Financing and Coordination of R&D for neglected diseases: Challenges and opportunities Consultative Expert Working Group on Research and Development Open Forum 6 April 2011 WHO, Geneva Dr. Bernard Pécoul Executive Director, DNDi

for neglected diseases A Fatal Imbalance Tropical diseases (including malaria) and tuberculosis account for: 12% of the global disease burden Only 1.3% of new drugs developed (1975-2004) Tropical diseases: 18 new drugs (incl. 8 for malaria) Hardly anything in the pipeline 1.3% 21 new drugs for neglected diseases Tuberculosis: 3 new drugs 98.7% 1,535 new drugs for other diseases Source: Chirac P, Torreele E. Lancet. 2006 May 12; 1560-1561. 2 2

143 candidates Pipeline now begins to be filled 8 Pipeline now begins to be filled 143 candidates 104 biopharmaceutical candidates in development... ... and 39 diagnostic & vector control candidates Diagnostics Pre Clinical 59 57% Feasibility 7 26% Phase I 15 14% Development 7 26% Evaluation 6 22% Phase II 12 12% CD4 Demonstration 1 4% FIND Phase III 10 10% 22% Adoption 6 IDRI Registration 2 Drugs 2% Vaccines Vector control Microbicides Launched 6 6% Early Stage IVCC Development # candidates Notes: Includes products not funded by Gates Foundation. Biopharmaceutical candidates in development Include: IAVI, IPM, IVI, GATB, Aeras, MMV, MVI, MVP, PVS, DNDi, iOWH, PDVI, HHVI. Source: PDPs # candidates & Source from:

DNDi A patient needs driven & innovative R&D model Deliver 6 - 8 new treatments by 2014 for sleeping sickness, Chagas disease, leishmaniasis and malaria Establish a robust pipeline for future needs Use and strengthen existing capacity in disease-endemic countries 7 Founding Partners Indian Council for Medical Research (ICMR) Kenya Medical Research Institute (KEMRI) Malaysian MOH Oswaldo Cruz Foundation Brazil Medecins Sans Frontieres (MSF) Institut Pasteur France WHO/TDR (permanent observer) Brazil India Kenya Malaysia USA DRC Japan Geneva Coordination Team + consultants 7 worldwide offices DNDi is a patients needs driven & innovative R&D model created in 2003 by … With 3 objectives 4

DNDi portfolio: €100m spent since 2003 Discovery Activities: - Compound mining - Chemical classes - Target-based - Screening HAT LO Consortium - Scynexis - Pace Univ. Nitroimidazole backup (HAT) Fexinidazole (HAT) ASAQ (Malaria) Fixed-Dose Artesunate/ Amodiaquine Oxaborole (HAT) Combination therapy (VL in Asia) Alternative formulations of Amphotericin B (VL) Combination therapy (VL in Africa) AmBisome® Miltefosine ASMQ (Malaria) Fixed-Dose Artesunate/ Mefloquine VL LO Consortium - Advinus - CDRI Nitroimidazole (VL) Combination therapy (VL in Latin America) Drug combination (Chagas) Chagas LO Consortium - CDCO - Epichem - Murdoch Univ. - FUOP K777 (Chagas) NECT (Stage 2 HAT) Nifurtimox - Eflornithine Co-Administration Paediatric benznidazole (Chagas) Exploratory a robust pipeline Azoles E1224 & Biomarker (Chagas) Exploratory SSG&PM Combination therapy (VL in Africa ) This illustration of DNDi 2011 portfolio shows the robust pipeline being built as well as current treatments under development and those available for a bit less than €100M. Major Collaborators: - Sources for hit and lead compounds: GSK, Anacor, Merck, Pfizer, Novartis (GNF, NITD), TB Alliance,… - Screening Resources: Eskitis, Institut Pasteur Korea, Univ. Dundee,… - Reference screening centres: LSHTM, Swiss Tropical & Public Health, University of Antwerp 6 to 8 new treatments by 2014 5 5

Average Cost to Develop One Drug – The Pharmaceutical Industry Data Based on this model, DNDi would have to raise billions to accomplish its goals. Through effective partnerships, we are able to bring the costs down. (in $ Million) The average cost to develop one drug has increased steadily over the past 30 years. 2003 – 2009 R&D spending including capacity strengthening = Euro 55 million Use 1 Euro = 1.4 US $ the total is $77 million *Source: PhRMA Pharmaceutical Industry Profiles 2007 6

How much will R&D cost for neglected diseases? SSG&PM Sodium Stibogluconate & Paromomycin Combination Therapy VL in Africa 2010 NECT Nifurtimox - Eflornithine Co-Administration Stage 2 HAT 2009 €100 million = ASMQ (Malaria) Fixed-Dose Artesunate/ Mefloquine 2008 ASAQ (Malaria) Fixed-Dose Artesunate/ Amodiaquine 2007 2003 – 2009 R&D spending including capacity strengthening = Euro 55 million Use 1 Euro = 1.4 US $ the total is $77 million + a robust pipeline €1 billion 1 drug = Pharma 7

Main policy challenges Challenge 1: IP and open innovation Challenge 2: Overcoming regulatory barriers Challenge 3: sustainable financing and new incentives for R&D DNDi is facing 3 main policy challenges

Access to compound librairies Challenge 1 Access to compound librairies Quality compounds sourcing Access to focused knowledge and data => Accessing proprietary compounds to jumpstart discovery DNDi agreements with pharmas, biotechs, PDPs: Merck Pfizer GSK sanofi-aventis Anacor TB Alliance Others in negotiation…. 9 9

