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Hello from Stuart Roberts in Sydney,Last Friday we at Prima BioMed announced that we had received a clinical milestone payment from Novartis. The amount of the milestone is undisclosed, and I refer you to the announcement for further details, but in today's shareholder email what I want to emphasise is the quality of the friends which Prima has made through last year's acquisition of Immutep.No doubt you have heard the expression 'Big Pharma' used fairly regularly by players in the biotech industry. I take that term to mean the world's 50 largest pharmaceutical companies, as determined by the size of their prescription drug sales. The thing about Big Pharma is that every single member of that elite club has sales in the billions and can afford to spend a large percentage of its revenues on developing new drugs. For example, No. 50 on the list, Japan's Kyowa Hakko Kirin, had US$2.16bn in prescription drug sales in 2014 but spent US$451m in R&D, which is a massive 21% of revenues. A lot of the R&D spend from Big Pharma these days tends to flow down to emerging drug developers like Prima, since Big Pharma is increasingly finding that the best new drugs aren't invented internally but developed by smaller companies that are innovative and able to move quickly. Also, buying in their new compounds from smaller companies helps lower Big Pharma's risks, since the smaller companies generally do the heavy lifting in the early stages of development. The benefits of partnering with Big Pharma for the smaller company are the cash that fuels later stages of development, the milestones and royalties that a partnering deal gives the smaller company, and, importantly, the kudos that comes with having a large, established company as a partner.Generally speaking, if you invest in a biotech company of Prima's size you get a suite of drug development programs that are promising and that, hopefully, Big Pharma will look at licensing one of these days. With Prima - and this was significant for me when I was considering joining our company early this year - you get the No.1 and No. 7 members of the Big Pharma club as your partners (as measured by Pharmaceutical Executive magazine, in their list published on 14/7/015).No. 7 is GlaxoSmithKline, which partnered with us on depleting LAG-3 antibodies for autoimmune disease several years ago. No. 1 is Novartis, a Swiss company with US$46bn in 2014 prescription drug sales and US$9.3bn in R&D spending. This is the company that gave the world, among other pharmaceutical breakthroughs, Gilenya, an important new treatment option in multiple sclerosis. And it has done particularly well out of Lucentis, a significant monoclonal antibody drug for age-related macular degeneration. However you know a company is really important when someone writes a book about its achievements, and in Novartis' case the book to read is Daniel Vasella's Magic Cancer Bullet: How a Tiny Orange Pill May Rewrite Medical History. This is the story of Novartis' current best-selling drug, Gleevec, for the treatment of chronic myeloid leukemia. Daniel Vasella was CEO of Novartis from 1996 to 2010, and therefore in a good position to tell the story of Gleevec from its beginnings through to FDA approval in May 2001. When I read the book a couple of years go I was impressed with how Novartis didn't expect to make much money out of Gleevec because the patient population was, arguably, too small. However the company's leadership felt that the drug was too good not to go forward because it was bringing about such great outcomes for patients. So they developed it anyway. The result was a product that in 2014 made US$4.75bn in net sales for Novartis. A couple of years ago at an investor meeting in New York I got talking with an Aussie expat now working in the mining industry in Canada. He was asking about treatment options for chronic myeloid leukemia and I mentioned Gleevec. Yes, he said, I'm on that drug and as a result the leukemia is under control.If you want to read a book that will impress you about the power of Big Pharma do well by patients like my friend from Canada, can I encourage you to get hold of Magic Cancer Bullet. It's written with the lay reader in mind, and I think it can provide you with useful background on how drugs get discovered and developed by pharma industry players. And when you're reading it, keep in the back of your mind that the same company which developed a great drug like Gleevec is now a partner of your company, Prima BioMed.Have a great weekend,StuartStuart Roberts Global Head of Investor Relations Prima BioMed LtdDirect: +61 2 9276 1224Mobile: +61 447 247 909 Fax: + 61 2 8569 1880Email: [email protected] |
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