Matthew Engel

Organized by the Fundamentals of the Bioscience Industry Program – Alumni Executive Committee

Presenting:

Integrating personalized health care into clinical practice Organized by: Fundamentals of the Bioscience Industry Program: Alumni Network Executive Committee NY State Center for Biotechnology Mount Sinai School of Medicine Date: Thursday, December 2nd, 2010 at 6:30pm Location: Mount Sinai School of Medicine, Icahn Medical Institute 1425 Madison Avenue (@ 98th St.), 1st Floor Seminar room Click Here to RSVP View Our Website Abstract The pursuit of personalized medicine continues to transform biomedical research and innovation from the bench to the bedside. Fundamentals of the Bioscience Industry Program (FOBIP) Alumni Network Executive Committee‘s Personalized Medicine Seminar brings together a clinical scientist and two healthcare experts to discuss, debate and identify the current challenges and opportunities for the development of a personalized approach to medicine and healthcare. They will provide perspective from the different participants of the healthcare industry and offer insights into this promising area of medical research. Panelists Paul Chapman, MD, Professor of Medicine of Weill Medical College and Graduate School of Medical Sciences, and Attending Physician of Memorial Sloan-Kettering Cancer Center, and Memorial Hospital for Cancer and Allied Diseases. His research interests include the evaluation of drugs that target the genetic mutations in melanoma cells. Mark Horn, MD, MPH, Chief Medical Officer of Target Health, Inc., and Senior Advisor to Avalere Health. Prior to joining Target Health, Dr. Horn spent 25 years at Pfizer Inc., leading teams in Licensing & Development, Medical Marketing in multiple therapeutic areas, and Worldwide Public Affairs and Policy. Glen Park, PharmD, Senior Director Clinical and Regulatory Affairs of Target Health, Inc. Dr. Park has over 20 years of extensive regulatory affairs and clinical development experience acquired in industry – Aventis Pharma, Ingenix Pharmaceuticals, and Sankyo Pharma, and academic settings – University of Iowa and University of Toledo. Moderator Eric Vieira, PhD, Assistant Director of the Office of Technology & Business Development of the Mount Sinai Medical Center, and Course Director of the Fundamentals of the Bioscience Industry Program. Agenda: 6:30 pm ? 8:00 pm Panel Discussion (networking reception to follow)

November 18, 2010 @ 8PM – Stony Brook University Staller Center, Main Stage

Tickets Prices: $10 General Admission, $5 for Students and Senior Citizens

Program:
Moldau by Bedrich Smetana (1824-1884)
Water Music by Georg Friedrich Handel (1685-1759)
The Engulfed Cathedral by Claude Debussy (1862-1918)
Sea Songs by Ralph Vaughan Williams (1872-1958)
Victory at Sea by Richard Rogers (1902-1979)
Colonel Bogey by Kenneth J. Alford (1881-1945)
Pirates of the Caribbean by Klaus Badelt (b. 1967)
Selections from Showboat by Jerome Kern (1885-1945)

A passive house is a living structure designed to recycle and trap heat. It is essentially built as a highly insulated enclosure with a special ventilation system that transfers warmth lost from the outgoing hot air to the incoming cool air. The owner is reducing waste and conserving a significant amount of thermal energy – these types of homes have been known to reduce heating bills by up to 90%, as they don’t contain any specific heating element. All heat comes from intrinsic sources of energy such as lighting, appliances, and the human body. Passive homes were originally pioneered in Germany, and are already popular in Europe and becoming more so in the United States. Below is a recent video which was posted in the New York Times Business Section in September 2010 which tells the story of a New England family who designed and built their own passive home.

