Plant-Made Pharmaceuticals And The Democratization Of Health Care

| About: iBio, Inc. (IBIO)

iBio (NYSEMKT:IBIO) has developed the technology for a fully automated and deliverable platform using transient gene expression in non-transgenic plants to rapidly produce high levels of target proteins for all classes of biologics faster, cheaper, and better than traditional incumbent methods. The plants are easily and reliably scaled-up in low cost, fully contained controlled growth chambers in a certified Good Manufacturing Practice (cGMP) pilot facility to produce high yields of recombinant protein in the plant biomass with consistency and on target.

The inventor and exclusive collaborating lab partner, Fraunhofer Center for Molecular Biotechnology, is a leader in the Plant-Made-Pharmaceuticals, and a pioneer of plant-made pharmaceutical research dating back over 20 years. Using the Ibiolaunch platform, Fraunhofer has successfully expressed complex proteins for which other systems have failed. They subsequently fine tuned the process to incorporate optimal growing conditions for the plants with respect to maximum protein yield, while greatly reducing the burn rate and overhead costs for IBIO.

The capabilities of the Ibiolaunch platform are diverse, having produced significant preclinical results across the complete range of agency pathway indications pertaining to recombinant proteins (viral disease vaccines, parasitic pathogen vaccines, therapeutic vaccines, monoclonal antibodies mAb's, both humanized and chimeric, enzyme replacement, plasma derived proteins and growth factors).

The Ibiolaunch is the murder weapon of bio-reactors as the plant itself is effectively the bio-reactor in the protein expression process. Additional elements of improvement include the removal of post-translational modifications, which can account for over 50% of the manufacturing costs, and a 75% reduction in production time and the risk of contamination and infections agents removed. Producing a target in plants opens up the market to a potential patient population previously allergic to recombinant protein therapeutics traditionally produced in Chinese Hamster Ovary cells.

Ibiolaunch for License

IBIO has licensed this platform to the Brazilian company, Fiocruz, operating collaboratively with the Brazilian Health Ministry, for the commercial production of a Yellow Fever vaccine. Fiocruz will be building a facility to house the Ibiolaunch technology, and it is highly likely the company will invest in additional Ibiolaunch produced candidates. This facility will need to be furnished, and IBIO is actively engaged in discussions, with GE (NYSE:GE) Healthcare, among others, pertaining to a deliverable package model that can be replicated efficiently. The demand is such that IBIO will not have to pay for the factory; it will be accomplished by third party financing and/or the licensee, the equipment for which will probably be provided by General Electric Healthcare. The cost of building a facility for the commercial production of an Ibiolaunch produced target is also 25% the cost of a similar facility using current methodology, and delivered in a year and a half, and cGMP at roughly $65mm.

Fraunhofer Collaborators

IBIO's lab and collaborating partner, Fraunhofer Center for Molecular Biotechnology, has successfully demonstrated that the Ibiolaunch is the platform to produce all current and future biologics, and has comprehensively patented the technology and related methods. For the current stage of the company, having two highly successful influenza Phase 1 human clinical trials and a breadth of promising preclinical research, the supporting cast is overwhelmingly significant and includes: The Bill and Melinda Gates Foundation, Department Of Defense (Defense Advance Research Projects Agency, Defense Threat Reduction Agency), Fraunhofer Institute, and Sabin Vaccine Institute. See below for a complete list of grants and non-dilutive funding:

Third Party Investments in Ibiolaunch: Vaccine Applications

The Bill & Melinda Gates Foundation and the Sabin Vaccine Institute

  • $33.3 million for Ibiolaunch platform applications
  • Avian Influenza Vaccine - $ 11.4 million
  • Malaria Vaccine - $ 13.3 million
  • Sleeping Sickness Vaccine - $ 8.2 million
  • Hookworm Vaccine - $ 0.4 million

