CHI Supports Industry Effort to Curb Illicit Methamphetamine Production
Illicit crystal methamphetamine (crystal meth) production has become a huge problem across the United States, particularly in California. While many other states outrank California for the overall number of meth labs, California has more super laboratories (labs which are capable of producing 10 lbs. of meth or more per cook) were than any other state in the country. In 2008, 13 of the 14 superlabs were in California. Sacramento was one of the top five cited destinations when law enforcement seized meth from smugglers. It was the only city in California to make the top five list.

Meth is cooked using ingredients commonly found around the home, including cough and cold medication, household batteries, rubbing alcohol, paint thinner, table salt, ammonia, nail polish remover, lye, just to name a few. Certain cough and cold medications contain pseudoephedrine and ephedrine (PSE), which when reduced down to its base chemical components is a key ingredient in crystal meth production.

Last year, the California Legislature considered a bill, SB 484 by Sen. Rod Wright (D-Inglewood) that would have required a prescription for PSE. CHI opposed this proposal, as PSE is a safe and effective remedy for cold and allergy sufferers, when used as directed. If a prescription were required for PSE, uninsured Californians would have no access to the products, the state’s Medi-Cal program would have to assume the costs for PSE prescriptions for enrollees, and insured Californians would have to go to the doctor for a consultation to receive a prescription. Additionally, the state, already facing a dire budget shortfall, would lose sales tax dollars as prescription drugs cannot be taxed in California, while over-the-counter remedies can.

While we strongly stand by our conviction that requiring prescriptions for PSE is bad health policy, we also recognize the scourge that crystal meth brings to communities across the state. Crystal meth is a highly addictive drug that activates the brain’s reward pathways, releasing massive quantities of dopamine, serotonin, and norepinephrine, creating a sense of euphoria while heightening physical sensation. At the same time, the drug blocks chemicals in the bloodstream that would otherwise break down crystal meth. As a result, it can stay in a user’s system for more than 12 hours. Prolonged meth use can result in decomposition of the teeth, severe cardiovascular damage, stroke, heart attack, and even death. Aside from the physical toll, a 2009 study by the RAND Corporation showed that in 2005, crystal meth use cost society $23 billion in costs from increased healthcare costs to lost productivity.

In order to address this vexing problem, CHI and our member companies that produce PSE agreed to an alternative to the Wright bill. Our solution, AB 1455 by Asm. Jerry Hill (D-San Mateo) would require that PSE sales be tracked in a real-time database to ensure that current restrictions on the amount an individual can purchase are enforced. Under federal law, individuals can purchase a maximum of 3.6 grams of PSE a single day, or 9 grams total per month. The real-time database will be paid for by a fee on products that contain PSE.

The National Precursor Log Exchange, or NPLEx, is a system that works seamlessly across all participating states to ensure that meth cooks cannot just cross state lines to evade the law. Currently, 10 states use NPLEx, with a handful more slated to come online in the next few years. Opponents, who favored the prescription approach, have pointed out privacy concerns with a database like NPLEx, and our industry took amendments to address these concerns. The amendments require that data be purged after two months (the required time to maintain logs under federal law), require security standards be in place for the database, limit use of the data to open criminal investigations by law enforcement, and inform consumers at the time of sale that the information being collected will be on record and available to law enforcement for up to two months.

E-tracking for PSE sales is an innovative solution that ensures patient access to safe and effective remedies for cold and allergy symptoms remain readily available, while preventing the sale of PSE products in large quantities to those who would use it for illicit purposes. NPLEx has been used to identify and shut down more than 70 percent of the meth labs that are raided in that state, and a Florida pilot project with NPLEx reduced illegal sales by more than 90 percent.

If you would like more information on e-tracking for PSE, please visit http://www.stopmethnotmeds.com. If you live in California, take the time to post your support of AB 1455 (Hill) on your legislator’s Facebook Fan Page, or submit a letter to their office in the state capitol. More information on how to do that can also be found at http://www.stopmethnotmeds.com.

Venture Capital is the Lifeblood of Biotech

Since the inception of the biotechnology industry in 1980, startup companies have looked to venture capitalists to help them move innovations through human trials and into medical practice. This endeavor requires a lot of assistance: the drug development process can take more than 12 years and $1.2 billion. This is the cost for the approximately 10 percent of drug candidates that are successfully commercialized. Nearly 90 percent will fail in development.