Long term economic outlook

I thought it was interesting to note that according to the video, the cost of building a passive house in Europe in 2010 can be as little as 2-3% greater than building a traditional house (without these energy efficiency features), compared to the 15-20% increased cost in the U.S.. Therefore it is more expensive to build a passive house in the U.S. than in Europe. Assuming current price stability over the next decade (which is unlikely), passive homeowners in America will generally make up for the cost difference in 10 years through energy savings. I found the topic of passive homes first discussed online in the Times in December 2008, in a fantastic article entitled “No Furnaces But Heat Aplenty in Passive Houses” – however, I credit first hearing the about concept and construction of passive homes in 2006 from a German girlfriend. The 2008 article quotes the cost of building a passive house in Germany as 5-7% more than a traditional home. So, in Germany the costs for building passive homes have dropped 50% in the last two years (which is great news)! If the U.S. were to experience a similar trend in the coming decade due to increased demand and improved supply chain efficiency and production of raw materials, the cost of building passive houses could proportionally fall here as well, potentially allowing American builders to recoup costs within just 5 years.

U.S. government promoting energy efficiency at home

The U.S. Department of Energy published an article Building America Research in Action: Air Sealing in Existing Homes in their Building Energy Efficiency News, part of the Building Technologies Program and greater push towards Energy Efficiency and Renewable Energy (a great website). The mission of the Building Technologies Program (BTP) is to develop technologies, techniques, and tools for making buildings more energy efficient, productive, and affordable. In the coming century, as the demand and cost of energy rises, homes which use less energy and conserve more will provide their inhabitants with greater and greater cost benefits- making the passive house a smart long term investment.

Above is the interior of a Passive House at Darmstadt Kranichstein, published by the Passive House Institute in Germany. Each passive house has the following characteristics: optimal solar alignment (i.e. solar building design), superinsulation, advanced window technology, airtightness, high efficiency natural or mechanical ventilation, and heat recovery systems. There are many different design features available, but the general schematic is to the right. In a nutshell, a special air circulation system is used to recover the thermal energy. This can be accomplished by a mechanical High Efficiency Recovery Ventilation (ERV or HRV) system which are over 90% efficient.

Thermal energy recovery using an erv

As of January 2010, there was only one Energy Recovery Ventilator actually made in the United States, the RecoupAerator 200DX by UltiamteAir. This machine is attached to the duct work of your home and exchanges the entire air of the house every 2 hours. The incoming air is run through a filter removing spores and pollen, which is why passive homes have especially clean air, while outgoing air exchanges its heat and moisture with the incoming fresh air.

RecoupAerator 200DX

It is possible, with enough motivation, awareness, and financial support through tax-credits that the building and re-modelling of most new houses could be accomplished in this manner. The desire to create a home which is essentially energy independent, clean, and green can now be accomplished and is being implemented by builders all over the U.S., especially California and the Northwest. A final comment I heard, was that perhaps specialized, more favorable mortgages could be designed for homeowners who adhered to the standards of ultrahigh efficiency passive homes to help defray the increased up-front costs.

Additional Information

The 100K House – Passive House (Passivhaus) Standard for Energy Efficient Design – April 10, 2008 – 74 comments

The Eco-House Manual by Nigel Griffiths

“Passive houses” yield aggressive carbon cuts

Passive house: The idea of the airtight home takes hold among green-building experts – February 4, 2009

One June 3rd, 2010 Nature Biotechnology hosted a ‘Meet the Author’ event at the Nature Publishing Group New York City headquarters. The invited speaker was Mark Kessel, Founder and Partner at Symphony Capital, LLC. Mr. Kessel is a world expert in innovative product development, mergers and acquisitions, and has spent the last several decades advising companies and financiers. His goal during this well attended and intimate event was to summarize the challenges facing the drug discovery endeavor and analyze previous and future scenarios in order to distill important lessons which can help the industry produce continued success. Before attending, each participant had each read an interview with Mr. Kessel and other business leaders from Bioentrepreneur entitled ‘Other ways of financing your company‘ which discussed trends in early-stage biotech investment. Currently, Mr. Kessel is composing an article for Nature Biotechnology regarding challenges in the pharmaceutical sector, and the business development initiatives designed to deal with them. This report will attempt to summarize the talk given by Mr. Kessel to a group of ~20 graduate students and young professionals, and the information he shared will be incorporated into his upcoming article.

