THE LIFE SCIENCES REPORT - Wilson Sonsini
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SUMMER 2020
THE LIFE SCIENCES REPORT
10 Reasons Why Health A Conversation with Matthew J. Meyer,
Care Start-Ups Fail Chief Client Corporate Development
By Paul Grand and Kathryn Zavala, Officer at Wilson Sonsini
MedTech Innovator
In our roles at MedTech Innovator, a Attorneys Vern Norviel and Charles impressed by its
global accelerator for medtech start-ups, Andres recently sat down with Wilson capabilities to
we’ve worked with thousands of early- Sonsini Chief Client Corporate efficiently support
stage health care companies in cities Development Officer Matthew J. Meyer the needs of small
around the world. We’re proud to play a to discuss his role at the firm. With companies with
role in helping new companies get their broad experience in a variety of senior top-tier legal
innovative technologies to the patients management positions within the life counsel. The
who need them. sciences sector, Matt has a successful company, VC-
track record of leading companies. He backed RxCentric,
But we’ve seen a lot of failed efforts, too. supports the firm’s clients by providing was sold to Allscripts and was based in
insights and practical strategic business New York. While the firm didn’t have
advice, developing and implementing an office in the city at the time, the
Continued on page 3... partnering or other transactional attorneys bridged the geographic gap
strategies to accelerate growth, seamlessly and provided creative and
counseling clients on optimizing their business-minded legal advice.
In This Issue business models, and supporting their
When senior members of Wilson
fundraising efforts.
Sonsini’s corporate and IP life sciences
A Conversation with A licensed attorney, Matt spent the first practice pitched me on the idea of
Matthew J. Meyer............. Pages 1-2 half-decade of his career as a corporate joining the firm and building out a
10 Reasons Why Health Care transactional lawyer with Pfizer in business advisory practice, such a
Start-Ups Fail................ Pages 1, 3-4 New York before transitioning into creative idea didn’t surprise me. It was
Clients on the Front Lines of the business and general counsel positions the firm being true to one of its values:
COVID-19 Pandemic....... Pages 5-6 with public and private companies in supporting innovation. I saw the posting
Europe and the U.S. He has served on as an opportunity to work with top-
FDA Issues MAPP on
the management teams of four start- tier, creative, and business-minded
Conversion of ANDA Approval
to Tentative Approval..... Pages 7-8 ups in the biotech, diagnostics, and attorneys to build out a novel, highly
digital health sectors, and helped these differentiated, yet complementary facet
Life Sciences Venture
companies raise private and public of the firm to assist its life sciences
Financings for Wilson Sonsini
capital, develop and execute successful clients in need of more dedicated
Clients.............................. Pages 9-10
partnerships, and exit through IPOs or business support.
An Interview with Ryan Phelan: acquisitions. Matt joined the firm in June
Using Biotechnology to Revive Could you describe the business
2019 and is based in the San Francisco
Endangered Species and Restore advisory practice and its benefit to
Damaged Ecosystems... Pages 11-14 office.
clients?
Life Sciences Innovation Culture Why did you join Wilson Sonsini?
and Deconstruction..... Pages 15-16 In a nutshell, the practice is designed
Select Life Sciences Client Matt: Wilson Sonsini was outside to provide practical business counsel
Highlights...................... Pages 17-20 counsel to my first start-up in the digital based on real-world perspectives and
health sector in the early 2000s. From experience to enable clients to be
my first interactions with the firm, I was successful with their business objectives.
Continued on page 2...
SUMMER 2020
THE LIFE SCIENCES REPORT
A Conversation with Matthew J. Meyer . . . (Continued from page 1)
Whether it’s helping develop a winning ensure a higher likelihood of success result, many life sciences sectors remain
pitch for a venture capital fundraising when interfacing with and ultimately relatively healthy, especially more
or reviewing a company’s platform hoping to transact with the bigger ones. established companies that are either
technology to assess where it may be public or planning to go public. In fact,
best out-licensed, our group attempts to Can you share some examples of how IPO activity in the life sciences industry
provide specific insights and guidance. you’ve been able to help companies has been relatively healthy since March.
Because this counsel is typically with their business needs? With that said, many venture investors
delivered alongside my legal colleagues, are taking a more cautious approach.
One of the nice aspects of my practice
there is a natural synergy that can
is that I work with a diversity of highly What general advice would you give
streamline transactions. For example, if I
talented scientists and business people to companies seeking funding in this
am helping a company with the business
across a broad range of companies, each unusual economic environment?
aspects of its fundraising, it’s easy for me
of which has different needs.
to interface with the corporate legal folks
First, remember that most fundraising
who may be handing the IP diligence On the commercial strategy side, for processes are challenging and it is the
or negotiating the definitive investment
example, I developed a go-to-market exception and not the rule for companies
agreement.
plan for a private company in the to get funded quickly and at their desired
What is the geographic scope of the transfusion medicine sector with a novel valuations, even in a strong market.
practice? business model to address the increasing Second, be thoughtful about your ask
shortages of blood components now and consider raising only what you
Consistent with the broad reach of the facing the U.S. As a result, the client absolutely need to get to the next critical
firm, it’s national and in some instances was able to establish a compelling value milestone for your business. Investors
international, as we are working with proposition to the hospital system, one should appreciate this, and you may
companies in the UK, Germany, and that ultimately attracted some of the not have the luxury of raising as much
Asia. major academic medical centers across as you originally desired. Finally, now
the country. This led to the signing of its more than ever, your pitch and value
How does your background set you up first commercial contract. proposition should be crystal clear.
for success in your exciting new role? Specifically, be sure you set out in the
On the therapeutics front, I worked first minutes of your pitch why your
As mentioned, I have had a varied and with a group of founders to develop product or technology will address a
unusual career to date, in which I’ve and execute a strategy to out-license critical unmet need, how it’s different
worked for a wide range of companies in an oncology treatment platform from from the rest, and how it will make
the U.S. and Europe. My goal is to bring a major academic medical center. Part money for the investor.
my learnings to the business advisory of the effort involved developing a
practice. I started as a corporate attorney compelling business plan to convince How do you see your position
with one of the largest corporations the institution that the company would evolving?
