Seeking Alpha
Long/short equity, growth, long-term horizon, biotech
Profile| Send Message| ()  

For the last two years, I have attended the BIO-Europe, a three-day conference with 1,200 companies and over 130 presentations. These presentations range from single company presentations, company exhibits, and my favorite, large multi-company panels that discuss several key industry-related topics. This is a place where you can see trends in the healthcare industry both before and after they develop.

One of the best things about this conference is that it sets companies at the same table that otherwise may not talk, and one of the panels that I sat through was one with leaders in the cell-based immunotherapy industry. These were companies of all sizes and stages of development, and it was very interesting to hear each company's take on the space, and each company's theory on commercialization, development, and then future outlooks for the space. Of course any time a company is presenting at a conference, it is always bullish and is always what the investor wants to hear. However this particular panel created a very intriguing atmosphere, where you could see and feel the differences of opinion based on what makes these companies different and based on which companies were using the most advanced technologies. I will share my experiences and my analysis from this one particular panel of four companies and its moderator.

A Perfect Choice as a Moderator

To moderate the panel of cell-based immunotherapy developers was Dr. Robert Preti from PCT, a NeoStem (NBS) company. I found Dr. Preti to be the perfect selection, almost like Bill Gates leading a technology seminar, because his company, NeoStem/PCT, has the deepest connections to the space. NeoStem/PCT is split into two segments; it has a clinical development segment and then has a manufacturing segment that has direct ties to many of the present companies.

In the clinical segment, NeoStem is developing a Phase 2 product in the cardiovascular space and also a new product line called VSELs. But in the manufacturing segment, PCT manufactures and provides regulatory and commercialization expertise for therapeutic development, specifically in cell development. Therefore, with 14 years of experience, 30,000+ cell therapy procedures, and 100+ clients, NeoStem's PCT may be one of the most knowledgeable and advanced companies in the world in regards to the discussion of this panel.

Although Dr. Preti's job was simply to mediate the panel between the following representatives from the four companies below, there are major ties to these companies. NeoStem's PCT performed the cell manufacturing and storage functions for Dendreon while Provenge was in clinical trials. Currently, PCT is performing these same tasks for ImmunoCellular Therapeutics, which is yet another promising company in development. And PCT is also working with Kiadis, as it endeavors to bring its therapeutic into the US. Therefore, the ties to PCT is clear for the companies below, and with NeoStem's manufacturing business among the fastest growing in the healthcare sector, it is clear to see why optimism is so apparent during this discussion.

Creating a Path for those to Come

To represent Dendreon Corporation (DNDN) was Christine Mikail, the Executive VP, Corporate Development, General Counsel and Secretary. Mikail shared a very different perspective compared to other speakers, as her perspective was from someone representing the first ever approved cell based immunotherapy. And while the drug, Provenge, has had its bumps along the way, the fact is that the company has successfully commercialized Provenge and has proven that such companies can overcome the regulatory and logistic challenges that exist in the cell-based therapeutic space.

According to Mikail, the company is now evaluating upside potential and commercialization opportunities in Europe, and is even assessing available partnerships with other therapeutic companies that may benefit from Dendreon' s experience in the regulatory and market path to success. To me, this implied that Dendreon is looking to work with clinical stage companies, and leverage its leadership position to advance other therapeutics from companies who have entered or will enter the market in the next few years.

Mikail's position is that Dendreon's acquired skills and learning's in science, logistics regulatory, and reimbursement arenas, could all serve as helpful to those coming behind it. Mikail also focused on how this knowledge will contribute to the lowering of COGs and the identification of appropriate reimbursement strategies as it enters into the next phase of its life cycle. While many are skeptical that the company will ever reach its goals of drastically lowering COGs, the company is making great strides, including the closing of its Morris Plains manufacturing facility. We should not ignore the company's place in history, or the path it has created for itself and other companies, which Mikail acknowledged.

A Healthcare Titan Leads Big Pharma towards Immunotherapy Development

Big Pharma company, Novartis (NVS), and its VP, Business Development and Licensing, Oncology, Anne Altmeyer, provided a very different perspective on this emerging industry. For those of you unaware, Novartis licensed a technology from UPenn last year, along with another product from Minnesota, and has since announced its plan to invest $100 million into the technology. The UPenn technology has been one of the more promising technologies in the space, with patients achieving complete remission in early testing. If such results hold in larger studies, this could become a technology that dislocates the existing treatment paradigm of chemotherapy and radiation, and Altmeyer was here to discuss the development of this product from the perspective of big Pharma.

