News Roundup: Biotech Funding and LDT Regulation

With so many developments at the intersection of genomics and the law, there is often a variety of interesting stories that, for one reason or another, don’t find their way into a full-length posting on the Genomics Law Report. In this post we recap several recent key developments and, at bottom, round up all of the recent tweets from @genomicslawyer.

Biotech Funding: No Bubble, New Models and the IPO Option. Despite speculation that a recent rise in venture capital investments is indicative of a bubble, to be followed soon by a plunge in available investment capital, venture capital investments in the life sciences are holding steady, both in total dollars and in the size of an average financing. Thus, says Bruce Booth, a partner at Atlas Venture and author of Life Sci VC, there appears to be no bubble to debate, at least not in the life sciences. Booth observes that overall funding is “down considerably from the recent highs in 2007 and 2008” and, while other industries may be experiencing fewer but larger financings, “the data doesn’t support a frothy market for LS venture financings these days.”

Still,biotechnology innovation is neither easy nor cheap, leading venture firms to explore new product development and financing models. Large pharmaceutical companies, meanwhile, are also seeking to reinvent how they develop products in the face of a looming “patent cliff”. As the patents protecting many branded pharmaceuticals begin to expire, as will happen with Pfizer’s cholesterol drug Lipitor later this year, sales of these lucrative drugs will decline due to aggressive competition from generic pharmaceutical manufacturers. While not everyone is convinced that the patent cliff is a real phenomenon, real or not, big pharma certainly appears to be facing pressure to find new ways to identify and develop therapeutics.

The result, writes Ryan McBride of Fierce Biotech, is that VCs and big pharma are joining forces.

Pharma giants like Eli Lilly and Monsanto are collaborating directly with venture firms in an attempt to develop new products more efficiently. As McBride reports, Eli Lilly has announced plans to invest up to $150 million in external venture capital funds (including CMEA Capital) and Monsanto is collaborating with Atlas Venture (Booth’s firm) to identify new and early-stage biotech investment opportunities. Another example of VC/pharma collaboration is Enlight Biosciences, the drug discovery and development company founded by PureTech Ventures and funded by six major pharmaceutical companies (Abbott Laboratories, Eli Lilly, Johnson & Johnson, Merck, Novartis and Pfizer).

Even if some of these alternative biotech product development models prove to be successful, the end game for early-stage biotech investors remains murky. In his most recent post, Booth looks at the latest crop of biotech IPOs (since January 2010). Far from being the exit event early-stage investors might have hoped for, Booth finds that recent IPOs require significant additional participation from pre-IPO investors, affirming the prevailing wisdom that, at least in biotechnology, “IPOs are just financing events, and tough ones at that.” Just another reminder that an IPO may not be the right approach for every company.

LDT Regulatory Debate Continues. Since announcing last summer its intention to dramatically expand its oversight of laboratory developed tests (LDTs) by regulating them as medical devices, the FDA has yet to publicly propose a specific plan to bring LDTs under its purview. That does not mean, of course, that the issue has died. The FDA, Congress and industry groups are all considering several alternative approaches designed to modify – and hopefully to improve – how LDTs are regulated.

In a recent Boston Globe op-ed, Mara Aspinall of On-Q-ity and Brook Byers of Kleiner, Perkins, Caufield & Byers, “propose the creation of a dedicated FDA Center for Advanced Diagnostics Evaluation and Research [CADER] staffed with molecular diagnostics experts from all the relevant fields” as a preferred alternative to regulation of molecular diagnostics (many of which would likely qualify as LDTs) as medical devices within the existing FDA regulatory infrastructure. Although Aspinall and Byers do not refer to it by name, their proposal is another effort to promote a piece of legislation under development within the office of Senator Orrin Hatch (R-UT) that would create a separate regulatory pathway for so-called “advanced personalized diagnostics,” including the creation and funding of CADER within the FDA. Both Aspinall and Byers have previously indicated their support for the Hatch bill, which has yet to be introduced in Congress.

Meanwhile, at least one laboratory group is set to ask Congress to take a very different approach to LDT regulation.  According to Pharmacogenomics Reporter, the American Clinical Laboratory Association has “conceptually agreed” to ask Congress to modify two pieces of existing legislation – the Federal Food, Drug, and Cosmetic Act (FFDCA) and the Clinical Laboratory Improvement Amendments (CLIA) – to specify that the regulation of LDTs will be overseen by the Centers for Medicare & Medicaid Services (CMS) and not by the FDA. As Turna Ray writes for Pharmacogenomics Reporter, “ACLA’s plan to take its case to Congress suggests a deepening rift among disparate players in the diagnostics industry about how tests based on emerging technologies and marketed under complex business models should be regulated.”