in the world, Pfizer, where I gained have the capabilities to succeed, as well
valuable insights into how a big as managing the licensing process and If we are successful, this practice will
company operates and “thinks,” while structuring the company’s operating help our clients be successful with
also gaining a good understanding of plan. In this role, I worked closely business challenges. I’m pleased to report
how the pharmaceutical industry works. that in the short time since my practice
with my corporate, IP, and licensing
Thereafter, my tenure on management started here, we are seeing examples
colleagues, all of whom were critical to
teams at both very small, more emerging of that, some of which I’ve mentioned.
the company’s success.
growth private companies and public If this continues, I expect the practice
companies taught me a lot about how How has funding changed in the to grow steadily with the addition of
these companies grow, establish, and current COVID landscape? other business professionals to support
evolve their cultures and tackle the the growth in client demand. These
myriad challenges—both expected and The pandemic is further highlighting additions will likely be based in strategic
unexpected—that come their way on the critical role that therapies, vaccines, life sciences hubs across the country,
a nearly daily basis. As importantly, I and diagnostics play in our society. including the Northeast, to complement
gained a lot of insight around how big Ultimately, I believe a combination of my home base in San Francisco.
companies like Pfizer view their smaller these are what will allow our global
industry peers, and learned how and society to more fully emerge from this Matt Meyer may be reached at
what small companies should do to unprecedented healthcare crisis. As a (415) 947-2097 or mjmeyer@wsgr.com.
2
SUMMER 2020
THE LIFE SCIENCES REPORT
10 Reasons Why Health Care Start-Ups Fail (Continued from page 1)
Grounded in science and regulated by the focusing just on what is needed for the Staying in Stealth Too Long
government, health care is a challenging next milestone. This is a common and
sector. In the life of any start-up, there costly error that can significantly delay To be successful, a company needs to be
are plenty of opportunities for missteps. time to success. talking to investors, customers, health
And pivoting isn’t as easy as it is for care providers, patients, and potential
companies developing tech solutions, Far too many start-ups succeed in acquirers early and often. Stakeholder
like a photo-sharing app. Mistakes in a achieving a regulatory milestone input is needed early to avoid mistakes
health care start-up can be fatal. but then run out of funding before that can kill a company down the road.
generating sufficient evidence to
But that doesn’t mean your company has Staying off the radar also carries exit
convince customers to buy their
to make one. risks. Acquisitions tend to happen in
products. To avoid this, start
groups, because larger companies are
conversations early with all relevant
Knowing the most frequent mistakes is competitive. If a rival buys a certain
stakeholders about what data they will
the first step to avoiding them. With that technology, a large player, such as a
require. Also consider the Food and
in mind, here are 10 of the most common public company, might want to acquire
Drug Administration’s innovative Payor
problems we’ve seen that can cause a something similar—and soon. They track
Communication Task Force, which
health care start-up to fail and some tips and build relationships with companies
involves public and private payers such
to solve them. in their landscapes of interest, and when
as Medicare and Medicaid, private health
there is urgency, they move quickly. A
Failure to Properly Articulate Your plans, health technology assessment
company that is in stealth mode too
Value Proposition groups, and others in the pre-submission
long could easily miss the window of
process as well as parallel review with
opportunity.
The value proposition is the new elevator the Centers for Medicare and Medicaid
pitch. Too many companies in health Services to potentially shorten the time As soon as your intellectual property
care describe themselves as “better, between FDA approval or clearance and is protected, start talking to the
faster, cheaper” than what’s already on coverage decisions. relevant stakeholders. Delaying these
the market, and their pitch ends there. conversations is the one mistake that can
It’s never too early to have these lead to many of the other mistakes on
But that isn’t enough. How is your conversations. this list.
solution better? How much faster? How
much cheaper than the standard of care? Choosing the Wrong CEO Thinking the Direct-to-Consumer
You must be prepared to communicate Model Will Make Life Easier
The CEO is the face of a company, so
your unique value proposition from
it’s critically important to have the right Many health care start-ups develop a
all angles, and you need to understand
person in this role. Investors know that strategy that will let them sell straight to
the health care economics for each
start-ups need the right CEO at the consumers so they can skip regulatory
stakeholder. Take the time early on to
right time. It’s OK to have a somewhat approval, which can be time consuming,
define the standard of care for each of
inexperienced founder as a CEO, as long labor intensive, and expensive. Angel
your possible stakeholders and then
as she or he has the general qualities that investors with small pockets tend to
quantitatively explain how your product
investors respect. favor this strategy. The problem is
improves upon it.
that this relies on the often-flawed
Not Having an End-to-End Evidence Common ways to tell if you need
assumption that consumers are willing
Generation Strategy to replace the CEO—even with an
to pay out of pocket for health-related
acting CEO—include overconfidence,
products and services.
Health care companies are required dismissiveness, arrogance, and a lack of
to amass specific evidence and data to transparency about important details. Beyond the super-early adopters, though,
achieve key milestones such as raising If your CEO checks any of those boxes, consumers want their health plans to
capital, obtaining regulatory clearance now is the time to make that change, pay. As a result, consumer health start-
or approval, and obtaining insurance because investors back people, not ups often wind up pivoting to pursue a
reimbursement or payment. A common technology. You might also consider if regulated device strategy, but many run
mistake is thinking about evidence it’s possible that your current CEO would out of cash before they get there. Do your
generation in a linear manner and be more effective in a different position. homework on this one, and come to an
Continued on page 4...
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SUMMER 2020
THE LIFE SCIENCES REPORT
10 Reasons Why Health Care Start-Ups Fail (Continued from page 3)
informed decision on whether your start- Misunderstanding the Payment and allocate the right amount of effort and be
up will do better as a regulated product. Reimbursement Dynamic choosy about your pilot partners.