Current Problems within the Pharmaceutical Industry

In the future, business development functions will hold the key to success for large pharma, which is composed of the top 15-20 largest pharmaceutical companies worldwide. The well worn traditional model, which has focused on short term successes, is limiting new breakthroughs in R&D. The traditional model for big pharma is as follows: identify new blockbuster compounds, conduct large phase III clinical trials, and mass market approved drugs to the developed world. However, Mr. Kessel asks if this model can really address the world’s current unmet need for new drugs and continued to describe hurdles facing the industry today and in the future. With pipelines becoming depleted, development costs increasing and a timeline of 10-15 years to market, the US pharma industry is encountering strong earning constraints. Unfortunately, Wall Street evaluates companies based primarily on their short term gains and punishes them for not meeting quarterly expectations. This is in contrast to investment in China which is following a controlled and purposeful ten year plan. From 2009-2014 there will be $130b lost in sales by big pharma due to products going off patent. Companies such as Pfizer are buying other companies (i.e. Wyeth), not to replenish their pipeline, but to increase their earnings in order to satisfy investors. In fact, parts of their R&D pipeline are actually being shut down. There has been an increase in direct-to-consumer advertising, which should be examined more carefully and may be promoting products inappropriately. There is growing pressure from generic manufacturers. The FDA has been under increasing scrutiny to look more closely at safety, and the regulatory environment is becoming tougher. For example, Mr. Kessel asked the audience a rhetorical question: do you think the FDA would approve an oncology compound that has been demonstrated to extend life for several weeks, but produces horrendous side effects? The FDA is under Congressional oversight, and there are concerns about how the industry is conducting itself. Another question: If the customer is currently paying $0.10/pill, would they pay $1.00/pill next year for a drug which provides marginal benefit? Mr. Kessel suspects that patients might not be willing to pay more for incremental benefits during these times of budgetary constraints. He wonders if consumers will even be able to buy the drugs they have been paying for in the past. In an effort to demonstrate the direction in which the healthcare industry is moving, Mr. Kessel shares the example of HUMANA. This is an example of an insurance provider and payer, which is currently collaborating with another company BG Medicines to discover and implement biomarkers for patients. One of the overarching problems with non-personalized medicine is that drugs will often benefit only a minority of patients afflicted with an illness. It would be ideal to target those who will respond to therapy and identify them with biomarkers, and avoid dosing patients who will be non-responders. Insurance companies are  willing to pay for the test, and patients who don’t carry the markers will not get the drugs, increasing efficiency while reducing side effects and costs.

Mr. Kessel foresees a convergence of the FDA and EMA (European Medicines Agency), with a greater focus on safety which will slow down the approval process. All drugs have a safety/toxicity trade off. In the US, we are looking for perfect safety. However, in some fields, we have deemed side effects acceptable, such as oncology. The future will show an increased focus on longevity. However, big pharma is not prepared to capture new innovation, due to their corporate structure and administrative weaknesses. Their strength lies in their ability to recognize and capture external breakthroughs. There is a need to bolster drug discovery. Cutting costs to maintain earnings is not the panacea. The use of outdated business models and flip-flopping strategies i.e. diversifying pipelines/focusing on core competencies is showing inefficient and non-optimal strategic business development.

The Role of Biotech and Generics

Biotech is viewed as a collective of small and nimble companies capable of performing high level R&D. What’s happening in biotech? There are major capital shortages. Programs are being cut and slowed down. Small companies without a year of cash reserves are being unduly punished by the market. There were 17 bankruptcies in the biotech sector last year, which is more than Mr. Kessel had seen in any year since he began practicing law several decades ago. VC’s have moved their interest to late stage compounds. Biotech is looking to big pharma for capital. The biotech industry is trying to distinguish themselves from large pharma – they don’t want to be “tainted” and need to retain their image and ability to charge as much as possible for their products.