Need for more open innovation and sharing of knowledge Challenge 1 Need for more open innovation and sharing of knowledge Nitroimidazole compounds developed by TB Alliance showed great promise for leishmaniasis treatment Grant DNDi royalty free license to develop new compounds sharing of scientific expertise and specific knowledge Synergy between two PDPs – collaboration to benefit patients avoid duplication saving costs speeding up R&D process stimulate innovation

Negotiating freedom to operate… paving the way for equitable access Challenge 1 Negotiating freedom to operate… paving the way for equitable access Royalty-free sub-licensable licenses Licenses for R&D and manufacture: world-wide Licenses for distribution and sale: all endemic regions, without exclusion Sales on the public sector: at cost plus (lowest sustainable price) Sales on the private sector: possible margins but linked to partner’s financial contribution Limited confidentiality: make freely available all information generated about the product during its development (publications, databases, etc.)

An innovative unpatented anti-malarial FDC ASAQ An innovative unpatented anti-malarial FDC Innovative partnership with sanofi-aventis DNDi formulation out-licensed to s-a WHO prequalified Registered in 28 sub-Saharan countries + India Public price: “at cost” < US$1 for adult, US$0.50 for children Over 80 million treatments distributed in Africa Next step : Transfer of technology to an additional African industrial partner © MSF

IP & open innovation: DNDi vision Challenge 1 IP & open innovation: DNDi vision Affordable treatment and equitable access to patients in need Delinking the costs of R&D from the price of products DNDi activities not financed by IP revenues No partnership without overcoming IP barrier Develop drugs as public goods, when possible Disseminate the results of DNDi work Encourage open publication of research data and technology transfer Decisions regarding ownership of patents and licensing terms made on a case-by-case basis DNDi IP policy is guided by 2 fundamental principles 13

Overcoming regulatory barriers Challenge 2 Overcoming regulatory barriers Majority of treatments submitted for approval in Africa: first approved by EMA/US FDA, or generic drugs New Chemical Entities (NCEs), vaccines, combination treatments now being developed to respond to the specific needs in endemic countries African regulatory agencies will have to perfom regulatory assessment of new treatments never evaluated before How can this be achieved the most efficiently? Regulatory barriers constitute a major obstacle and delay patients’ access to treatment. JS Dr. Jannin, WHO

Need for new pathways for registering innovative drugs for Africa Challenge 2 Need for new pathways for registering innovative drugs for Africa Increased participation of endemic countries within existing mechanisms Regional centres of excellence to support strengthening of African regulatory agencies

Sustainable financing & incentive for R&D Challenge 3 Sustainable financing & incentive for R&D Combined PDP pipeline include 143 Candidates BUT Sustainable funding not secured for expensive clinical trials New incentives needed to replenish pipelines with new compounds Global framework needed to ensure public health & access oriented R&D 16 16

PUSH and PULL mechanisms for stimulating R&D on neglected diseases PUSH mechanisms reduce immediate R&D cost PULL mechanisms ensure viable market A combination of both push & pull mechanisms is required to spur new vaccine R&D In the last few years, various incentive mechanisms for R&D into neglected diseases have been discussed, and some implemented by OECD Governments, BUT none of these have focused specifically on early-stage innovative R&D. SCIENTIFIC CHALLENGES: -- ABSENCE OF NATURAL IMMUNITY TO HIV -- VIRUS RAPIDLY MUTATES -- NO CORRELATES OF PROTECTION -- IMPERFECT ANIMAL MODELS BUSINESS CHALLENGES OF VACCINES -- NORMALY PUBLIC SECTOR IS FOCUSED ON BASIC RESEARCH (VIROLOGY, IMMUNOLOGY, PATHOGENESIS) WHILE PRIVATE SECTOR IS GEARED TOWARDS VAX DEVELOPMENT & MANUFACTURING BUT THERE’S A GAP IN BETWEEN (APPLIED RESEARCH) AND COMMERCIAL UNCERTAINTY GETS IN THE WAY OF RESOLVING SCIENTIFIC AMBIGUITY, AND VICE VERSA -- NEITHER PUBLIC SECTOR BASIC RESEARCH INITIATIVES NOR PRIVATE PRODUCT DEVLOPMENT ALONE CAN ADDRESS CHALLENGES; URGENT NEED FOR COLLABORATIVE APPROACH

Sustainable funding for product development and access Challenge 3 Sustainable funding for product development and access Funding needed for large efficacy trials, manufacturing scale-up, registration, delivery, and access Model: UNITAID airline ticket tax Other indirect tax proposals: European tax on financial transactions Digital tax, mobile phone tax, etc Possible benefits New sources of funds Ensures predictability required for long-term planning clinical development Stable & subsidized market through interaction with international financing organizations Faster registration, adoption, and delivery through interaction with WHO & international procurement agencies A currency transaction tax of .005% on the four major currencies could raise $33-60 billion a year

Pilot milestone prizes Challenge 3 Pilot milestone prizes Would pay a substantial reward (≅ € 5-20M) for specific steps in the discovery process or for clinical drug candidates that meet specific criteria Possible benefits Replenish pipeline by motivating new actors such as biotechs Vehicle to engage endemic countries as partners Pay only for success (unlike conventional push funding) Incentive to collaborate with PDPs IP management to ensure access Source of funds Usual donors: OECD governments, Foundations Endemic country governments As new incentive

Need for a global framework for R&D coordination Central role of WHO defining priorities treatment recommendations Extension of Prequalification to NTD Endemic countries involvement R&D partners new funders Identifying needs Access oriented IP management delinking R&D costs from final price Technology transfer to strengthen capacity New products as Public goods