Choosing the Wrong Initial Indication It’s important to know who will be Staying in Your Echo Chamber
paying for the product and to know how
We regularly see start-ups whose much of the reimbursement will go to A start-up’s goal should be to create a
technology has multiple potential it. Misunderstanding the complicated new advancement that will help people
indications. They typically choose the economics of payment is a deadly and all over the world, not just those in the
initial indication based on the one easy one to make. company’s inner circle. That’s why input
the company founder knows the most from leaders and stakeholders who
about—a founder who is a liver cancer All too often, we hear people pitch us are outside the ecosystem is essential.
surgeon, for example, choosing liver a product and assume they will be able Relying entirely on local key opinion
cancer over breast cancer. But this isn’t to get the full amount of the payment leaders and the immediate networks of
always the right call, and the evidence for the relevant reimbursement code(s). the company’s founders risks making
generated in the wrong initial indication But it’s usually more likely that one- wrong assumptions about the need and
can drain resources before you have time third of the reimbursement will go to potential uses for the technology.
to pivot. the product. Pricing a product without
Local support systems also tend to
doing the necessary homework on the
To find the best indication, do a value give plenty of applause and pats on the
cost of goods and the reimbursement and
proposition analysis on all possible back, but avoid giving start-ups honest
payment dynamic can doom a company
indications and choose the one that’s feedback for fear. Get on the road, get out
to failure. There are no shortcuts when it
the most compelling in terms of market of the echo chamber, and solicit honest
comes to understanding the economics
size, competitive landscape, and patient input from as broad an ecosystem as
of providers, payers, and other
adoption. These should inform the possible.
customers.
decision on which indication to initially
pursue. Developing medical advancements is
Putting Too Much Money and Effort
a time- and labor-intensive process.
into Pilot Programs
Product Doesn’t Fit into Existing Making the wrong call can mean long
Workflows Pilot programs are important for delays and escalating costs. But just
early-stage companies, but there’s no because many companies make mistakes
Can you disrupt an industry without doesn’t mean yours has to.
guarantee that any given pilot will
disrupting people who have important
turn into a commercially profitable
work to do? This is a vital question. There are no shortcuts, and there’s
relationship. It is woefully common to
You may think your technology will be no substitute for buckling down and
underestimate the amount of effort it will
adopted because of the potential for learning as much as you can about
take to achieve a successful pilot. For a
improved patient outcomes or lowering your market, your competition, and the
start-up with a handful of employees,
overall costs, but if it adds steps or needs of your customers and potential
even a single pilot can take up the
changes a procedure, you’re interrupting acquirers.
attention of the entire team.
people—and they don’t like that.
Paul Grand is the founder and CEO
That’s why it is important for companies
New technology should fit as seamlessly of MedTech Innovator (https://
to put the right amount of resources into
as possible into existing workflows, not medtechinnovator.org), a nonprofit global
these programs, but not go overboard
delay or interrupt them. competition and accelerator for medical
on them. A key way to know how much device, digital health, and diagnostic
That’s why it is essential to learn every time, effort, and money to expend is to companies. Kathryn Zavala is the
step and every aspect of a customer’s discuss the terms of a post-pilot contract company’s vice president for operations and
workflow and every person who will be with a potential customer. To help a pilot business development. Together they have
affected by it. A surgeon might love your generate traction and revenue, ask the evaluated more than 12,000 start-ups.
technology, but if it adds too much work testers what key performance indicators Contact Paul at paul@medtechinnovator.
for nurses or technicians, an adoption they will use when evaluating whether to org and Kathryn at kathryn@
hurdle looms. Conduct discovery, convert a pilot to a contract. Also ask for medtechinnovator.org.
focus groups, and user testing with statistics on how many of the customer’s
everyone in the workflow and in as many past pilots resulted in contracts. Getting This article originally appeared in
environments as possible. answers to these questions will help you STAT News.
4
SUMMER 2020
THE LIFE SCIENCES REPORT
Wilson Sonsini Clients on the Front Lines
of the COVID-19 Pandemic
We at Wilson Sonsini have never raised $15 million in a Series • ChromaCode, Inc., a company
been more proud of our work with C financing round to support redefining molecular testing
innovative life sciences companies, ongoing clinical trials in patients through data science, announced
many of which are currently working with COVID-19 pneumonia and a $10 million Series C extension
to address challenges associated with commercial manufacturing of with an investment from Adjuvant
COVID-19. There are examples from Auxora, the company’s lead drug Capital, which brings the company’s
numerous sectors—including biotech, candidate. The firm represented total Series C funding to $38
digital health, medical devices, and CalciMedica in the transaction. million. Funding from the round
pharmaceuticals—from companies will support global expansion
developing and testing treatments and In addition, the firm helped and continued development of
prospective vaccines to those involved CalciMedica earn FDA approval to ChromaCode’s high-definition PCR
in manufacturing personal protective continue to study the use of Auxora platform (HDPCR™), through which
equipment, medical supplies, or other in patients with severe COVID-19 the company recently launched a
key components needed to care for those pneumonia who are at risk for high-throughput SARS-CoV-2 Assay.
experiencing illness. progression of acute respiratory The firm represented ChromaCode
distress syndrome. Our team was in the transaction.
Below is a sampling of recent COVID-19- also instrumental in obtaining FDA
related client activity in which our firm approval of the Investigational New • CorVent Medical, a Coridea
has been involved: Drug application. portfolio company, announced
the closing of a $4.5 million seed
• Atossa Therapeutics announced • A group of companies has joined financing round to support the
two programs to develop therapies forces in the war on COVID-19 commercialization of the first
for the treatment of COVID-19: to form The Canadian COVID single-use, critical care ventilator
one called the COVID-19 HOPE Coalition. The Coalition has that will enable rapid and affordable
Program, which uses a novel volunteered its time and resources deployment with superior infection
combination of drugs for severely to identify the nanobodies—special control. The funds will be used to
ill patients to improve lung antibodies found only in llamas and finalize regulatory filings under the
function and reduce the amount sharks—that are activated in the FDA’s Emergency Use Authorization
of time that COVID-19 patients immune response against COVID-19. Act, to upon approval launch the
are on ventilators, and another for With initial testing complete, the CorVent™ Single-Use Ventilator,
at-home treatment immediately Coalition plans to publish its first and to support future development
following diagnosis of COVID-19 results shortly, with additional of next-generation lifesaving devices
to proactively reduce symptoms of results to follow. The publications for respiratory insufficiency. The
COVID-19 and to slow the infection will be provided publicly in a unique firm represented CorVent Medical in
rate, enabling that person’s immune “open source biology” model to the transaction.
system to more effectively fight the allow researchers from around the
virus. The firm is patent counsel world to quickly access the data for • The firm is working on a number
to Atossa and is working with the research purposes. The Coalition of matters for Curative, a company
company on the IP strategy to cover is committed to ensuring that that was founded earlier this year to
its COVID technologies. treatments or tests stemming from develop tests for sepsis. In March,
their research can reach financially Curative pivoted to COVID-19 to
• CalciMedica Inc., a clinical-stage vulnerable populations. The firm is address the urgent need for test
biotechnology company targeting advising the Coalition on IP strategy development and production in
calcium release-activated calcium to ensure that the resulting products the U.S. The company developed
(CRAC) channels for the treatment are accessible to all countries around a simple oral fluid swab test
of acute and severe inflammatory the world. that is self-administered by the
diseases, announced that it has patient, eliminating the need for
Continued on page 6...