I find it interesting to see Novartis' level of excitement to "re-enter" the cell based immunotherapy industry on the basis of only a few patient's data, with plans to build its franchise around cell-based medicine beyond cancer. The approach is much different from Dendreon, as Dendreon discusses a "been there done that" approach in cell-based medicines, Novartis looks at development from the point of resources and its overwhelming presence and deep experience in drug development and within the healthcare industry. Altmeyer feels that by applying its sophistication to a developing industry that Novartis could get ahead of the curve and take science over the top into commercialization and distribution. And is particularly excited about their view that cancer immunotherapy is the ultimate in personalized medicines, a particular focus of the company.

Altmeyer seemed particularly excited about the potential for cell-based autologous immunotherapies in patient specific therapeutics. At first Novartis appeared like a strange company to invest in this technology from UPenn, but after hearing the company's take on its role in developing the space, I think it's clear that Altmeyer feels as though the distance between cell-based autologous immunotherapies and genomics may not be that far apart, especially when you begin to understand their goal of developing the technology and others to be the ultimate patient specific therapeutic. In other words, Novartis has no problem in the regulatory, research, or clinical aspect of development, but it will still be interesting to see what it creates and how it innovates within this space in the next decade.

Private yet Promising Company Reflects on Progress & Future Development

Kiadis Pharma is a private company and was represented by its CEO, Manfred Ruediger. Kiadis is a clinical stage company that focuses on innovating therapies for late stage blood cancer and related disorders, with its latest product in Phase 2. Of those participating in the panel, Ruediger reflected upon the past and looked towards the future as an industry more so than anyone else, and not specifically as a company representative.

Ruediger views the entry of big Pharma as crucial to propelling the space into a more streamlined market, and likens the space to the biotechnology industry of 30 years ago, which people viewed, wrongly, with doubt. While Kiadis may not be important to the average investor, since it is a private company, I think Ruediger's desire to work with other companies, specifically big Pharma, is a desire shared between all companies within the space. A very sensitive subject appeared to be big Pharma's past decisions to not invest in the space, as many might believe that this is due to commercialization, efficiency, and logistical issues with Dendreon. However, Ruediger and others all believe this reality is shifting to a new paradigm, and that new data and current studies will help to break this barrier of thought, and lead to greater big Pharma participation in the future.

Small & Promising Company Points to "Science" as Determining Factor of Success

Lastly, was ImmunoCellular Therapeutics (IMUC), and representing IMUC was Peter Ho, the Director of Business Development. ImmunoCellular Therapeutics has quickly become a favorite on Wall Street, and among retail investors, as a company with the most impressive data in the cell-based immunotherapy arena. The company has grown from a microcap OTC stock to a $150 million market cap; there were a lot of people interested in what this company had to say about both development and in educating the public. However, Ho continued to reiterate a very science-based outlook on the space, basically insinuating that the science is what will ultimately prevail, and determine success, implying that it is still too early to tell.

Ho offered a very interesting perspective regarding his belief that the science has been an underlying factor of big Pharma's lack of interest, but that when it's all said and done, science will drive the cure for diseases that currently have palliative treatment options. It is the belief of ImmunoCellular Therapeutics that this science is also what drives the investment, and will ultimately lead to partnerships with other leaders both in the space and with other big Pharma companies that will seek to develop its pipeline behind the therapeutics that are created from the science. I suppose that since ImmunoCellular Therapeutics has enrolled more than 200 patients in its Phase 2 glioblastoma multiforme study twice as fast as any other company and has drastically improved survival that it can boast freely that its science is currently the best. It will be interesting to see if this level of confidence is a sign of things to come for this small cap stock, a company that is expected to announce data in the coming weeks and months.

Conclusion

When you listen to a typical presentation or an earnings call, you hear a lot of politically correct comments and answers to questions. But when several companies get together, you get to see how they really assess themselves, the industry, and competition. You start to realize that these companies don't see themselves much different from how we view them, and that there are still many barriers to be crossed. It is obvious that within this particular space, the most important factors for success (in the eyes of the company) is science, resources, and also learning from the past and success of others. And there was clear consensus that the solutions, as Dr. Preti enunciated, are clearly forming along the lines of the challenges that are presented. However, what all expect to occur, is a much more significant level of interest from big Pharma and a much more plentiful space with new companies that focus on these type of therapeutics. In the end, this bodes well for the companies who came to the party early, and begun development while others sat on the sidelines. It also bodes well for the moderator, and his company NeoStem/PCT, a company that will grow as new products go into development and enter the market. Overall, it's a win for all those involved, and according to these companies, we will see more success in the years ahead.

Source: Biotechnology Super Panel Talks Development, Marketing And The Future