United States Government

  • $37.4 million for Ibiolaunch platform applications
  • Accelerated Manufacturing Program - $ 14.8 million
  • Influenza Vaccine - $ 4.4 million
  • Plague-Anthrax Combination Vaccine - $ 18.2 million
  • Development of Chemical Reagents - $1.5 million

Ibiolaunch and Bio-Defense

Due to the versatile nature of the Ibiolaunch platform in terms of cost, speed, scalability, and surge capacity, this platform is valuable to the government in its ability to counter an epidemic or pandemic as well as a bio-terrorism threat. A quintessential function of government is the protection of its citizens, and leveraging the Ibiolaunch platform can result in both increased preparation and responsiveness in this regard. Using the fully contained and completely automated process, a target could be produced on an aircraft carrier or at the site of an epidemic/pandemic outbreak or bio-terrorism attack.

Additionally, the Ibiolaunch technology enables a bio-equivalent vaccination to be produced using less antigen, and in a singular regimen. The company has performed the related preclinical work using Department of Defense funding to provide a vaccine candidate for an anthrax/plague combination vaccine that requires only one dose. The traditional protocol is a 6 shot program over a period of 18 months. The Ibiolaunch is able to overcome these inherent limitations using a patented lichenase protein fusion technology for production that also offers greater half-life and increased thermostability.

These efforts have advanced in accordance with FDA guidance pertaining to the 'Animal Rule' and related testing and empirical data pertaining to non-human primates conducted by Fraunhofer. Additional non-dilutive grants from the Department of Defense are highly likely for the continued advancement and validation of the Ibiolaunch platform to protect the citizens and members of the Armed Forces of the United States as well as our allies. In proving the aspects of surge capacity, scalability, and greatly reduced production time, the platform has successfully been able to withstand 'live fire' testing, where the has provided Fraunhofer with a target and a time frame for the Ibiolaunch to produce the target, most notably the Defense Advance Research Projects Agency (DARPA) Accelerated Manufacturing of Pharmaceuticals Program. The was satisfied with the results as evidenced by additional and later stage grant money. These functional properties are also applicably relevant to newly emerging strains of a virus, or a pandemic/epidemic.

Below are the patents related to the Anthrax/Plague vaccine that have emerged from the collaborative efforts between Fraunhofer and the using the Ibiolaunch:

  • US 20110142870
  • US 20110027304

Ibiolaunch and Subunit Vaccines

In addition to the funding provided above, Fraunhofer has received funding from the Bill & Melinda Gates Foundation for development of various vaccines based upon the Ibiolaunch including an experimental vaccine for H5N1 avian influenza. A Phase 1 clinical trial of a vaccine candidate for H5N1 was initiated in December 2010 and the results of this trial, are on target and as expected, and will be released in the journal Human Vaccines and Immunotherapeutics Volume 8, Issue 5 May 2012. In addition and as stated above, the Gates Foundation has provided substantial grants for the advancement of vaccine candidates to provide "Global Access" to vaccines to reach Millennium Development Goal requirements including Malaria, African Sleeping Sickness, and Hookworm.

While providing vaccines for Neglected Tropical Diseases might not have been profitable using incumbent methods, production at 10% of current costs might increase those margins; for example a malaria vaccine that is highly efficacious and costs $10 to produce. The Gates Foundation is funding the advancement of a Malaria vaccine with GlaxoSmithKline (NYSE:GSK) currently in stage 3 human clinical trials that is a promising candidate, however it has only proven its ability to protect 40%-55% of the population sampled and efficacy is reduced over time. First results from the ongoing Phase 3 clinical trial can be found here.

A Malaria vaccine produced on the Ibiolaunch will be cheaper and quicker to produce with the potential to be twice as efficacious because, as has been the focus of the grant by Gates and efforts by Fraunhofer, the most effective way to eradicate the disease is by blocking the transmission of the sex cycle of the carrying parasite. A candidate is currently under development and formulation for an Ibiolaunch produced malaria vaccine for a Phase 1 clinical trial funded by the Gates Foundation based on the above criteria.