5
SUMMER 2020
THE LIFE SCIENCES REPORT
Wilson Sonsini Clients on the Front Lines of the COVID-19 Pandemic (Continued from page 5)
PPE or a healthcare worker. Their drafting and negotiating commercial getting it to healthcare providers
testing capabilities allow them to agreements with employers and and consumers as soon as possible.
receive swabs and return results in other third parties to help those The two companies hope to
about 24 hours. The company has parties provide access to the at- begin seeking an Emergency Use
processed 650,000 tests to date and home tests for their employees using Authorization from the FDA for the
is averaging 25,000 tests per day. Everlywell’s platform. test by the end of the year. The firm
Curative is operating out of its CLIA- assisted Mammoth Biosciences in
certified facilities in Los Angeles • Gauss Surgical, a leading developer the transaction.
and Washington, D.C., to process its of digital decision-support tools for
FDA-authorized tests. the medical frontlines, partnered • Octant, a synthetic biology drug
with Evive, a leader in enterprise discovery company designing small-
• Everlywell, a digital health communications and benefits molecule, multi-target drug leads for
company that offers access to engagement, to launch Apollo, a multifactorial diseases, announced
at-home collection lab tests free Apple iOS and web app to help that it has raised $30 million in a
for cholesterol, diabetes, STIs, increase the safety and efficiency Series A financing led by Andreessen
hormones, and more, received of drive-through COVID-19 Horowitz. Octant is using the
an Emergency Use Authorization screening and testing for patients proceeds to further develop its
(EUA) from the FDA for a COVID-19 and health workers. The app will discovery platform, which targets
at-home collection kit. Everlywell’s also facilitate Stanford Medicine’s large numbers of G protein-coupled
EUA is the first to be issued to a Apollo COVID-19 Screening Survey. receptors (GPCRs) and their
digital health company such as The firm represented Gauss in the downstream signaling pathways
Everlywell, which connects people transaction. to engineer drugs to treat complex
and organizations with laboratory diseases. The company is responding
testing and is not a laboratory • Just weeks after Mammoth to the global call for collaboration
or diagnostics manufacturer. It Biosciences announced that by open sourcing part of its platform
is also the only EUA for at-home its proprietary CRISPR-based under the Open COVID Pledge for
collection COVID-19 testing that diagnostics test for COVID-19 had use in the COVID-19 pandemic. The
is not tied to one specific lab and a high degree of specificity even for firm represented Octant in corporate
allows the company to work with asymptomatic patients, Mammoth and patent matters related to the
a number of certified labs offering struck a deal with GlaxoSmithKline transaction and has served as an
several authorized tests. The firm Consumer Healthcare to accelerate advisor to the company since its
is representing Everlywell in development of the test in hopes of inception as a spinout from UCLA.
Wilson Sonsini Supports UCSF Health Hub in Launch of Volunteer Patriots Program,
Accelerating COVID-19 Solutions
On April 1, 2020, UC San Francisco’s Health Hub, a nonprofit innovation hub and start-up studio supporting the next wave of
digital health entrepreneurs, announced the launch of the UCSF Volunteer Patriots Program, a unique effort that will help
UCSF build high-impact internal solutions to respond to COVID-19 by bringing together the best talent from Silicon Valley, the
UCSF ecosystem, and the Health Hub community. Wilson Sonsini is serving as a legal resource to and sponsor of the program.
The program was launched with three critical projects: building a staff scheduling solution for COVID-19 screening;
developing multi-language COVID-19 education content for non-English speaking patients that can be distributed digitally;
and creating a prioritization/triaging solution for rescheduling patients whose elective procedures have been deferred
because of the outbreak. New projects identified by UCSF will be added periodically.
The Wilson Sonsini team providing legal resources to the program includes partners Ali Alemozafar and James Huie, who
both serve on the board of UCSF Health Hub. To learn more about the program, visit https://www.ucsfvolunteerpatriots.com/.
6
SUMMER 2020
THE LIFE SCIENCES REPORT
FDA Issues MAPP on Conversion of ANDA Approval
to Tentative Approval
By David Hoffmeister and Charles Andres submitted a paragraph IV certification
must provide timely notice of the
Introduction paragraph IV certification to the new
An ANDA must be approved
drug application (NDA) holder and each before a generic drug can be
When a generic drug manufacturer patent owner. The notice must include a
seeks approval for an abbreviated new description of the legal and factual basis
marketed in the U.S. Tentative
drug application, or ANDA, the timing for the paragraph IV certification that approval is not the same as
of ANDA approval depends in part the patent(s) are invalid, unenforceable,
on patent and regulatory exclusivity or not infringed. If the NDA holder or
approval, and tentatively
protection for the reference listed drug, patent owner, responsive to this notice, approved ANDA drugs cannot
or RLD. Although patent and regulatory timely initiates a patent infringement
exclusivities can run concurrently, suit against the ANDA applicant, the U.S.
be marketed in the United
they are separate forms of intellectual Food and Drug Administration’s (FDA’s) States.
property. approval of the ANDA will generally be
stayed for 30 months. The 30-month stay
Both patents and regulatory exclusivities runs from the later of the date of receipt
MAPP Outlines the FDA’s Multi-Office
have individual expiration dates, of the notice by the NDA holder or patent
Procedure
but they differ in that patents can be owner or such longer or shorter time
challenged in a federal district court or as a court might order. Importantly, by
The FDA recently posted MAPP 5220.2,
in the Patent Office, while regulatory some estimates, the average length of an
which outlines the process that the
exclusivities, with some rarer exceptions ANDA litigation runs about 38 months,
agency employs when deciding whether
(e.g., for orphan drugs), are not generally which means the ANDA may be ready
to make a change in status for an
open to challenge or workaround for approval—and the 30-month stay
approved ANDA—that is, in deciding
(Section viii carve-outs). may run—before the patent litigation is
whether to convert the ANDA approval
finished.
