4 Biopharma Finance Execs Tackle Tough R&D Topics

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

It was 2015 when Life Science Leader put together its first annual outlook issue (published in December). However, it wasn’t until 2018 that we added an article involving finance experts. That year we had just one biopharma CFO (out of four total participants) take part. This year we had 10 finance experts, with 8 being biopharmaceutical company CFOs. We are excited about this, as CFOs play a key role in so many different biopharmaceutical company components, including R&D. Unfortunately, with so many participants, combined with print publication space limitations, no matter how hard you try, you can’t shoehorn in all the excellent wisdom that was shared. As a result, we have created a series of Beyond The Printed Page articles covering a variety of topics, and involving a number of different execs. While we hope you enjoy this latest installment, we also hope you will consider subscribing to Life Science Leader today, so you don’t miss out on all the incredibly interesting executives involved in our editorial throughout 2021 — and beyond.

HOW HAVE DEVELOPMENT TIMELINES BEEN IMPACTED BY COVID-19 SUPPLY CHAIN/CLINICAL TRIAL DISRUPTION? WHAT ARE YOU DOING TO PROACTIVELY MANAGE THE TIMING SLIPPAGE OF VALUATION INFLECTIONS POINTS AND ADJUST FINANCING STRATEGIES DEPENDENT ON ACHIEVING DE-RISKING EVENTS TO REDUCE CAPITAL COSTS?

ROGER SAWHNEY, CFO, OMEGA THERAPEUTICS: At Omega, we’re largely doing preclinical work based on animal and humanized models, which have not been delayed as they are not dependent on site-based/in-person interaction.

Fundraising in the market is very strong due to the fact that the industry has responded so well to COVID-19 (along with fewer attractive opportunities for investors in general). As such, there has been increasing competition to get development work done. Clinical-stage companies are seeing impacts on timelines, especially in the cardiovascular, neuroscience, immunology, and respiratory spaces. While investors are largely tolerant of these delays, there still exist resource constraints around budgets, burn rates, and spending capacity that will manifest.

One of the things we have done proactively at Omega is reprioritizing our portfolio to focus on programs with the greatest likelihood of success and value creation, moving quickly on high-priority programs and temporarily delaying certain milestones and activities around programs that we know can tolerate the short-term delay.

It’s also a good time to raise public or private financing. We’ve seen several companies tap into secondaries and find additional investments over the last few months to shore up their balance sheets and increase the size of their war chest.

GIVEN THE OUTSIZED CONCENTRATION OF NDAs IN ORPHAN AND ONCOLOGY INDICATIONS, WHAT NEEDS TO BE DONE TO ENCOURAGE THE ALLOCATION OF RESOURCES TO DEVELOP AND COMMERCIALIZE DRUGS FOR COMMON CHRONIC DISEASES FOR THE FUTURE?

JOHN HAMILL, CFO, WINDTREE THERAPEUTICS

I’m not a believer in bigger is better. However, government entities can play a significant role in providing incentives to companies to ensure treatments for common chronic diseases aren’t overlooked. I believe companies have a moral responsibility to not ignore these opportunities. That doesn’t mean companies need to pursue everything. They should, however, allow for others to pursue and develop the opportunity, while being compensated down the road. Conversely, organizations need to be dis-incentivized on shelving a potential product for economic reasons if there is the potential to improve the quality of life or cure a patient population that might be suffering.

EMILY HILL, CFO, PTC THERAPEUTICS: One way to encourage the allocation of resources to develop and commercialize drugs for common chronic diseases is by looking at cellular pathways and the cause and origination of a disorder, instead of looking at diseases specifically by just the symptoms. For example, the oncology environment evolved from being very indication-specific to more based on genetics or mechanism (like angiogenesis or HER2). There are many diseases outside of oncology that have potential for a similar approach. Overall, it is important to look at the molecular function and how the repair of that molecular function or genetics can address an umbrella of diseases, versus just looking at specific indications.

JANE HOBSON, PARTNER, BAKER MCKENZIE

Most of the encouragement should come via government financial and regulatory incentives. Treatment of chronic diseases are a tremendous cost for public health systems, and governments recognize the need for more and better therapeutics to help rein in costs. Financial incentives will motivate companies to allocate the significant resources necessary to develop and commercialize these drugs. In addition, it is critically important for regulatory authorities to continue greater acceptance of virtual clinical trials, as well as the role Big Data and AI play within. Such acceptance of technology should allow new products to enter the market more rapidly as part of fast-track approval processes, while also bringing down R&D costs. But not all of this should rest on governments. Companies should consider the advantages of strategic partnerships with complimentary organizations. We are advising clients on a rapidly increasing number of collaborations and licensing deals that provide an opportunity to share the risks and costs of product-focused development. Supply chains for chronic disease pharmaceuticals should be revisited and analyzed carefully to take advantage of digital advances, local manufacturing, and local ingredients, all of which may reduce costs and increase efficiency for a more sustainable supply chain.

COVID-19

WHAT ARE YOUR THOUGHTS FOR COMPANIES WITH LIMITED RESOURCES TO PURSUE COVID-19 INITIATIVES/INDICATIONS?

ROGER SAWHNEY, CFO, OMEGA THERAPEUTICS: Innovation around novel medicines for COVID-19 is still a relatively early endeavor, as most activity has been in repurposing old drugs. Even with a vaccine, numerous unmet needs will exist (loss of immunity, anti-vaxers, etc.), so effective treatments will be needed. For biotech companies interested in developing a therapeutic approach to COVID-19, there is a clear and strong potential for innovation and treatments, and it is still an attractive opportunity.

In terms of succeeding with limited resources, partnering with a Big Pharma with resources invested in infectious diseases, or already developing a vaccine, could make a lot of sense. Big Pharma has clearly demonstrated a focus on the virus, has tremendous resources, and are willing to bring those to bear in a partnership/collaboration. As this is a public health initiative, there are significant government funds also available. Leveraging those funds as more of a public-private partnership could be impactful for all parties. That said, it would be prudent to weigh the risk/reward potential of therapeutic development. If the vaccines currently under development prove highly effective and achieve high adoption, with herd immunity, opportunities that were once exciting to go after may have since closed.