Working with emerging companies, venture capitalists often provide five to eight years of equity to startups whose stock is essentially valueless. The goal for both the investor and the company is to advance the potential product through Phase I and Phase II clinical trials and use positive results to complete an initial public offering (IPO) or to engage in a merger and acquisition transaction to regain their investment and advance therapies to the patients who need them.

Figure 1

The firms that have successfully negotiated this pathway have been well rewarded for their work. However, they are a part of a very select group (see Figure 1). According to the graph, of the more than 1,800 U.S. biotechnology companies founded since 1980, fewer than 200 are generating revenues on the product sales today. Of those, only six companies have earned more than they spent in development. Those companies are CHI members Amgen, Biogen Idec, Genentech, Genzyme, Gilead Sciences and MedImmune.

With the stock market crash of 2008, institutional investors rebalanced their risk in part by reducing their venture capital investments. Even venture capital firms specializing in biotechnology are using their reserves to fund their prior investments rather than seeking out new startups. The current economic climate is threatening the formation, funding and forward progress of small biomedical companies—and the therapies, cures and technologies of the future.

As the economy recovers, venture capitalists and other investors will return to biotechnology in proportion to their assessment of the overall lifecycle risks and the lifecycle duration of potential products. They also will calculate the potential value of their investment at their exit. That means that California’s biomedical industry entrepreneurs need to use this time to verify the validity of their ideas, shore up their business plans and lay the groundwork for bringing their dreams to fruition—and trust that investors continue to see the value of biomedical breakthroughs.

Click here to read more in the 2010 California Biomedical Industry Report.

Legislator Spotlight: Rep. Michael Honda a Strong Advocate for the Biomedical Industry in California
Since 2001, Mike Honda has represented the 15th Congressional District of California in the U.S. House of Representatives. He is in his sixth year as chair of the Congressional Asian Pacific American Caucus and also serves on the Appropriations Committee, with postings on several subcommittees. Although born in California, Honda spent his early childhood with his family in an internment camp for Japanese Americans in Colorado during World War II. In addition to serving in the Peace Corps for two years in El Salvador, Honda earned bachelor's degrees in biological sciences and Spanish, and a master's degree in education from San Jose State University. Honda has been a science teacher, has served as a principal at two public schools, and conducted educational research at Stanford University. His political career has included stints on San Jose's Planning Commission, the San Jose Unified School Board, and the Santa Clara County Board of Supervisors. Honda also served in the California State Assembly from 1996 to 2000 before being elected to Congress. He is widowed with two grown children and three grandsons.

Honda has sleep apnea, a condition in which people stop breathing during sleep—sometimes hundreds of times during the night, and often for a minute or longer. With each episode, the brain rouses the person from sleep to resume breathing. The condition is quite common and affects more than 12 million Americans. Sleep apnea is linked to high blood pressure and other cardiovascular disease, memory problems, weight gain, impotency and headaches—as well as diminished motor skills caused by sleep deprivation. Left untreated, the disorder can be life-threatening.

Honda became aware of his condition when he participated in a sleep apnea study at Stanford University. The study was part of a physical exam, which was required for his job on the Santa Clara County Board of Supervisors. The sleep apnea exam was supposed to last two nights, with Honda attached to electrodes to determine the quality and depth of his sleep state.

“My case was so pronounced,” Honda said, “that the technician barged in after four hours.” For the remainder of the evaluation, Honda slept with a continuous positive airway pressure (CPAP) machine, developed by CHI member company ResMed. The San Diego-based company develops, manufactures and markets products for a range of sleep-disordered breathing and other respiratory conditions. “After just four hours [on the CPAP], I woke up so rested and my mind was so clear,” he said; “the difference was profound.” For the first three days, he felt like a completely different person.

Honda’s experience with sleep apnea has changed his perspective on healthcare and the biomedical industry providing treatments to patients. Honda sits on the congressional committee funding the National Institutes of Health (NIH) and National Science Foundation (NSF) and serves as Chairman of the Congressional Asian Pacific American Caucus (CAPAC). In both roles, he has been a strong advocate of healthcare equity. On the appropriations committee he has consistently advocated for increased funding for Title VII diversity training programs and written report language aimed at increasing awareness about health equity issues. As Chairman of CAPAC, he has focused on health equity issues that particularly affect the AAPI community.

