1. 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

2. 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
( )
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 May 12; 2 2

3. 143 candidates Pipeline now begins to be filled8
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:

4. DNDi A patient needs driven & innovative R&D model
Deliver 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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.)

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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