Back in January, when we previewed the year ahead in personal genomics, we wrote the following:

Such a rapidly-moving field poses substantial challenges for overburdened lawmakers and regulators even in the best of political environments and 2011, with its newly divided Congress and promise of contentious battles over healthcare reform and other key issues, hardly qualifies as an ideal political environment. Never say never, but those who would bring legislative and regulatory change to personal genomics are likely to spend 2011 primarily laying the groundwork for 2012 and beyond.

With more than one third of 2011 in the books, and both a Congressional recess and the FY2012 budget battle looming, there seems little cause to alter that analysis.

Roundup of tweets from the intersection of genomics, personalized medicine and the law:

  • RT @FierceBiotech: Clinical, regulatory jobs top biotech’s “must-hire” list. http://bit.ly/m2zmKT
  • RT @LifeSciVC: Dirty little secret of Biotech IPOs: Insider participation http://bit.ly/inPyW0
  • 2011 CAP Policy Mtg live tweets from @CAPDCAdvocacy, incl. Gutierrez re: LDT oversight (though apparently not saying anything new so far).
  • Additional detail from @Erika_Check on how DNA confirmed Osama’s death: http://bit.ly/kPHTkX
  • FDA, FCC both working to improve development, approval process for wireless devices: http://bit.ly/jJEEez
  • RT @InSequence: Illumina Starts Shipping 600 Gb HiSeq Reagent Kits; Takes First Orders for MiSeq: http://bit.ly/m4M1ji
  • RT @InheritedHealth: We are excited to announce that @InformedDNA has acquired @InheritedHealth: http://ow.ly/4J7kM
  • Wide-ranging overview of genomic data protection developments in @GenomeTechMag, incl. in DTC context: http://bit.ly/iDvXDt
  • GLR Post: Forensic DNA Fights Terrorism: http://bit.ly/kiFcDs
  • More on the Bin Laden DNA ID. It happened fast, but not *that* fast, according to @NerdyChristie: http://bit.ly/jHf9Lz
  • Brook Byers & Mara Aspinall (two Hatch Bill backers) argue for new MDx regulatory, reimbursement model http://bit.ly/mFSWVM
  • Part of the problem in Germany is that recent law (the GenDG) is so unclear. More here: http://bit.ly/gXMgkg
  • RT @dgmacarthur: Germany debating changes to laws on preimplantation genetic diagnosis: http://bit.ly/k58SoX (from @PHGFoundation)
  • Lab Group to Ask Congress for Statutory Changes to Keep LDTs Under CLIA: http://bit.ly/mKfoNg
  • “We embrace openness,” says $PACB in describing new SMRT data analysis software: http://bit.ly/kdEnKH HT @dgmacarthur
  • RT @PHGFoundation: Progress and challenges for the Encyclopedia of DNA elements http://bit.ly/luOUB9
  • Bin Laden was identified by matching DNA to sample taken from sister’s brain: http://bit.ly/mtmNsW HT @MishaAngrist @RebeccaSkloot
  • RT @dgmacarthur: Today is the last day to submit comments to the FDA on DTC genetics! A reminder from @genomesunzipped: http://bit.ly/lsUJ93
  • RT @PGxReporter: ASCO and CollabRx Partner to Develop Online Apps for Cancer Treatment Targeted to Molecular Subtypes: http://bit.ly/jEKMqH
  • Blackstone Entrepreneurs Network launches in NC’s RTP: http://bit.ly/dVnjRJ HT @DukeGEN cc @JCainHart
  • NIH trims grants 1-3% in wake of budget cuts: http://bit.ly/eNkVM4 by @ScienceInsider
  • Re: Kathy Hudson talk, @DNAlawyer reports “7 Proposed reforms to human research participant protections (to be pub. soon), incl. #IRBreform”
  • $MYGN to acquire Rules-Based Medicine for $80M in attempt to expand companion/molecular Dx portfolio: http://bit.ly/m89GPG
  • Incl analysis from @dgmacarthur RT @ldtimmerman: PacBio, after 7 years and $580m, ships 1st commercial DNA sequencer http://bit.ly/kdMW93
  • RT @MichelleNMeyer: live tweeting symposium on Medicine & Culture: Genetic Determinism Then & Now: Confronting Legacy of Eugenics #Ackerman
  • Will Hudson provide update today on NIH’s genetic test registry? http://bit.ly/esM7PG Hope @DNAlawyer will fill us in.
  • $LIFE fell just short of Q1 revenue estimates: http://bit.ly/ePV179 $ILMN didn’t: http://bit.ly/gC01NA
  • PGP Newsletter #5: congrats to @geochurch on Bower Award. Exciting times ahead for @PGorg: http://tinyurl.com/62a23pq
  • Deadline Monday. MT @23andMe: Public Comments Due on Possible FDA Regulation of DTC Genetic Testing: http://bit.ly/hzz4ja