Click here to read the full profile on Congressman Mike Honda in the 2010 California Biomedical Industry Report.

CHI's Inaugural Environmental Summit Brings Robust Debate and Dialogue

Photo on left: Asm. Jerry Hill (D-San Mateo) delivers opening remarks. Photo on right: Maziar Movassaghi, Department of Toxic Substances Control.

Pictured from left to right: Panelists from "Setting the Environmental Regulatory Stage in California and Lessons Learned from Europe" Curtis Stephan, Edwards Lifesciences; Michael Whaley, Allergan; Ashley Taylor, Amgen Fremont; Sheri Prosch, Medtronic; Jeffrey Sickenger, KP Public Affairs; and Sandra Pizarro, CHI.

Click here to view more picture from CHI's Environmental Summit.

CHI held its first-ever Environmental Summit this last week at The Citizen Hotel in Sacramento, where Assembly Member Jerry Hill kicked off the day with welcome remarks stressing the importance of California’s biomedical industry and preserving the state’s natural beauty. Recognizing that in recent years, numerous legislative attempts to enact restrictive environmental requirements in California have threatened life sciences research and manufacturing jobs, CHI sought to convene experts from throughout the biomedical industry and public officials to discuss the measures and their potential implications.

More than 80 people attended the inaugural event held on the Metropolitan Terrace, which had beautiful views of the state capitol, and heard from speakers from Allergan, Edwards Lifesciences, Amgen, Pfizer, Amylin, Johnson & Johnson, Genentech and Stanford University, as well as public officials including Maziar Movassaghi, acting director of the Department of Toxic Substance Control (DTSC); Margo Reid Brown, acting director of the California Department of Resources Recycling and Recovery; and Assembly Member Wesley Chesbro (D-Arcata), gave participants a broad overview of what is new, what is changing and what to expect from major state environmental regulatory programs in California. Panel discussion topics focused on the state’s complex environmental regulatory structure, green chemistry, product stewardship, including medical sharps waste and pharmaceuticals in the environment, as well as nanotechnology. Maureen Gorsen, former director of the DTSC and currently with the law firm of Alston + Bird, delivered keynote comments at lunch.

The day wrapped up with a closing reception where attendees were able to discuss environmental issues with all panelists from the program.

CHI gratefully acknowledges its Gold Sponsors: Abbott, Amgen, Edwards Lifesciences, Genentech; Silver Sponsors: BioMarin, and Sanofi Aventis; and Reception Sponsor: Alston + Bird, LLP. CHI welcomes your participation in future discussions on the implications for environmental regulations and California’s ability to maintain its leadership in innovation. Contact Ritchard Engelhardt, associate director of government affairs (916-233-3490 or engelhardt@chi.org) for more information on how to get involved.

CHI-Advancing California biomedical research and innovation

Executive Spotlight: Jeffrey Janus, director and SVP of operations, International Stem Cell Corp., and president and CEO, Lifeline Cell Technology

Jeffrey Janus serves as director and senior vice president of operations of new CHI member International Stem Cell Corp. and president and chief executive officer of Lifeline Cell Technology, one of the company’s subsidiaries. International Stem Cell Corp. (ISCO.OB) is a publicly traded stem cell therapy company with research and manufacturing facilities in Oceanside, Calif., and Walkersville, Md. The company’s technology revolves around its discovery of a proprietary and unique class of stem cells called human parthenogenetic stem cells (hpSC). These cells have distinct medical, practical and ethical advantages over embryonic and adult stem cells. They allow immune-matched stem cells and therapeutic cells to be “banked” and available immediately for millions of patients who are in critical need and cannot wait to derive cells from their own bodies. In addition to Lifeline Cell Technology, the company has another subsidiary called Lifeline Skin Care.

Janus is trained in biochemistry and business management and has more than 20 years experience focused on cell-based businesses. He is a member of the team that discovered parthenogenesis and is published in the stem cell field. After joining International Stem Cell Corp., (ISCO) Janus subsequently founded Lifeline Cell Technology to meet a growing need for media and human cells in pharmaceutical drug screening, consumer product testing and basic research at universities and government laboratories and to provide revenue and operational infrastructure for ISCO. The CHI Blog recently caught up with Janus to find out the latest on the company.

