Q&A: The year that was; the year that will be
In this season of gift-giving, we wanted to be generous, so DDNews posed a series of questions to two CEOs for this Q&A—Ron Squarer of Array BioPharma Inc. and Dr. Brad Thompson of Oncolytics Biotech—looking at the recent past and near future of cancer therapeutics and life-sciences business trends.
Array BioPharma is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small-molecule drugs to treat patients afflicted with cancer. Six Phase 3 studies on Array-invented drugs, binimetinib (partnered with Novartis) and selumetinib (partnered with AstraZeneca), are currently enrolling patients with cancer.
Oncolytics Biotech is a biotechnology company focused on the development of oncolytic viruses as potential therapeutics for use in a broad range of cancers. The company is conducting clinical studies using Reolysin, its proprietary formulation of the human reovirus, in some of the most prevalent forms of the disease, including lung, colorectal and pancreatic cancers. Oncolytics’ clinical program includes a number of human trials at a variety of stages, including a Phase 3 trial in head and neck cancers.
DDNews: What do you see as the most significant advances in pharma, life sciences and biotech in 2014, and how will these trends continue in the coming year?
Brad Thompson: The most significant advance was the increasingly widespread adoption of genetic testing in patients to determine if a treatment being considered will work or not. The era of personalized oncology treatment is upon us. I anticipate that soon a patient will be tested not once, but before every treatment cycle in order that they receive the best possible therapy.
The explosion in immune-based therapy for cancer is [also] very significant.
Ron Squarer: We have seen impressive progress this year in immunotherapeutic approaches to oncology treatment and, consequently, an increased focus on immunology both in the industry and corresponding media. This is exciting to see because it’s an example of science and technology evolving to the point where the impact is going to be tangible for patients. At the same time, the field of immunology has seen buzz-generating “revolutions” in the past which haven’t lived up to their hype. That disappointment comes from the ultimate benefits being more limited than expected.
Immune approaches will be very useful in certain types of cancers, and we are finding that within those cancers when patients benefit, they benefit for a long duration of time. Still, we are careful not to lose sight of the fact that many cancer patients will not benefit from these products, at least in the near-term. In 2015, you can expect this trend to lead to a shakeout as more is learned about the potential benefits and limitations for these therapies and for those associated companies without the products to support the buzz.
On the flip side, 2015 presents an open opportunity for other approaches to cancer treatment to provide some positive surprises. Although less attention is being paid to them at this time, it does not mean that there are not highly important and innovative approaches out there driven by great science unrelated to immunology. These approaches have been ramping up momentum and could produce big results in the near future and certainly next year.
DDNews: Are these trends likely to continue in the coming year?
Thompson: Yes, And both advances—immunotherapeutics and genetic testing—will be used together, as the genetics of the immune system will be used to predict which patients will be most likely to respond to an immune therapy.
DDNews: On the business side, can we expect initial public offerings and merger and acquisition deals to continue at their present pace? Pick up? Slack off?
Squarer: Another huge development in 2014 has been the incredible proliferation of biotech IPOs. It seems like over the past year there has been a new public company minted every week in our industry, reinforcing the fact that science, innovation and entrepreneurship are alive and well. It’s a strong indicator that we are currently in an era where people willing to risk capital and people willing to innovate are collaborating to advance medicine.
As has been observed before in other markets with a surge of new IPOs relatively close to each other, there will be a time when many of these companies are going to have to return to the capital markets for additional funding. This wave of recapitalization can be expected in 2015 and it will result in a dramatic selection of winners and losers. While the environment will remain healthy for investment, the pace of IPOs is likely to slow as the market becomes much more selective.
The kind of value and assets attracting big pharmas and big biotech are companies commercializing specialty medications on their own or progressing towards that. Therefore, companies are either acquired on their way to their value realization, or at some point, they become too big or too successful that it’s no longer likely for them to be bought. As we cross into 2015, this trend of mega-acquisitions shows no sign of fading and companies will remain selective and very much about near-term or immediate commercial potential.
Thompson: We believe IPOs will decline in number in 2015, but M&As will pick up steam.
DDNews: Big biotechs such as Celgene and Biogen are sometimes referred to as the next “Big Pharma.” What do you foresee for this trend (if it is one)?
Thompson: The transition from biotech to Big Pharma usually occurs when a company has sales from more than one therapeutic area. I don’t think there really is a trend as it is so rare.
Squarer: We are also seeing these companies too big to be bought growing with increasing strength and speed. Two examples of this are Biogen Idec and Celgene, whose size and financial resources are now so great that they legitimately compete with Big Pharma. Biotech companies like these that are worth tens and tens of billions of dollars are now beginning to be the new Big Pharma. In 2015, biotech will continue to grow and major big biotech players will emerge as new giants in the industry.
Ron Squarer has served as CEO and a member of the Array BioPharma board of directors since April 2012. Squarer has extensive commercial, development and executive leadership expertise from a 20-year career in the pharmaceutical industry. Most recently he served as chief commercial officer at Hospira Inc., a global pharmaceutical and medical device company, where he also had previously served as senior vice president of global marketing and corporate development.
Brad Thompson, Ph.D., has held the positions of chairman of the board, president and CEO of Oncolytics Biotech since April 1999. He has provided leadership to various organizations within the biotechnology sector for more than 20 years. Prior to his role with Oncolytics, he was the CEO of SYNSORB Biotech from 1994 to 1999. From 1983 to 1994, Dr. Thompson worked in a senior role at the Alberta Research Council.