The Hatch-Waxman Act provides a to a tentative approval. The ANDA
framework for ANDA (generic drug) Thus, the FDA may issue final ANDA status is important. An ANDA must be
applicants to challenge timely Orange approval at the conclusion of the approved before a generic drug can be
Book-listed patents that contain 30-month stay if: the suit is still marketed in the United States. Tentative
claims covering the approved drug, pending, the ANDA does not contain approval is not the same as approval, and
formulation, and methods of treatment any paragraph III certifications, the tentatively approved ANDA drugs cannot
employing these. Within the Hatch- ANDA is not blocked by any unexpired be marketed in the United States. The
Waxman framework, ANDA applicants exclusivities, and all other requirements FDA’s MAPPs outline, or “map,” internal
must provide a certification that each (e.g., a showing of bioequivalence, FDA policies and procedures.
Orange Book-listed patent has expired which is sometimes misunderstood;
(a paragraph II certification); that the see also here) are met. In some cases, When the FDA has approved an ANDA
ANDA applicant will not come to market however, after the ANDA is approved, and a federal district court subsequently
until the patent(s) have expired (a the NDA holder or patent owner may issues an order that timely Orange
paragraph III certification); or that the be successful in its patent infringement Book-listed patent(s) are valid and
patent(s) are unenforceable, will not be lawsuit. In these cases, a federal district infringed, the FDA must determine
infringed, or are invalid (a paragraph IV court may order that the patent(s) are whether it is appropriate to convert
certification). Paragraph IV certifications infringed and that ANDA approval is the ANDA’s status from approved to
set the stage for challenging timely not effective before the expiration of the tentatively approved, as well as the
Orange Book-listed patents. infringed patent(s). Such a situation may timing of the conversion. To help the
necessitate that the FDA make a change FDA make these determinations, ANDA
Once the FDA agrees to review the in the approved status of the ANDA. applicants are required to submit any
ANDA, an ANDA applicant who has and all documents related to the court’s
Continued on page 8...
7SUMMER 2020
THE LIFE SCIENCES REPORT
FDA Issues MAPP on Conversion of ANDA Approval to Tentative Approval (Continued from page 7)
determination within 14 days of the date Policy Patent and Exclusivity Team (the happens only after several layers of
of entry by the court, the date of appeal, Team) receives information concerning FDA review, and these take time. Thus,
or the expiration of the time for appeal. A the patent infringement lawsuit. The the change will not be instantaneous
list of required submissions can be found Team then verifies that the patents-in- upon issuance of the federal district
here. suit are Orange Book-listed, and then court order. Second, a well-crafted,
assesses court order(s) and motion(s) pending motion for a stay of the district
According to the MAPP, the FDA for stay of the order(s) to determine court judgment can halt or delay the
considers several factors when whether conversion of ANDA status from conversion process. As such, ANDA
determining whether it is appropriate approved to tentatively approved may be applicants, as well as NDA holders
appropriate. and patent owners, should give an
appropriate level of thought to preparing
The Team then notifies the Deputy and responding to these motions.
A change of ANDA status Director of the Office of Generic Finally, if the FDA converts an approved
Drug Policy Division of Legal and ANDA to tentatively approved status,
from approved to tentatively
Regulatory Support (OGDP DLRS) this tentative approval does not allow
approved happens only about the status of the lawsuit, the generic drug to be marketed in the
provides a recommendation, and, United States. Thus, any ANDA that is
after several layers of FDA
where appropriate, drafts “Conversion converted to tentative approval status
review, and these take time. to ANDA Tentative Approval” letters. must subsequently obtain an approval
The OGDP DLRS Deputy Director (or letter from the FDA before going to
Thus, the change will not be
designee) then reviews the assessment market. Accordingly, the MAPP process
instantaneous upon issuance and the “Conversion to ANDA Tentative can be employed by branded drug
Approval” letter. Afterward, the DLRS manufacturers to delay market entry of
of the federal district court
Director (or designee) performs a a generic drug. And conversely, generic
order. secondary review of the “Conversion to drug applicants should take reasonable
ANDA Tentative Approval” letter. measures, where appropriate, to halt or
delay the process.
At that point, the Office of Regulatory
to convert an ANDA with approved Operations Division of Project
David Hoffmeister
status to tentatively approved status. For Management (ORO), among other
(650) 354-4246
example, in addition to considering the things, issues the “Conversion to ANDA
dhoffmeister@wsgr.com
district court judgment that the patent(s) Tentative Approval” letter, updates the
are valid and infringed, the FDA will ANDA status to tentative approval,
consider any documents showing that and notifies the Orange Book staff of
the district court judgment has been the conversion. The ORO Immediate Charles Andres
stayed, or that there is a pending motion office then provides final signature to (202) 973-8875
for stay of the district court judgment. the “Conversion to ANDA Tentative candres@wsgr.com
Approval” letter.
The MAPP walks through the agency’s
decision-making process, which involves Conclusion
multiple layers of review, starting at
the team level and proceeding to the There are several takeaways from the
director level. At the start of the review MAPP. First, a change of ANDA status
process, the Office of Generic Drug from approved to tentatively approved
8SUMMER 2020
THE LIFE SCIENCES REPORT
Life Sciences Venture Financings for Wilson Sonsini Clients
By Scott Murano
The table below includes data from life sciences transactions in which Wilson Sonsini Goodrich & Rosati clients participated during
the first and second halves of 2019. Specifically, the table compares—by industry segment—the number of closings, the total amount
raised, and the average amount raised per closing across the two six-month periods.