Q: How did your company get started?
A: We started this company based on the work of Elena Revazova, M.D., Ph.D., a scientist well known in Russia who had a dream of curing diabetes using embryonic stem cells. She came to the United States to work and her talent and expertise in growing human cells was discovered by ISCO’s founders, who decided to form a company around her knowledge and skill. At the time, U.S. President [George W.] Bush was restricting the use of embryonic stem cells on ethical grounds, and there were also patent issues around embryonic stem cells, as there still are. We recognized that the ethical issue was important, but medially the most important problem with stem cell therapy was likely to be immune rejection. We realized we could address these issues by developing the technology called parthenogenesis and mitigate delays from funding and restrictions by working in Russia. So Dr. Revazova went back to Russia, and we set up a collaboration in Moscow to begin her work with parthenogenesis. Today our company has all of the intellectual property rights to parthenogenesis, a very powerful technology. We have also recently brought in Andrey Semechkin, Ph.D. as our CEO. Dr. Semechkin is a well-known scientist in the field of systems analysis and an accomplished businessman.

Q: How does parthenogenesis work?
A: It’s the derivation of stem cells from an unfertilized human egg. The ethical issue surrounding work with embryonic stem cells is caused by the fact that embryonic stem cells are derived from a fertilized embryo, which has the potential to be a human being. However, if you do not fertilize the egg and yet you can derive stem cells from it that are functional, you’re not destroying a viable human embryo—and that’s exactly what Dr. Revazova did. We perfected parthenogenesis and brought it back to the United States. As a result, we have been able to overcome the ethical issue surrounding using embryonic stem cells with parthenogenesis.

Q: What are your technology’s other advantages?
A: Parthenogenesis makes embryonic stem cells (or what we call parthenogenetic stem cells) that can be immune matched to millions of people. Using embryonic stem cells, the way they are currently made, is sort of like trying to do a bone marrow transplant between one person and another picked at random without making sure you have a match. If someone needs to have a bone marrow transplant, they usually go to brothers or sisters first and try to do an immune match. For a different set of reasons a similar situation exists with blood transfusions, although type O blood can be given to almost everyone. Our cells are similar in that the parthenogenic stem cells can be immune matched to many people, and that’s the unique quality of our cells.

Q: What are the biggest opportunities for your business going forward?
A: We are creating a bank of hpSC that are “pluripotent” and carry common immune types that will match a large percent of the U.S. population, and this is a huge opportunity. These will be clinical grade and will be made in our new manufacturing facility located in Oceanside, Calif. Our biggest opportunity is the potential ability of our stem cells to be universally utilized for therapy. Scientists across the world are working on embryonic stem cells and figuring out ways to make therapeutic cells such as liver cells or nerve cells for a whole host of diseases. Eventually these therapies will need a cell or process that will minimize immune rejection. Our cells can be immune matched to millions of persons and are thus a solution for this need. So in a way, much of the work that’s going on right now across the world with embryonic stem cells accrues to our benefit. In addition, we are focused in four distinct areas—diabetes, liver disease, retinal and corneal disease, and nerve disease. We are currently growing cells to cure corneal blindness and have actually grown cornea tissue. We’re working with the University of California, Irvine to grow cells with a retina for macular degeneration. We have grown cells that are very similar to liver cells that are also related to a cell type called beta cells, which may be useful for diabetes. Collaborations with companies and universities present strong opportunities, and we’ve collaborated with Novocell in San Diego to further our work with diabetes, and we’re collaborating with UC San Francisco to test our liver cells derived from our parthenogenic stem cells and with researchers in Germany to study nerve cells generated from our stem cells.

Q: Tell us a little bit about your subsidiaries.
A: One unique thing about our company is that we are a research-oriented biotech company that actually has income. One of our subsidiaries, Lifeline Cell Technology, is growing very nicely (with a 150 percent increase in sales over the last year) by selling research products to grow human cells and study human disease. Lifeline has more than 70 products and will be releasing more than a dozen more in 2010. Lifeline Skin Care was created in 2009 based on our discovery that derivatives from our parthenogenetic stem cell technology have proven to be beneficial to human skin. Lifeline Skin Care is developing several products and is beginning early-stage clinical trials with these skin products. We anticipate that these skin care products will help to generate income and fund our continuing stem cell therapeutic research.

