Building biotech solutions for diseases of the developing world

1. Building biotech solutions for diseases of the developing world Global Health Council June 1, 2006 Washington, DC Wendy Taylor Founder and Vice President Strategy and Operations

2. BVGH’s Fundamental Premise The innovative drive and expertise of the biotech industry are integral to the mission of saving lives and treating diseases that afflict the world's poorest people.

3. Key Barriers to Biotech Participation • Market • Disbelief that there’s a market for global health • Concern about opportunity costs and focus • Funding • Skeptical of investor support for global health • Unable to access sufficient R+D funding • Information • Unfamiliar with neglected diseases • Unsure of developing world markets

4. BVGH Mission BVGH is breaking down barriers that hinder development of new vaccines, drugs and diagnostics to treat the urgent medical needs of the developing world.

5. BVGH Role: Bridging Biotech & Global Health • Identify targets for biotech impact • Create opportunities and incentives • Build strategies • Catalyze private sector R&D through new partnerships and funding

6. Reasons to Be Optimistic • Revolution in scientific tools available • Biotech industry is mature enough to tackle problems of this scale • Funding increasingly there to develop new solutions • Untapped markets that appeal to innovators

7. 1. Scientific Opportunity • Biotech advances applied successfully to many diseases of developed world • NO Reason these advances can’t be used to make strides against neglected diseases Rheumatoid arthritis Non-Hodgkin's lymphoma Multiple sclerosis Breast cancer Cardiovascular disease Respiratory syncitial virus Gaucher’s Disease

8. Targets for Biotech Impact • Malaria drugs • P. falciparum genome sequenced • Multiple targets for HTS / RDD • Diarrheal disease vaccines • Several candidates in clinical trials • Key test of dual-use rationale • TB drugs • Apply novel anti-infectives vs. TB • Key targets ID’ed for rapid therapy • Trypanosomatid Drugs • All 3 genomes sequenced in 2005 • Increasing consensus on targets • Diagnostics • Critical need for improved POC IVD

9. 2. Technological Opportunity • Industry’s capable biotech companies DRIVE innovation • Biotechs developing new technologies + novel compounds • VCs pouring in $4B/YR • Big pharma signs dozens partnering deals + buys best companies • Huge advantage is industry’s diversity • –15 Big pharma + 4000 biotechs • – Need lots of different ideas/approaches/competition • to sort winners/losers

10. 3. Funding Opportunity • Funding opportunities have improved dramatically • > $35 billion committed over last 7 years • Gates Foundation: $6 billion • Global Fund: $4.8 billion • PEPFAR: $15 billion • GAVI: $3 billion

11. 4. Market Opportunity • Potential untapped markets • The 85% of the world NOT served by leading pharma/biotech • Emerging market economies can and do pay Global pharmaceutical sales focus on the fastest-growing segments Rest of the world SE Asia + China North America Latin America Japan EU Total >$400 billion 75% in 12 countries

12. BVGH: Bridging biotech & global health • Create incentives and opportunities • Build business cases for major product classes • TB and ETEC vaccines • Spearhead global Advance Market Commitments (AMCs) • Build strategies • Focus leading-edge discovery engines on key GH problems • Help companies build business strategy • Catalyze private sector R&D • Assemble sustainable partnerships around the most compelling projects • Help secure financing

13. Findings and Initial Actions from TB Vaccine Business Case • Identify markets that could potentially generate a return • Quantify financial and social returns • Define how public sector can enhance market and remove barriers Approach • Market size sufficient to attract innovators ($450M - <$1B/year at peak) • Potential impact justifies substantial public sector investment (millions saved) • Clinical trial risk high: >7 years with thousands of patients • Biggest impact on timelines/costs would be improved biomarkers Findings • Promote findings with vaccine companies • Promote development of novel biomarkers • Enhance developing world market to ensure access Actions

14. Booster Vaccine: Cash Flow by Market Profits by year and market for BCG boost (2013 – 2030) Annual profit ($MM) Public mkt demand Competitive event High income Private mkt demand Launch Private mkt China India Mid income ($970) Low income COGS Upfront facility costs ($250MM) ((infrastructure), adjusted for timing of investment(1) Maintenance Facility R&D -970 Represents all costs ($638MM) incurred for R&D, adjusted for timing of investments(2) Source: BVGH/BCG analysis NOTE: Estimates for potential analysis only; information not provided by industry.

15. Potential Impact of TB Vaccine Over a million lives could be saved each year by novel TB vaccines at low cost/DALY Deaths (millions per year) 2.2 2.1 2.0 Baseline 2.0 -7% 1.8 -12% -19% 1.8 1.7 -17% BCG boost -28% 1.5 1.4 -32% 1.2 -40% BCG Replacement 1.1 -48% 0.8 -62% Prime-boost Cost per DALY averted in Africa - BCG Replace ($6-10) - BCG Boost ($21-26) - Prime + Boost ($21-23) Source: BVGH TB Vaccine Business Case

16. Building Markets: Advance Market Commitments (AMCs) • Major shift in donor mindset • Understand need for market-based solutions • How they work: • Donors make legally-binding commitment to create viable markets for key vaccines • Guarantee minimum price for certain volume of successful vaccines • Technical specs for the product must be met • Industry commits to lower long-term price

17. AMCs – BVGH’s Role • Ensure AMCs cost-efficient for donors and attract industry’s capable innovators • Consulted extensively with biotech industry • Over 50 companies and 150 senior executives • Issued two AMC reports • Supported concept and outlined key issues to be addressed • Industry response • OVERALL: Promising mechanism that should move forward • Not magic bullet – push funding still needed • Must be competitive with other opportunities • Concern about demand risk

18. BIO Ventures for Global Health Building biotech solutionsfor diseases of the developing world www.bvgh.org

19. TB Vaccine Business Case • Approach • Identify markets that could potentially generate a return • Quantify financial and social returns • Define how public sector can enhance market and remove barriers • Findings • Strong financial and social case for investment • Est. annual global market: >$450M for BCG replacement; >$750M for boost • Positive NPV, driven by developed world and emerging markets • Potential impact justifies substantial investment • SROI: millions of deaths avoided; cost $19-63/DALY averted • Clinical trial risk high: >5 years with thousands of patients • Follow-Through • Study embraced by industry – first clear definition of market’s value • Companies newly attracted to work on biomarkers and vaccines • “Road show” will promote findings; value of “deep dive” approach

20. BVGH Expertise • Deeply networked with leading players in industry • Broad convening power: Bringing together the best science and the most skillful product developers • Experience building successful product development organizations and partnerships • Trusted partner: Ability to advocate for global health without promoting particular products or strategies

21. Landscape Analysis High level assessment criteria Burden Global burden of disease in DALYs and deaths Needs Gap Adequacy of current solutions proxied by mortality CAGR. Qualitative scan of gaps in current drugs, vaccines, & diagnostics Status of Science Quantitative scan of publication activity, state of pipeline, and NIH funding; review of key publications, partic. rel. to targets Relevance to Biotech Match needs w/ key biotech assets – Rx, Dx, Vx discovery; preclinical and clinical product development capabilities Availability of Funding First pass review of a) hybrid and dual/use markets; b) other pull and push funding