1H 2019 1H 2019 1H 2019 2H 2019 2H 2019 2H 2019
Total Average Total Average
Life Sciences Number of Amount Amount Number of Amount Amount
Industry Segment Closings Raised ($M) Raised ($M) Closings Raised ($M) Raised ($M)
Biopharmaceuticals 44 $1,203.07 $27.34 42 $770.62 $18.35
Genomics 7 $59.88 $8.55 9 $81.96 $9.11
Diagnostics 10 $140.53 $14.05 13 $183.98 $14.15
Medical Devices & Equipment 50 $591.04 $11.82 39 $308.92 $7.92
Health IT 14 $160.59 $11.47 18 $180.02 $10.00
Healthcare Services 19 $197.92 $10.42 15 $465.01 $31.00
Total 144 $2,353.03 136 $1,990.50
The data demonstrates that venture of closings decreased 21.1 percent, from
financing activity decreased from the 19 to 15, while the total amount raised
first half of 2019 to the second half of From the first half of 2019 increased 134.9 percent, from $197.92
2019 with respect to the total number million to $465.01 million.
to the second half of 2019,
of closings and the total amount raised.
Specifically, the total number of closings the total number of closings The remaining three industry segments
across all industry segments decreased across all industry segments fared better. The number of closings in
5.6 percent, from 144 to 136, and the the fourth-largest industry segment—
total amount raised across all industry decreased 5.6 percent and the health IT—increased 28.6 percent, from
segments decreased 15.4 percent, from total amount raised decreased 14 to 18, while the total amount raised
$2,353.03 million to $1,990.50 million. increased 12.1 percent, from $160.59
15.4 percent million to $180.02 million. The number
Notably, the two largest industry of closings in the fifth-largest industry
segments during the first half of 2019— segment—diagnostics—increased 30
medical devices and equipment and percent, from 10 to 13, while the total
number of closings in the second-largest
biopharmaceuticals—experienced both amount raised increased 30.9 percent,
industry segment—biopharmaceuticals—
a decrease in number of closings and in from $140.53 million to $183.98 million.
decreased 4.5 percent, from 44 to
total amount raised between the first The number of closings in the smallest
42, while the total amount raised in
and second halves of 2019. Specifically, industry segment—genomics—increased
the number of closings in the largest biopharmaceuticals decreased 35.9 28.6 percent, from 7 to 9, while the total
industry segment—medical devices percent, from $1,203.07 million to amount raised increased 36.9 percent,
and equipment—decreased 22 percent, $770.62 million. In contrast, the third- from $59.88 million to $81.96 million.
from 50 to 39, while the total amount largest industry segment—healthcare
raised in medical devices and equipment services—experienced a decrease in In addition, our data suggests that Series
decreased 47.7 percent, from $591.04 number of closings, but an increase in A (including Series Seed) financing
million to $308.92 million. Similarly, the total amount raised: the total number activity and Series C financing activity,
Continued on page 10...
9SUMMER 2020
THE LIFE SCIENCES REPORT
Life Sciences Venture Financings for Wilson Sonsini Clients (Continued from page 9)
period for Series B and Series C and the second half of 2019, suggesting that
later-stage financings. The average pre- companies may be working out creative
Average pre-money valuations money valuation for Series A (including short-term financing arrangements
Series Seed) financings increased 18.3 in lieu of closing more traditional
for life sciences companies
percent, from $12.11 million to $14.32 financing rounds in order to weather
increased from 1H 2019 to 2H million; the average pre-money valuation
for Series B financings decreased 8.8
2019 for Series A (including
percent, from $78.74 million to $71.81
Series Seed) financings, but million; and the average pre-money It was notable that bridge
decreased for Series B and valuation for Series C and later-stage financing and other non-
financings decreased 23.9 percent, from
Series C and later-stage $281.50 million to $214.31 million. traditional financing activity
financings as a percentage of all other
Other data taken from transactions in
which all firm clients participated in the financing activity significantly
in each case as a percentage of all
second half of 2019 suggests that life increased during 2H 2019,
sciences is now tied with software as
other financing activity, decreased
the most active industry for investment suggesting that companies
from the first half of 2019 to the second
half of 2019, while Series B financing
among our clients, as measured by total may be working out creative
amount raised. For the second half of
activity and bridge financing activity
2019, life sciences and software both short-term financing
as a percentage of all other financing
activity increased across the same
represented 30 percent of total funds arrangements to weather the
raised by our clients. In contrast, in the
period. Specifically, the number of
first half of 2019, life sciences accounted storm
Series A (including Series Seed) closings
for 24 percent of total funds raised, while
decreased from 33.8 percent to 30.8
software accounted for 50 percent of
percent, the number of Series B closings
total funds raised. the storm. Unfortunately, in light of the
increased from 12.8 percent to 15.4
COVID-19 outbreak and the ensuing
percent, and the number of Series C and
Overall, the data indicates that access decline in economic activity, rise in
later-stage closings decreased from 16.2
to venture capital for the life sciences unemployment, and weakening of the
percent to 15.4 percent. Bridge financing
industry decreased in the second half financial markets, we expect to report a
activity decreased from 24.3 percent
of 2019 compared to the first half of continued downward trend in venture
to 21.7 percent over the same period,
2019, representing the end of a growth financing activity over the first half of
while recapitalization and other non-
trend experienced over the two prior 2020 in our next issue.
traditional financing activity increased
six-month measurement periods.
from 12.9 percent to 16.8 percent.
Against that backdrop of decreased Scott Murano
macro-level financing activity, it was (650) 849-3316
Average pre-money valuations for life
notable that bridge financing and other smurano@wsgr.com
sciences companies increased from the
non-traditional financing activity as
first half of 2019 to the second half of
a percentage of all other financing
2019 for Series A (including Series Seed)
activity significantly increased during
financings, but decreased over the same
10SUMMER 2020
THE LIFE SCIENCES REPORT
An Interview with Ryan Phelan:
Using Biotechnology to Revive Endangered Species
and Restore Damaged Ecosystems
COVID-19 Vaccines and the
Harvesting, Bleeding, and Killing
of Horseshoe Crabs
Wilson Sonsini attorneys Vern Norviel
and Charles Andres recently sat down
with Ryan Phelan of Revive & Restore
(R&R). R&R is using 21stt century
biotechnology (including genomics, high
throughput sequencing, and synthetic
biology) to address urgent conservation
challenges.
