Donald P. Francis, MD, DSc Entrepreneurial Thought Leaders Semina
Jan 02, 2016
Donald P. Francis, MD, DSc
Entrepreneurial Thought Leaders Seminar
Presentation Outline
I. Myself – a brief description
II. Vaccines – Social need, business challenge
III. The company/mechanisms to develop vaccines
IV. Lessons, reality, future directions
An Entrepreneur by Necessity
• California physicians: Grandfather, mother, father• Trained in pediatrics and infectious diseases• 21 years with CDC as infectious disease epidemiologist
• Cholera Nigeria• Smallpox Sudan, India, Bangladesh• Ebola Sudan• AIDS everywhere
• Since 1992, an AIDS vaccine “Entrepreneur”• Co-founded what became Int’l AIDS Vaccine Initiative• Genentech• Co-founded VaxGen (1995)• Now developing a not-for-profit for developing country vaccines.
How Do Vaccines Work?
• Vaccines “fake out” the immune system
• Without causing disease, they induce a “post-infection” immune status
• Protection from subsequent infection or disease
0
Mor
talit
y ra
te p
er 1
00,0
00/y
ear
DiptheriaPertussisMeaslesPoliomyelitisAIDS
Year1900 1920 1940 1960 1980
10
20
30
40
Infectious Disease Mortality Rates in the U.S.
Source: UNAIDS, AIDS Epidemic Update, Dec. 1998
North America 890,000 Caribbean 330,000
Latin America 1,400,000 N. Africa, Middle East 210,000
Western Europe 500,000
Total: 33.4 million
Sub Sarahan Africa 22,500,000 South and South-East Asia 6,700,000
Eastern Europe, Central Asia 270,000 East Asia and Pacific 560,000
Australia and New Zealand 12,000
People Living with HIV/AIDS
AIDS Orphans in Sub-saharan Africa
"By the year 2010, one in seven
children under 15 years will
have lost a parent to AIDS."
Annual Direct Medical Costs of HIV for the World
$18 billion in 1997*
*Modified from AIDS in the World II, ed. Mann & Tarantola
An HIV/AIDS Vaccine
The only way to stop the AID epidemic is with a vaccine
ChallengesBusinessScientificSocial value
How Many Candidate HIV Vaccines Could BeFunded by One Year's Direct Medical Costs?
$ 18.0 billion (medical costs)
$ 0.3 billion (develop. costs)
61 candidate vaccines
HIV-1 Vaccine Development
Pipeline or pipette?
Phase I 27 candidates Phase II 2 candidates Phase III 1 candidate
"Maybe in the next 10 years if we work very hard, there may be 3 candidate vaccines in Phase III."
Dr. Jose Esparza, UNAIDS March, 1999
300
200
100
0
400
Years0 2 4 6 8 10
Investorscost
Companyrevenue
Cost of HIV Vaccine Development
Opportunity Costs
Huge social need
Questionable return ? Market (esp developing
countries)? Social value (demand?)
Why Vaccines Fail to CompeteVaccine/TherapeuticMarket Comparison
Note: Vaccine market data 2000, pharma sales 2001
Development of Vaccines vs Anti-viral Agents for HIV
Anti-viral Anti-viralVaccines Drugs
Historical Many FewDev Time Longer ShorterSocial Demand Low HighNum Available None Many
HIV Prevalence vs GNP
VaxGen’s Vaccine
Almost 20 years
$280MM invested
A long way to go
84 85 86 87 97 9888 89 90 91 03Genentech, Inc. VaxGen, Inc.
99 00 01 0292 93
Antibodies Inhibit binding to CD4
Antibodies to rgp 120neutralize HIV
IIIB producedChimps protected (IIIB)
IIIB Phase I
AIDSVAX research begins
Nucleotide squence of HIV determined
MN Produced
MN Phase I
MN Phase II
Chimps protected (MN)
B/B and B/E produced
B/B Phase I/II
B/E Phase I/II
B/B Phase III Trial
B/E Phase III Trial
AIDSVAX Development History
AIDSVAX –Cost of Development
Investment:
Genentech $ 50M
VaxGen $130M
Celltrion $100M ______ Total $280M
Capital Sources:
Private capital: $269M
US Government: $11M1
NGO $0 _____
Total $280M
1 Includes CDC and NIH
Efficacy Trial Results
Thai trial – no efficacy
US/Europe Trial – Low efficacy
AIDSVAX B/B - Efficacy by Subgroups
50%
100%
0%5.8%
65.7%77.6%
86.5%
Volunteers (vacc + plcbo)
Overall Black Women
Effi
cacy
Observed infections (vacc)
5009 498 314 268 194 33 17 8 191 12 4 1
*Expected infections, VE=0
Weighted cohort
Black Asian
Other
*Adjusted for 2:1 vaccine:placebo
NS <0.01 <0.02 NSp-value (unadjusted)
VaxGen – Built a Company with Value
• > 120 highly-skilled vaccine developers
• Excellent team spirit
• Flexible
VaxGen - Looking Ahead
• Company following “social value” - Priority shift to anthrax and smallpox
• Future AIDSVAX development will require outside funding/partnerships NIH/CDC collaboration to complete analysis
NIH - Subtype C vaccine – early stage NIH - Thailand prime-boost Phase III
trial
The Next Venture
• Three VaxGen senior executives stepping out of company
• Will establish a not-for-profit foundation
• Pursue vaccine development for the less-developed parts of the world
• Dependent on outside (Gates) funding