China, Brazil, India, and Russia are viewed as rapidly growing global markets. Consumers in those nations will be frequently purchasing from primary generics producers – Pfizer, Teva, Sanofi. They are willing to pay more for name brand generics, which have increased perceived safety assurances. They are frequently opposed to generics produced in their home country. Most new compounds in development are coming out of the US. China will soon have a robust pipeline, as well. Their is a diminishing pack of Phase III compounds to pursue, creating a very small universe for pharma. There are many in-licensing deals occurring. The number of new compounds produced has been cut in half, while the budget spent on bringing them to market has doubled. Compounds which are in-licensed should be deployed. The need to maintain earnings is the most pressing issue for management. Pharma has the cash on hand, this is not the problem. However, that cash is only generating 2% interest sitting in the bank. For example, pharma is engaging in share buyback programs and purchasing outstanding shares with cash in order to control their per share income (less shares creates more revenue per share when revenue is held constant). Shareholders expect their investment to go towards innovation, instead of buying a financial instrument.

Approaches to Addressing Cutting Edge Science

Companies are assessing the cutting edge science being produced at academic institutions. VC is focusing less on early state companies. Pharma has set up their own VC wing. Sometimes they outsource their VC arm to third parties. They are investing in companies that have new platforms. Accelerator programs, such as Lilly’s Chorus have been developed as independent divisions to carry out drug development until Phase III, independent of corporate management. These divisions are sometimes spun out as new companies. There are new partnering deals occurring, drugs are becoming pre-partnered. Other companies are even experiencing foreign take overs.

How did Big Pharma Become the Partner of Choice?

The ultimate solution would be to combine the best of biotech with the best of pharma. Biotech has the entrepreneurial spirit, which can move fast and make quick decisions. Pharma has a global sales force in place, are experts with large clinical trials, regulatory affairs and has cash on hand. Pfizer has attempted a hybrid approach by creating a unique business development unit for each of its therapeutic areas, independent of each other. However, to change big pharma there needs to be a mandate from the top which awards risk taking. These companies are not taking on great compounds in order to avoid risk. Mr. Kessel suggests a change in compensation which allows leaders to shed their “risk avoidance” behavior. He mentions that “no one has ever been fired for not taking on a great compound”, but one can sure be fired for not getting their compound to pass FDA approval. Management consultants, such as McKinsey could be used to help change the corporate culture, though this often takes 5-10 years. There needs to be a creative approach to deal making which helps support innovation on the drug development side. The one size fits all approach needs to be dismissed, and the industry needs to consider new areas of opportunity. For example, the healthcare IT industry is developing databases on how patients respond to various compounds based on previous clinical trials. This could be used in the future to predict the human response to new drugs and streamline the regulatory pathway.

Final Comments

Biotech traditionally suffers from poor management, in that they don’t abandon their failing compounds early enough. Many opportunities still remain for large in-licensing deals (20-90 deals next year). Biosimilars will play an important role, though there will be less of them with more focus on generics. In the future, diversification will be key. Productivity will get worse and we will look to biotech for compounds. The Novartis Model will become more common, as big pharma purchases branded generics, consolidates, and acquires.

This year the 2010 National Association for Graduate-Professional Students (NAGPS) held their Northeast Regional Conference in the beautiful city of Pittsburgh, PA. NAGPS is non-profit, student run organization which functions to represent graduate student interests on a national platform. The NAGPS mission is develop a graduate-professional student network, provide useful resources to grad students, and advocate at the national level on their behalf. This year I was elected to chair of the Employment Concerns Committee at the national conference in Lincoln, NE. I am chairing the Employment Concerns Committee which is carrying out several surveys this year to better understand graduate student stipends, benefits, and career development.