Q: What are your company’s greatest accomplishments so far?
A. We have successfully created 10 human parthenogenetic stem cell lines, one which carries the most common immune type in the United States and matches over a hundred million persons across the world. We are a fast-growing company with more than 12 scientists working in various areas of therapy and product development. Our stem cells have proven to be able to create cells that may be useful in therapy, including liver-like cells, corneal cells, retinal cells, nerve cells and cell types that may ultimately be useful in the treatment of diabetes. We have set up collaborations with major universities and researchers across the world. The amazing thing about our company is that we have developed into a company that has manufacturing, products, sales, quality control, therapeutic research, and an accounting department in such a short time. We have all the workings of a fully functional product manufacturing and therapeutic research company. It amazes me that we are making sales, whereas most companies our size are basic research and development companies. We know how to make human cells and freeze, store and manipulate them so that they are clinical grade. I think our technology, our knowledge of cell culture and our ability to manufacture are three very strong reasons that we have been successful.

CHI-Advancing California biomedical research and innovation

Executive Spotlight: Paul Hastings, president and CEO of OncoMed Pharmaceuticals, Inc.

Paul Hastings is president and chief executive officer of new CHI member OncoMed Pharmaceuticals, Inc., a clinical-stage company that discovers and develops novel therapeutics targeting cancer stem cells, the cells believed to be capable of driving tumor growth, recurrence and metastases. Since joining OncoMed in December 2005, he has been responsible for the forward integration of the company to the development stage, significant private financings, and the closing of a $1.4 billion preclinical, cancer stem cell collaboration with GlaxoSmithKline. Hastings was recently chairman of the board of Proteolix (sold to Onyx Pharmaceuticals in 2009), and served on the boards of ViaCell (sold to Perkin-Elmer in 2008), and Cerimon Pharmaceuticals. He is currently chairman of the board of the Bay Area Biosciences Association (BayBio) and serves on the executive committee of the board of directors of the Biotechnology Industry Association. The CHI Blog recently spoke with Hastings about where he sees OncoMed and the biomedical industry going.

“We’re going to have a great year,” Hastings said. A leader in cancer stem cell research, OncoMed has established a library of antibodies to cancer stem cell proteins for the treatment of solid tumors such as pancreatic, breast, colorectal and lung cancers. Its lead candidate, OMP-21M18, is currently in Phase I clinical trials. In addition to OMP-21M18, OncoMed’s pipeline includes several novel preclinical product candidates targeting multiple validated cancer stem cell pathways. Based in Redwood City, Calif., OncoMed marked its five-year anniversary in September 2009, and in its five-year history has managed to raise more than $220 million in capital to fund the company.

In addition to its lead candidate, OncoMed has another antibody that’s going to be filed for IND-track development this year and expects to file a third most likely in 2011. Hastings is especially excited about a potential new collaboration in a new pathway that OncoMed has in the works. “We’re looking forward to forging another major partnership in this new exciting cancer stem cell pathway,” he said. “We believe that these kinds of partnerships are what will fuel the growth of our industry, since capital access is so difficult in these days.”

Even before entering into another partnership, OncoMed has cash on hand that takes the company through 2013. Hastings credits the company’s strong capital position to the science at OncoMed, which is generating development candidates, creating value through clinical milestones and leading to future collaborations that will continue funding the company.

With a core team of 75 people, Hastings is focused not on hiring but on achieving results. “We’re all about delivering on milestones that we’ve set with a rather stealth, nimble and focused group of people,” Hastings said.

Another key priority for Hastings is the California biomedical industry. He became chairman of BayBio in January 2010, and looks forward to close collaboration between BayBio, BIO and the California Healthcare Institute, which OncoMed recently joined. He is also focused on improving education to develop the biomedical workforce of tomorrow. One example is BayBio’s support of Biotech Partners through several programs, including a fundraising drive during its 2009 Pantheon Awards. Biotech Partners, a nonprofit organization whose mission is to connect youth to the world of biotechnology, provides an entry-level biotechnology education and training program dedicated to supporting the San Francisco Bay Area’s robust bioscience industry while providing valuable working skills for local young people. Other supporters include CHI member companies Amgen, Bayer and Tethys Bioscience. Beyond K-12 education, he said the biomedical community needs to lobby gubernatorial candidates about the importance of maintaining California’s higher education system. “We need to keep the University of California alive and well, because that’s where the biotech industry came from and where our employee base comes from,” Hastings said. And on the national front, he wants to make sure healthcare reform does not inhibit the industry’s ability to innovate.