  • NY leaders seek new biotech development model. (Rightly) looking to @ncbiotech for guidance. http://bit.ly/g1aewp @GENbio
  • FDA rejects Aricept patch for Alzheimer’s disease: http://bit.ly/hhq9Yg
  • SCOTUS hearing case on Rx data-mining today: http://n.pr/f78dnU Likely broader ramifications for commercial data-mining.
  • RT @LifeSciVC: RT @biotechworld: VCs, Big Pharma join forces to tackle market challenges http://bit.ly/gfec8f
  • Newsweek piece (http://bit.ly/gBlnN9) about BGI includes eye-popping statistics about Chinese seq giant & hints of what’s still to come.
  • U.S. Effort to Remove Drug CEO Jolts Firms: http://on.wsj.com/i6hMi2 via WSJ re: gov’t attempt to remove $FRX CEO
  • RT @dgmacarthur: Very cool – sequencing tech startup Oxford @nanopore has raised £25 million/$41m in new funding: http://bit.ly/f4Iyr9
  • Today is Genetic Equity Awareness day in VT: http://bit.ly/hCqYaV More momentum for this legislation? http://bit.ly/i9fIT5
  • More from WB: initiates coverage on $GNOM (outperform: http://bit.ly/hUbvJG) & $PACB (market perform: http://bit.ly/h76j0a)
  • WGS market analysis fr William Blair, incl. $GNOM, $LIFE, $ILMN & $PACB: http://bit.ly/emYypW Overall, very positive.
  • Very nice. “ALS Study Shows Social Media’s Value as Research Tool”: http://on.wsj.com/heMK3k by @patientslikeme paper: http://bit.ly/guma4c
  • Fantastic! RT @girlscientist: IDNA Day at @HudsonAlpha–public welcome to walk possibly world’s largest DNA molecule: http://is.gd/O0feLu
  • More on $LIFE/$ILMN advertising. RT @matthewherper: DNA sequencing firm apes Apple’s computer ads. http://ow.ly/4FE23
  • Now: “Genetic knowledge, whether the high priests like it or not, is going to be a crowd-sourced phenomenon.” (4/4)
  • Then: “personalized genomics will struggle to say anything useful at all, for the simple reason that it will be too personal.” (3/4)
  • When it comes to personalized genomics, Matt Ridley (@mattwridley) has clearly had a change of heart over the past 6 mos. (2/4)
  • Compare “The Failed Promise of Genomics” http://on.wsj.com/dnWRQO & “Your Genes in an Envelope? More, Please” http://on.wsj.com/hU8yqa (1/4)
  • RT @ldtimmerman: VCs turn up the heat on Capitol Hill to get FDA to move faster, be more predictable http://bit.ly/ePp2AD
  • RT’ing = preaching to converted? RT @ldtimmerman: BayBio’s annual conference, tweet by tweet. http://bit.ly/ghc53a #baybio2011
  • EMRs for genetic research. Great potential but sig current EMR limitations: http://bit.ly/hYdV0o summary: http://bit.ly/eBGT9u HT @drjonboyg
  • MT @EdwardWinstead: MassGenomics discusses consent protocols & counseling w/r/t WGS of 2 cancer patients http://bit.ly/i07BYk cc #IRBreform
  • Great event. Thx to @zittrain for tremendous panel moderation. RT @PGorg: Ethics & genetics in the digital age http://hvrd.me/gOOkLO
  • RT @InVivoBlogChris: In Search of a Golden Mean: balancing innovation and execution in biopharma: http://bit.ly/eiU1rv
  • Scientists Must Change Their Culture to Bring About Better Healthcare: http://bit.ly/gWl9Pq by @finchtalk in @Xconomy, recapping #sagecon
  • Congrats! RT @markgfh Recombination procedure worked! Anna Martha Henderson born this morning, a robust 9lb 2oz!
  • RT @FierceBiotech: VC report: Rounds get fatter as the number of deals shrinks. http://bit.ly/idbscH
  • RT @MishaAngrist: The State of Mutation Curation featuring @dgmacarthur http://bit.ly/g8hic5
  • Most damning to “genetics crisis” argument? @dgmacarthur & @lukejostins taking apart Latham’s rebuttal in comments: http://bit.ly/ffvsTi
  • Debunking some “totally & completely absurd” hype & fear re: mobile health regulation: http://bit.ly/eSBQNa @mobilehealth
  • RT @genomesunzipped: The Genome Hasn’t Failed, or The Many and Varied Errors in a Genetic Denialism Article http://bit.ly/gH3UWm
  • More here: http://bit.ly/fTkxlD MT @dgmacarthur: New Ion Torrent attack ad: http://bit.ly/hDwyqI
  • RT @matthewherper just got served an ion torrent ad while reading questionablecontent.com. Don’t know what this means, but feel weird abt it
  • RT @FierceBiotech: CROs scramble as Big Pharma lines up strategic partnerships. http://bit.ly/g5Arow
  • RT @23andMe: Call to Participate in a New Study on Social Networking and Personal Genomics: http://bit.ly/fYI9Ze
  • Discussion of educating vs. informing ignores longitudinal science com. Not every story need be self-contained. #soNYC