University of Pittsburgh – Tower of Knowledge

At this regional conference in Pittsburgh, we had two days of seminars, talks, and brain storming sessions co-hosted by the University of Pittsburgh and Carnegie Mellon. My trip was sponsored by the Stony Brook University Graduate Student Organization and the Graduate School. Friday afternoon and evening events were help on the UPitt main campus and included a talk by comic artist and author of PhD Comics, Jorge Cham, which unfortunately I couldn’t attend. Saturday’s sessions were held on the Carnegie Mellon campus, and the weather was totally amazing. Their campus has some really nice spots, and I would highly recommend visiting it. UPitt was essentially situated directly in the center of Pittsburgh and integrated into the city itself. There were hundreds of college students walking around, as it was the last day of classes, and lounging in the grass until a brief thundershower came and chased everyone away. I left Pittsburgh back for NY on Sunday afternoon and has just enough time to see the Phipp’s Conservatory and Botanical Gardens. Saturday night featured a wine tasting co-sponsored by both university’s graduate student associations held at the Pittsburgh Zoo & Aquarium.

Rich Fitzgerald – Allegheny County Council President delivering talk at Sunday morning “Pancakes and Politics” at U of Pitt.

Sunday morning, we were privy to a special session of “Pancakes and Politics” organized by Daniel Jimenez, President of the U of Pitt Graduate Student Association. The invited speaker was Rich Fitzgerald, President of the Allegheny Town Council. Rick spoke primarily to the benefits of natural gas extraction in the Allegheny County region around Pittsburgh, and how revenue derived from this process could be used to lower property taxes. He fielded many questions from students regarding the application of alternative energy technologies in lieu of natural gas, which he was not supportive of. Afterwords, I was able to speak with him on the side about some of the issues surrounding wind power and sustainable energy generation, which he kindly listened to. Daniel Jimenez ran for a local position for the Democratic Party in Pittsburgh this year, which was great experience. He is well known for leading the charge against the Pittsburgh “Tuition Tax”.

University of Pittsburgh Student Union

Besides all this sightseeing (I have a few more pictures to share also), we actually did cover alot of ground and do alot of work. I delivered one presentation and lead another brainstorming session. The first presentation covered recent developments and lobbying efforts of Stony Brook University staff and students regarding the proposed New York State Public Higher Education and Investment Act - PHEEIA (Governor Patterson’s Press Release). The brainstorming session I lead was on the two projects we have in development in the Employment Concerns Committee, and we focused on the first project which is nearing launch. It is a nationwide survey to determine best practices at University Career Centers.

NAGPS Employment Concerns Committee – Career Center Analysis and Survey

The conference itself was a huge success with attendees from over a dozen schools featuring many new member institutions. If you have any questions about NAGPS or would like to know more about the Employment Concerns Career Center Survey you can contact me at ecc@nagps.org.

Finally, may favorite pictures were taken on the last day at the Phipp’s Conservatory. I will end this post with some of my pictures taken hastily on Sunday morning. I was able to fit in a visit to these botanical gardens after I checked out of my hotel, but before my flight. Talk about efficiency! Enjoy!

Orchids

Plantings

The Hobbits

The Sun Room

The Cloister Garden

Phipp’s Conservatory during thunderstorm

I had the most amazing experience at Phipp’s Botanical Gardens. While I was walking there, I noticed the skies were clouding and thought to myself that thunderstorms could be brewing. In that case, I would be caught without my umbrella or rain coat since everything was packed and at the hotel. I pressed ahead anyway, and while inside the stunning glass greenhouses, it began to pour. I real torrential rain and thunderstorm! It was quite an experience walking through a greenhouse during a thunderstorm. The winds picked up and began gushing a cool breeze throughout the previously warm and humid terrariums. Rain started coming inside though the various pores in the ceiling. It was an amazing experience that will never be duplicated for me. I was lucky enough to call the hotel shuttle who picked me up and got me to the airport safe and sound! For free! thank you Holiday Inn of Pittsburgh – Five Stars!

We’ve all had our fair share of travel experience. But how many of us can claim they know how to haggle in an Egyptian street market? How about getting the cheapest flights around or picking the right gear? The site http://www.nomadicmatt.com/ is a great source for those who want to take a quick peek at some of the options out there. Even for the veteran frequent flyer, there is always something new to learn and besides, the travel blog is a great outlet for creativity! This reminds me, I need to update my own site and include some of my own recent adventures up here. Enjoy!