From now on, successful biomedical start-ups are going to have to think creatively – and know where their financing will come from early on, Hastings said. Gone, at least for now, are the days when new companies needed just a small amount of capital and then were able to create value through an initial public offering or an acquisition.

Looking ahead, he expects to see fewer but higher-quality companies – and increasing consolidation. “I think the companies that are going to survive in the future, particularly early-stage companies that just get started this year or next, are really going have to have exciting enough science and exciting enough discovery to be able to attract the kinds of dollars that people are getting for later-stage deals, but earlier on,” Hastings said.

When he is not working at OncoMed or on behalf of the biomedical industry, you might find Hastings snowboarding in Whistler in the wintertime or enjoying his Sonoma County house in the summertime. “I’m kind of a busy guy, and that’s what I like to do – stay busy,” he said.

CHI-Advancing California biomedical research and innovation

HUYA Bioscience International

CHI Blog interviews Mireille Gingras, Ph.D., president and chief executive officer of HUYA Bioscience International, about the explosive growth of China’s biopharmaceutical industry and opportunities for Western pharmaceutical companies.

HUYA Bioscience International is the leader in accelerating the global co-development of novel biopharmaceutical product opportunities originating in China. Jointly headquartered in San Diego and Shanghai, the company has established extensive collaborations with Chinese universities, institutes, and bioparks to speed the development and value creation in worldwide markets for China-sourced product candidates. HUYA is the first U.S. biotechnology company to license clinical-stage compounds from China for worldwide commercialization, and among the first to predict the explosive growth of its biopharmaceutical industry. With the largest compound portfolio covering a wide range of therapeutic areas, HUYA has emerged as the partner-of-choice for maximizing the worldwide value of biopharmaceutical innovation in China.

Gingras founded the privately held company in 2005. She has 18 years of experience in the biotechnology industry that includes drug development, pre-clinical research design, and experience in establishing academic partnering programs. She has made significant contributions to the study of complex addictive diseases as well as in the research and development of neuroactive steroids and neurological and neurodegenerative diseases.

Gingras was the first to establish extensive collaborations with Chinese academic and commercial biopharmaceutical organizations to speed the development and value creation in worldwide markets for China-sourced novel biopharmaceutical compounds. The company’s co-development model allows HUYA to reduce the risk, time, and cost of drug development by identifying novel compounds in clinical, pre-clinical, and discovery stages that have worldwide marketing potential. HUYA is able to accomplish this through partnerships it establishes with Chinese researchers to co-develop drug candidates to Western standards, and by accelerating global development of novel, validated product opportunities sourced from China. Gingras completed post-doctoral fellowships at Bordeaux University in France and The Scripps Research Institute in La Jolla and holds a Ph.D. from Radboud University Nijmegen in the Netherlands.

Q: What makes HUYA’s business model unique?
A: We have a real first-mover advantage. I founded HUYA five years ago, and since then we have opened six offices in Hangzhou, Beijing, Shanghai, Chengdu, Shenzhen, and Guangzhou. We are the first U.S. company to in-license pre-clinical and clinical compounds from China, and we have the largest portfolio of product opportunities sourced from Chinese researchers. With our unique business model, we work with the Chinese institutes, universities and biotech parks, including collaborations with “sea turtles.” These are Chinese nationals who got their degrees at leading Western universities, then worked at global pharmaceutical companies doing research and development, and now have returned to China to do their own research and development.

Q: How do you help advance novel Chinese compounds to the clinic?
A: We work with Chinese scientists, and once we have identified a good opportunity, we in-license the compound for the rest of the world (ex-China). In the United States, we replicate the data generated in China, expand the studies, and invest in development through to Phase I clinical trials. We then partner with global pharma to take the development programs further through Phase II. Along the way, we work closely with our Chinese partners, using their data as our roadmap, to reduce the cost, risk and time associated with drug development.

Q: What are your most advanced candidates at this point?
A: We have an oncology candidate in Phase II development in China, and we are going to start Phase I studies in the United States at the beginning of this year. We also have a cardiovascular compound about to start Phase II in China.