(Photo by Timothy Fadek/Corbis via Getty Images)
One issue that is particularly pressing is with minimal regulatory hurdles. an endangered wild animal as their
the harvesting and bleeding of horseshoe Luckily, an alternative to LAL exists in foundation.
crabs, a threatened keystone species the form of recombinant Factor C protein
and the source of limulus amebocyte (rFC), which can be readily made in more Since January 1, pharmaceutical compa-
lysate (LAL). LAL, obtained from the than sufficient quantities to meet present nies and environmental organizations
blood of horseshoe crabs, is employed and future pharmaceutical needs. A were expecting the United States Phar-
in pharmaceutical manufacturing to test number of peer-reviewed scientific macopeia (USP) to name rFC as an LAL
human and animal vaccines and drugs publications attest to the fact that rFC is alternative, thereby making it easier for
for the presence of bacterial endotoxins. a safe, effective, and viable alternative pharmaceutical manufacturers to employ
to LAL. For instance, Europe and China rFC into their manufacturing process-
In essence, the crabs are harvested in have adopted rFC as a LAL alternative. es. But on May 29, the USP did just the
the hundreds of thousands from the opposite, reversing an earlier decision
Atlantic coast, and then spend 24 to Major pharmaceutical companies to publish the equivalency endorsement.
48 hours being transported by boat have embraced the so-called “three R Instead, the USP said they will develop
to factories, where many of the crabs Framework”: an entirely separate chapter in their
die in transit. The crabs that survive guidelines—a process that is likely to
are impaled with a needle and bled in • Replace the use of animals with take years. R&R seeks to have the USP
factory-like settings and drained of about alternative techniques, or avoid the change course and name rFC as an LAL
one-third of their blood, as shown in the use of animals altogether; alternative. With this as background, we
photo above. • Reduce the number of animals introduce Ryan Phelan.
used to a minimum, to obtain
After being industrially bled, the crabs information from fewer animals or
are returned to the ocean, where many more information from the same
of them die and others fail to spawn. number of animals;
Because they are technically returned to • Refine the way experiments are
the ocean, and because LAL is deemed a carried out, to make sure animals
medical necessity, it is essentially a non- suffer as little as possible. This
regulated industry. includes better housing and
improvements to procedures that
The race to develop COVID-19 vaccines— minimize pain and suffering and/or
and the anticipated production of improve animal welfare.
billions of COVID-19 vaccine doses—
highlights the need for making available Ryan Phelan
rFC fits into the three R Framework. In (Photo credit: Christopher Michel)
to pharmaceutical companies a safe and addition, rFC de-risks supply chains
scientifically proven LAL alternative that otherwise rely on harvesting
Continued on page 12...
11SUMMER 2020
THE LIFE SCIENCES REPORT
An Interview with Ryan Phelan . . . (Continued from page 11)
Ryan, please introduce yourself to our First, we are preparing, in conjunction genetic resources could restore diversity
readers. with partners, to develop a permanent into the BFF population. Those genomes
“vaccine” to Sylvatic plague. In essence, were from a living ferret representative
Hi, readers. I am a serial entrepreneur we are looking to convert an effective of the current population and two
with two successful liquidity exits, vaccine for plague in ferrets into a cryopreserved cell lines of ferrets
including DNA Direct. After the second permanent inheritable trait. If successful, originally captured from the wild in the
exit, I decided to take a different the genetically vaccinated BFFs would 1980s that were not part of the captive
course: using biotechnology to tackle be born with resistance to plague, which breeding population.
unmet conservation challenges. To today can only be accomplished by
do this, I co-founded R&R, a 501(c)(3) capturing the animals and treating them The study found that historic genetic
foundation, a little over seven years with a traditional vaccine. Although diversity could increase diversity in the
ago. In essence, I wanted to take the this current approach protects the BFFs living population if historic samples
21st century scientific toolbox being from plague, it keeps them reliant on the were bred back into the population.
developed for human medicine and continual efforts of humans for survival Cloning could be used to reproduce
apply it to pressing environmental in the wild. the historic ferrets and introduce new
problems. founding genetics into the population—a
We have multiple projects to develop first for an endangered species.
Why name the foundation Revive & the necessary technology for inheritable
Restore? vaccines for BFFs. First, we are Please go here for a list of our current
developing methods for introducing projects.
Great question! We wanted to use new genes into the BFF genome using
state-of-the-art biotechnology to revive advanced reproductive technologies, What is the mission of Revive &
endangered species and restore their like cloning. In parallel, we are using lab Restore?
ecosystems. Hence, Revive & Restore. mice to test the hypothesis that a gene
for an antibody that attacks Sylvatic We’re the leading wildlife conservation
Can you provide some examples of plague can lead to heritable immunity organization bringing biotechnologies to
reviving and restoring? over many generations. conservation. Genetics and genomics can
help us build a “Genetic Rescue Toolkit”
Sure. One example is our Black-footed Second, we are looking to increase the that helps enhance genetic diversity,
Ferret (BFF) project, which we are genetic diversity of BFFs. Revive & build disease resistance, facilitate
conducting in conjunction with the Restore partnered with San Diego Zoo adaptation to climate change, and more.
United States Fish & Wildlife Service’s Global to study the genomes of four Yet for most conservationists, these tools
(USFWS’s) unique BFF specimens with the goal of are still not readily available. Below is a
National Black- understanding the extent of the genetic graphic that captures our mission:
footed Ferret diversity problem and whether existing
Conservation
Center.
BFFs are
endangered and
are indigenous to
North American
prairies. The
The Black-footed USFWS has been
Ferret doing a fantastic
(Photo credit: UCFWS)
job breeding BFFs
and reintroducing
them into the wild. But the BFFs suffer
from two disadvantages: low genetic
diversity and complete susceptibility to
Sylvatic plague. We are studying two (Graphic courtesy of Revive & Restore)
approaches to address these problems.
