Medicine Congress is where the cell therapy and regenerative medicine sectors come to do business.

For more information, see the brochure at terrapinn.com /StemCellsBrochure

Event information:

10th Annual World Stem Cells & Regenerative Medicine Congress 2015

20 – 22 May 2015

Business Design Centre, London, UK

The debate and discussions in the media on the attempted bid by Pfizer for AstraZeneca (AZ) have largely revolved around the short term impact on jobs in the UK as well as the rights of shareholders and how corporations exploit tax loop holes.

The real question is how we as a society can actually find the drugs that are desperately needed for many incurable diseases? The Pfizer bid for AZ is only a symptom [no pun intended] of the continuous reconfiguring and restructuring of how pharmaceutical R&D can be performed so that we can efficiently find these cures.

How drugs are selected and finally make it to market is determined, quite correctly, through the scrutiny of the regulatory authorities such as the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA). There is an inherent risk in taking a drug through clinical trials and less that 10% of drugs entering human clinical trials will make it to the patient. So how can companies reduce this risk and increase the chances of success?

Pharmaceutical companies have been grappling with the ‘how’ for the past two decades. Further more in recent years the landscape has been changing, for example, the regulatory hurdles, quite correctly, have been raised so the chances of finding the ‘right’ drug are lower and so more difficult. Both the pricing and reimbursement (P&R) of drugs place additional hurdles and additional risk on whether drug actually gets to the patient. In the UK P&R is regulated through the UK’s Department of Health via the Pharmaceutical Price Regulation Scheme (PPRS) and the National Institutes of Care Excellence (NICE) respectively. This changed landscape has meant that pharmaceutical companies have had to rethink how they do research. The concept of large companies doing all their own drug research has been on the wane for years. Great ideas cannot emerge in one place they happen everywhere and there is evidence that smaller R&D groups are more productive than large ones. As such pharmaceutical companies have become more dependent on external R&D provided by universities, charities and venture capital backed biotechnology (biotech) companies. Moreover, pharma companies have been refocusing their efforts to a smaller group of therapeutic areas with the greatest unmet clinical need. For the past five years all major pharmaceutical companies have been reducing their internal R&D efforts and this, by the way, independent of the world economy.

Furthermore pharmaceutical companies have been moving their R&D activities to locations with the highest research skills, these include Cambridge, Mass, and Cambridge, England. This has meant moving away from ‘remote’ R&D sites which originated as manufacturing sites, such as AstraZeneca closing its Cheshire, Alderley Park site and moving to Cambridge and Pfizer moving away from Sandwich in Kent. Most of the large pharmaceutical companies have done similar moves.

This changed landscape means that pharmaceutical companies have had to raise the scrutiny of their existing drug candidates and abandon more of them. To replace them they need to either find more candidates from biotechs or acquire them through acquisitions like Pfizer’s bid for AZ or through deals such as Novartis acquiring GSK’s oncology franchise.

In the end a key driver is a focus on building the strongest product pipeline. Simply put companies can strengthen their pipeline through acquisition by keeping the best of the combined businesses and spinning out or axing the weaker candidates.  Regardless of whether Pfizer acquires AZ or not, the change in ‘how’ R&D is done will lead to further rationalisation of R&D and a greater role for biotech to be the key innovators and, as such, we should see a further rise in M&A as well as licensing and partnerships. 

Today the talking point, of course, is the bid by Pfizer for AstraZeneca (AZ)  and whether this is good or bad for pharmaceutical companies, biotechs, R&D, employees, jobs and patients. One thing is for sure and that is the concept that pharma mega-mergers are a thing of the past has just been blown to pieces! So why should we see the return of the pharma mega-merger, what are the drivers and its implications?

My view is that this bid is just an elaborate extension of what pharma has been doing for the past five years, buying biotech companies and their assets to boost their pipelines. AstraZeneca’s patent cliff meant that it’s real value remains in it’s R&D. As I said in Saturday’s FT (3rd May 2014) “The environment has changed. The reasons ‘megamergers’ happened before are different from today. Pfizer’s bid for Warner Lambert was for a product already on the market. This time it is about access to the R&D pipeline.” 

The public financial markets tend to put lots of emphasis on earnings to the valuation of companies and little emphasis on their R&D pipeline. Pfizer’s move enables a strategic buyer, who wants to boost their R&D pipeline, an opportunity to acquire an undervalued publicly quoted company with a strong but undervalued R&D pipeline. AZ recognises this and has used the more conjectural based expected net present value (eNPV) valuation method to argue for a higher price, which at the time of writing appears to be working.

Yes, Pfizer will use its ‘off-shore’ cash pile to do the acquisition but that is just an extremely cheap source of capital to allow it to pay more for AZ. It is an extremely tax efficient use of that cash pile and it enables Pfizer to take the some additional risk on the acquisition. Although 68% of the last rejected offer was in the form of stock Pfizer is under pressure to move the cash component up so that AZ shareholders get more cash for their shares.

So what is the impact on other pharma companies and their employees? Well, as I write every major pharma company board has met or is about to meet to discuss their place in this new landscape and their own fate. If AZ is acquired the shape of the competitor landscape will have changed dramatically and they will feel that they have to respond. They are not going to sit there and ignore it, are they? So the next step will be a wave of mega-mergers probably reducing the number of large players up to one half their number in the next five years. A key driver will be a focus on building the strongest pipeline. Simply put, you can strengthen your pipeline through acquisition by keeping the best of the combined businesses and spinning out or axing the weaker candidates. Underlying this driver is the current definition of a weak drug candidate as this has changed dramatically as pharma has realised that clinical efficacy is simply not good enough. Pricing and reimbursement (P&R) and emergence of tougher bodies to regulate P&R have emerged to expose weak drug candidates in their existing pipelines.

Inevitably some of these mergers will be successful some not so successful. Rationalisation will mean that another wave of job losses will occur.

What will the impact be on the sector itself? I believe this will lead to further rationalisation of manufacturing and R&D and a greater role of out-sourcing to contractors. A trend that has been happening for some time and where we have had considerable experience. Indeed, one of our major pharma clients, where we acted as advisors, has just two days ago successfully sold one of its US manufacturing facilities to a US-based CMO. Pharma will continue to rely on biotech to be the key innovators and we should see a further rise in licensing and partnerships.

What about jobs? Some jobs will be lost forever. Individuals affected will either leave the sector completely, become entrepreneurs in new ventures or find jobs in the successful expanding parts of the sector, including in the stronger merged pharma companies.

Last, and by no means least, what about patients? In the end patients need access to drug therapies that are both effective and affordable. Both of these two elements are out of their control, they are dependent on a strong buoyant biotech sector to discover them, efficient well-capitalised pharmaceutical companies to take the risk to develop and commercialise them, and a private and public payer sector willing to pay for them.