There is currently no FDA approved Malaria vaccine and current marketed malaria drugs are subject to accumulated resistance which has a negative environmental impact. The benefits derived by producing this vaccine on the Ibiolaunch are increasingly prevalent when combined with the properties of increased half-life and thermostability. Waste by contamination from transport by cold-chain refrigeration requirements can account for over 30% loss of deliverable doses in providing biologics to the respective geography. Regarding certain biologics produced on the Ibiolaunch, the cold-chain requirements are assuaged potentially limiting the amount of waste and leading to additional cost reduction.

  • Malaria Patent: US 20110314575
  • Trypanosomiasis, African Sleeping Sickness Patent: US 200903246

Shine a Light on the Light

There is a date on the calendar for a near-term, positive catalyst. The likely approval of the Protalix (NYSEMKT:PLX) candidate for the treatment of Gaucher's Disease, Prescription Drug User Fee Act (PDUFA) date for FDA approval of May 1, 2012 is significant for the Plant Made Pharmaceutical space. This will be the first PMP drug that is FDA approved for use in humans. The FDA guidelines for the manufacturing of biosimilars gave way to an increased demand in reduced cost in production. The approval of the PLX candidate will have a similarly wide-spread positive effect in the Plant Made Pharmaceutical space pertaining to plant protein expression platforms.

The PLX story began with the failure of Genzyme's treatment for Gaucher's Disease. Specifically, the failure was linked to the mammalian cell production methods which lead to contamination of the only approved treatment, Cerzyme. The contamination was a live demonstration of the failures of the existing methodology and infrastructure. This created a global shortage and roughly a billion dollars in losses for the company, its investors, and ensuing health care costs. If not for this event, advancement of a PMP candidate might not have been presently possible. This event was also necessary for the "fast-track" FDA approval status for Ulypso, the Protalix "orphan drug" designated Gaucher's Disease treatment.

During the shortage, patients were able to continue Ulypso treatment via 'compassionate use' because the PLX drug worked so effectively with minimal adverse events. Expanded access, sometimes called "compassionate use," is the use of an investigational drug outside of a clinical trial to treat a patient with a serious or immediately life-threatening disease or condition who has no comparable or satisfactory alternative treatment options.

The PLX drug for the treatment of Gaucher's Disease is a "gateway drug" for the inevitable paradigm shift into Plant Made Pharmaceuticals. The PLX candidate's approval will flip the switch and will generate renewed interest in this space. IBIO is extremely well-positioned given results to date demonstrating bio-equivalency across a comprehensive and diverse range of biologics and difficult to produce recombinant proteins in a multi-billion dollar space.

The fact that there is a re-pricing of IBIO based on the PLX binary event is the market in effect, determining the high likelihood of additional IBIO commercialization and future success based on the superiority of the technology and advancement feasibility within the agency approval pathways. The first FDA approval of a PMP for use in humans ostensibly creates a very real market for PMP's. The Ibiolaunch platform is relevant to all currently marketed therapeutic proteins as well as new drug discovery. The company is substantially undervalued.


Medicago (OTC:MDCGF) is another player in the PMP space. Their plant expression platform, also using tobacco plants, is founded on and limited to Virus Like Particles utilized for subunit vaccine production. Medicago has recently signed a licensing deal with Japanese firm Mitsubishi Tanabe Pharma for the commercial production of a rotavirus vaccine. The interest in new technologies for the commercial production of pharmaceuticals, both more effectively and at a discounted price, is increasing and countries facing economic contraction and/or the desire to enter into commercial production and manufacturing can become a global player, where the larger pharmas have been hesitant or opted not to be first. The Ibiolaunch can do everything Protalix and Medicago can do, and more - faster, cheaper, and better.

Dr Yusibov, the most highly respected academic in plant-based research, has plans to 'ubiquitously express' the progress and applications of the Ibiolaunch platform across the globe, bimonthly for the next 6 months to distinguished audiences. He will intellectualize the emotion and attract additional non-dilutive funding and grant money as well as help with prospective commercialization for IBIO.