  • Schmidt recs skepticalscience.com for those who want one line rebuttals for Crazy Uncle Joe’s science denialism #soNYC
  • Ropeik: Default is not to trust. “To be wary is to survive.” How to build trust? Circumstances, esp fear #soNYC
  • Schmidt: it’s a good thing we don’t have automatic trust in pub/priv institutions. But, more diff to get public health/sci msgs out. #soNYC
  • Schmidt: ppl we need to reach are ones in middle, whose minds aren’t made up & who know a sound bite != whole story #soNYC
  • Agreed, esp in policy roles. RT @LouWoodley: Science needs to be aware of who it picks as its spokespeople – some are polarising #sonyc
  • Schmidt: why don’t scientists just stay in ivory towers & ignore controversy? When Congress drags you to DC, you don’t have a choice. #soNYC
  • Now it’s time for Q&A at #soNYC. If you’re watching online, Tweet your questions at those of us in the room.
  • Schmidt: Republicans today don’t not like science. They love science. They just don’t like the results. #soNYC
  • Gavin Schmidt (NASA) makes great pt: climatologists largely reluctant & relatively recent public policy participants #soNYC
  • #sonyc getting underway w/ @LouWoodley, @j_timmer & many, many more. You can follow along live: http://bit.ly/gacfov
  • Excited to have found my way to Weiss 305 @ Rockefeller for first #soNYC event. Great & growing crowd.
  • RT @JohnCFierce: Duke, Coulter Foundation create $20M endowment for translational research work http://bit.ly/dNGWTS cc @JCainHart
  • GLR Post: Next-Gen Sequencing Heading to Madison Avenue? http://bit.ly/gKszNF
  • RT @LifeSciVC: Big Academic-Pharma Deals: A threat or opportunity for early stage VC? http://bit.ly/f7lnAW
  • Good opt-in approach RT @blaine_5: Genetic genealogy company DNA Heritage ceases operations & transfers to FTDNA: http://tinyurl.com/3bsczbv
  • RT @dgmacarthur: On the advantages of the @CompleteGenomic genome factory approach: http://bit.ly/g7ovb0
  • RT @genomesunzipped: I’m an Ion Torrent! Next-generation sequencing companies adopt viral advertising strategies: http://bit.ly/ezluS6
  • RT @matthewmarkus: “The Practice of Law in the Era of ‘Big Data'” http://goo.gl/AFzPO via @bigdata
  • RT @FierceBiotech: When nanotech meets biotech. http://bit.ly/eQPZOg
  • RT @InSequence: Source BioScience Expanding Next-Gen Sequencing Services, Moving into Cancer Dx: http://bit.ly/dN8ioS
  • RT @CompleteGenomic: new blog post covers 1st impressions & benefits of a factory approach to human genome sequencing (http://bit.ly/fDLiDI)
  • Spontaneous #IRBreform proto-conference demos power of @twitter. Challenge: integrate w/ efforts of #sagecon, others to turn ideas to action
  • Absolutely. Same with work overseas. But the solution is not to drive everything away from public funding. That ignores need for #IRBreform
  • Course, this is what we should have at present, so question is how we get there from here. Think involving individuals will help #IRBreform
  • Ultimate need: dispense with pro forma IRB oversight & consider appropriate protections for specific individuals/projects #IRBreform
  • (Incidentally, the fact that these conversations are even happening is a major improvement over where we were a few years ago #IRBreform)
  • Thankfully, we have some groups already helping diversify, including @PGorg, @genomera, @DIYgenomics, etc. NIH, others are aware #IRBreform
  • Traditional model (inc. no return) works well sometimes. Other times (need for GxE linked data, citizen science, etc) it doesn’t #IRBreform
  • What we need is more diversity in how scientific research, especially in personalized medicine, is conceived. #IRBreform
  • Parents favor genetic tests that might detect children’s susceptibility to common diseases: http://1.usa.gov/edsvJe via @genome_gov
  • Where did FDA say that? RT @bmahersciwriter: Despite interest in DTC genetic testing for kids, FDA says it’s a bad idea http://bit.ly/efYyDy
  • Weekly Roundup: FDA Regulations (510k, Dx, WGS & EHR), Science Funding & Newborn Screening: http://bit.ly/h89Lvc
  • NYT: guidelines allow for earlier definition, stratification of Alzheimer’s: http://nyti.ms/fm1whM
  • MT @bmahersciwriter: Look out, cliff! RT @matthewherper: None of 10 most popular drugs in US are brands: http://ow.ly/4Dhi2