12SUMMER 2020
THE LIFE SCIENCES REPORT
What are the organizational is: what do we want to do in the next 200 The USP’s announcement on May 29
components of Revive & Restore? years? Without addressing biodiversity appears contradictory: While the USP
issues, we will see increasing pathogens tells manufacturers that they must
One important component is our (e.g., Ebola, COVID-19) and more provide real-world evidence of rFC
Catalyst Science Fund. We created this challenges to human health. Put equivalence, the USP is also aiding its
fund to lower the barriers of entry and differently, humans are part of nature, use for COVID-19 vaccine development.
to increase the use of biotechnology and humans cannot escape the effects
by conservationists through the of the degradation of the natural This announcement seems purpose-
development of the Genetic Rescue environment. The below graphic shows built to absolve the USP from any
Toolkit. In the space of about two where we were, where we are, and liability. As companies ramp up to
years, we have raised $6M, which where we want to move towards: a more produce at least 14 billion coronavirus
we are using to fund projects aimed bioabundant future. vaccines, there will undoubtedly be
at demonstrating the application of an increasing demand for endotoxin
biotechnologies to problems that have Let’s talk more about bleeding testing. By encouraging vaccine
traditionally been the hardest for horseshoe crabs. Why do you think the manufacturers to use rFC, the USP
conservation to solve. For example, USP changed course? cannot be blamed if the supply chain
Revive & Restore has reserved $1.2M of horseshoe crab blood becomes
in funding for a new program we just The motives behind the USP’s change in untenable. But, by continuing to place
course remain unclear—and as we say in the burden of proof on pharmaceutical
launched called Wild Genomes, which
the horseshoe crab world, it smells fishy. companies, the USP punts regulation
will award research grants over the next
to the FDA approval process while
two years to scientists addressing a clear What incentive could the USP have to
seemingly keeping the USP in good
conservation need. This program will further delay the widespread use of rFC?
standing with the horseshoe crab
accelerate the genomic sequencing and Who is exerting pressure on the USP?
bleeders.
biobanking of threatened species and There are several companies that have
put the fundamental tools of genetic a vested interest in the bleeding of the
But a few pharmaceutical companies,
rescue directly into the hands of those horseshoe crabs.
like Eli Lilly, are already using rFC. Plus,
who manage wildlife.
the European Pharmacopeia this July
At the same time that the USP changed
will be publishing the guidance that was
Why is this important? its course, it also announced that in
expected from the USP.
light of the global pandemic, COVID-19
We are in a present-day extinction vaccine manufacturers can utilize rFC
What does R&R want from the USP?
crisis. We know that we have changed for endotoxin testing and that the USP
the environment significantly over would provide assistance to do so as We want the USP to do what they said
the last 200 years—and the question part of their Trust Accelerated program. they were going to do: 1) honor the
existing science and data; and 2) do what
pharmaceutical companies are urging
them to do. We want the USP to reverse
their decision on moving ahead with a
separate chapter and demanding further
efficacy studies. rFC does not need to
be in its own stand-alone chapter in the
pharmacopeia. Why? Several reasons,
including:
• We know there have been over 200
pharmaceutical products studied
using rFC, providing significant
data with vaccines, raw materials,
(Graphic courtesy of Revive & Restore) and large- and small-molecule drug
products. Our own 2018 review
Continued on page 14...
13SUMMER 2020
THE LIFE SCIENCES REPORT
An Interview with Ryan Phelan . . . (Continued from page 13)
article published in PLOS Biology of of water in harsh conditions, and There are many ways to help. Perhaps
10 rFC efficacy studies demonstrated bleeding, and then returned to a the most direct way to make a difference
that commercially available rFC location very different from where is to contribute to our Catalyst Science
tests detect endotoxins with results they were originally caught. Fund. Every contribution helps fund
equivalent to or better than LAL, the science needed to secure a more
regardless of which company • The horseshoe crab plays a key role biodiverse future. We are building a new
manufactured it. The breadth of in the ecosystem. Thousands of community of biotechnologists focused
these studies also showed strong migratory birds critically depend on on creating solutions, not just measuring
efficacy across a range of uses and the spawning of the horseshoe crabs the decline of the natural world. It’s
demonstrated high sensitivity, as they refuel on their eggs during an exciting and optimistic way to get
strong reliability, and other positive the spring migration. involved in conservation, and there is
considerations in the clinical use such a wide range of species that can
of rFC. • The potential for a crash in be helped by this approach. Corporate
horseshoe crab numbers, as contributions helped jumpstart the fund
• We see no evidence-based reason happened 30 years ago, could (Promega Corporation donated the first
not to declare rFC equivalent imperil endotoxin testing and hence $3M). We’ve been able to match that
to LAL. rFC is made from the
the supply chain for critical vaccines contribution so far, and now intend to
horseshoe crab gene that codes for
and therapeutics. grow the fund to $10M.
the active component in LAL. But,
because LAL includes other factors,
• Because LAL is an essential Is there anything else you would like
it offers less consistent results!
component of vaccine production, readers to know?
Indeed, because LAL suffers from
by destroying the only source of this
beta-glucan interference, rFC could
natural product, these companies are In light of COVID-19, we all realize how
be deemed superior.
potentially creating a downstream human health and the environment
national security issue. are intimately intertwined, and the
• Removing all unnecessary barriers
importance of using cutting-edge
that prevent the broader use of
What does R&R want from science to solve urgent problems. R&R
rFC would give pharmaceutical
pharmaceutical companies? is one small part of this and relies on
companies another valuable tool
the involvement of people from all
at their disposal to quickly bring
forward safe and effective vaccines We would like to see more walks of life. Our effort to grow the
and therapeutics. pharmaceutical companies adopt Catalyst Science Fund is instrumental
rFC. Just testing the water used in to that success. It is often difficult for
• Both the European Pharmacopoeia manufacturing with rFC pharma researchers to find funding to utilize the
and the Chinese Pharmacopoeia could reduce its reliance on LAL by 90 tools of biotechnology, like genomic
have recently recognized rFC. The percent. Doing so is the right thing for sequencing, in their conservation work
U.S. is sorely lagging behind, and the environment and for public health, because it is so experimental. Catalyst
more importantly, delaying and and would reduce supply chain risk for a Science Fund grants enable these
jeopardizing global harmonization component that is essential for vaccine researchers to generate the first proofs
across the pharmacopeias. manufacture because current processes of concept for these new approaches,
rely on non-sustainable harvesting which can lead to increased interest by
• Given such equivalency, the USP of a wild animal. We also would ask the larger funding community.
should also consider the larger pharmaceutical companies to write the
context of animal welfare and USP and demand that the USP remove all How can readers get in touch with
environmental conservation. barriers to adoption of rFC. you?
• Hundreds of thousands of crabs How can people get involved with I can be reached by email at ryan@
are subjected to capture, time out R&R? reviverestore.org.
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