With global contraction, rising deficits, increasing health care costs and associated demands from demographical shifts, expanding geography demanding access, and a move towards recombinant protein based medicine; IBIO offers a solution that also correlates to the general movement in the health care industry in the outsourcing of research and development to fill depleted pipelines and compensate for expiring patents.

Overcoming Inherent Limitations: Plant-Produced-Plasma

The Ibiolaunch can express targets that incumbent methods simply cannot. For example, IBIO has produced plasma in plants, that demonstrates bio-equivalency compared to what is currently available achieved using traditional methodology by a company such as ViroPharma (VPHM) or CSL Behring. Traditionally, plasma related treatments require human donors for formulation and development and ensuing, expensive post-translational modifications.This results in a small amount of purified plasma and contributes 50% to the production costs and the product is very high cost. Products made from human plasma may contain infectious agents, such as viruses and, theoretically, the Creutzfeldt-Jakob (CJD) agent that can cause disease. This major risk associated with plasma based therapies is effectively rendered obsolete by Ibiolaunch production as is the inherently limited supply.

Plasma treatments are very expensive, difficult to produce, and not available to a comprehensive global patient population. No other platform of any constitution has exhibited the ability to produce a plasma product without individual donors. While revenue is high for plasma treatment producing companies, the profit margins are relatively minimal especially concerning the inherent risk. There are currently indications for which there is no approved therapy.

Companies in the plasma space have been actively pursuing expanding their labels and expanding their approval geography. Capacity upon these aforementioned expansions is unattainable as it stands currently. No more shortages in the supply chain; the Ibiolaunch platform for production of plasma products solves all of these problems. Dr. Yusibov has successfully demonstrated preclinically that Ibiolaunch produced plasma products are bio-equivalent. Licensing deals in the plasma space are generally accompanied by higher recurring revenue. A deal in this space is highly likely for IBIO.

Ibiolaunch vs Incumbent Methods for the Production of Monoclonal Antibodies

The Ibiolaunch has successfully expressed both humanized and chimeric monoclonal antibodies, Paviluzumab and Rituximab, respectfully. Astrazeneca (NYSE:AZN), parent of MedImmune, currently markets Paviluzumab for Respiratory syncytial virus and Genentech, owned by Roche (OTCQX:RHHBY), currently markets Rituximab for several indications. These treatments are extremely high priced and difficult to produce. The Ibiolaunch can lower the manufacturing cost of mAb's and reduce the risk, capital outlay, annual fixed operational cost.

Let's assume a successful commercialized and marketed monoclonal antibody is generally at a average production capacity of 1000kg per year. The total annual cost of producing mAb's in a facility that uses the Ibiolaunch based on a production output of 1000kg of product translates to $35-$45 per gram. The average cost of producing mAb's via fermentation of 1000kg product yield per year is $125 per gram not including costs or associated risks of contamination, by virus or pathogens obsolete to the Ibiolaunch opportunity. Less fixed cost translates into large and scalable production capacity and drastically reduced prices for patients and health care providers as well as increased profits for the licensee.

The majority of costs in producing mAb's is concentrated in the bio-reactor related upstream processing, unrelated to the Ibiolaunch opportunity. Tobacco plants are cheaper to grow than cell cultures in bio-reactors. The chambers where the tobacco plants are grown are also less expensive than the bio-reactors and related componets necessary for production using traditional methods. As the production output of a monoclonal antibody increases linearly beyond 1000kg per year, the reduction in cost of production on the Ibiolaunch increases geometrically. There is no doubt that pharmaceutical companies will find these figures warrant adoption of the Ibiolaunch.

As an investment by biotech and pharmaceutical companies, there is no question about the value of the Ibiolaunch platform. A result of the pending demand of the Ibiolaunch platform by the industry should lead to an increase in the value of the company and its share price.

Disclosure: I am long IBIO.

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