Q: What value do you offer to your U.S. partners?
A: We work with several global pharma companies, including Abbott and Schering-Plough. When these companies partner with us, they get access to the network that we have developed over the past five years. We have established ourselves as the go-to company for understanding the landscape of biotech and pharma in China.

Q: How does being a woman in science play in China?
A: It is very well received. There are a lot of biotech CEOs who are women in China. If you have substance and you know your science, it doesn’t matter whether you are a man or a woman.

Q: Do you speak Chinese? And how often do you go to China?
A: I am learning, and I go to China every four to six weeks. We have an exceptional team in China, and we are continually expanding. Our scouts in China have established great relationships with PIs [principal investigators]; the international language is science.

CHI-Advancing California biomedical research and innovation

California Healthcare Policy Forum Spotlight: Assemblyman Nathan Fletcher

Nathan Fletcher is the State Assemblyman representing California's 75th District and will be addressing attendees of CHI’s California Healthcare Policy Forum in San Francisco at the Mark Hopkins InterContinental on Nov. 5. Assemblyman Fletcher serves as vice chair of the Assembly Health Committee and the Select Committee on Biotechnology. He is a member of the Accountability & Administrative Review, Water, Parks, & Wildlife and Utilities and Commerce Standing Committees. In addition, he sits on the Select Committees on Foster Care, Child/Adolescent Health and Safety, Healthcare Workforce Access, Safety and Protection of At-Risk California Communities and Government Reform.

Q: As a freshman lawmaker, you are vice-chair of both the Assembly Health Committee and the Select Committee on Biotechnology. What sparked your interest in healthcare policy and the biotechnology sector in particular?
A: If you look at my district, I have one of the world’s largest concentrations of biotech, including UCSD, Burnham, Scripps, Salk, all these various institutes and groups like CHI that help to bridge that and the 500 biotech companies that reside here. Also, if you look at the changing dynamics of economics, these are the jobs of the future. Information technology, biotech, clean tech, high tech, agricultural biotech—these are the industries and jobs of the future. If we don’t figure out in America and in California how to innovate and create new ideas, we’re not going to compete in the global marketplace. Whoever figures out how to cure diabetes, Alzheimer’s, cancer from a medical perspective; or to grow drought resistant crops; whoever makes a faster, smaller computer processor or figures out how to transport people faster with less of an impact on the environment; whoever figures out how to create sustainable power. Not only do they get to make the world a better place, but they also will get to sell that to the 95 percent of the world population that lives outside America and I want that place to be California. I’m very interested in this cluster effect and creating centers of innovation and working to get the brightest minds to come here and be part of it.

Q: What do you believe is the state’s role in healthcare reform?
A: The states play a tremendous role in healthcare. So much is administered by the states, even federal programs are run by states and counties, but aside from administering programs and making them work better, the states can be great incubators of new ideas. California is known for being at the cutting edge. It’s a great way to see what works and what doesn’t and California itself provides a very challenging environment. I believe in universal healthcare coverage—I think everyone should have healthcare and that we can design a system where everyone can participate, it’s just a question of how we get there. I also think California should lead on utilizing new technologies like electronic medical records.

Q:You have said that you believe healthcare begins with healthy living and that we should find constructive and creative ways to promote health and wellness. Can you tell me what some of your ideas are for the promotion of health and wellness in California?
A: I think when we talk about healthcare, we skip to the idea of healthcare for sick people and bypass the fact that healthcare should start with healthy living. I’m interested in incentivizing healthy living. I think financial motivators are great. There’s a remarkable difference in the healthcare costs of a healthy non-smoker who exercises and maintains healthy weight and at a certain point, people need to be held accountable.

I think people should be able to buy their own insurance, rather than relying on an employer-based system like we have now. It just doesn’t make sense anymore, now that people switch jobs and healthcare plans so often. We could then give individuals the tax breaks that employers now get and the consumer would get to choose and keep the plan that makes the most sense for them.

Immunizations are another area I’m interested in. I’ve lived in Africa, Asia, third world countries, and one of the saddest things I’ve ever seen is people dying of diseases like polio, which is now preventable. We’re seeing rates of unimmunized children jump in the U.S. and I’m worried about that. I respect parents’ rights but I think there’s a lot of awareness and education we can do. And we have to look at reimbursement and how physicians are paid for vaccinations. If physicians aren’t reimbursed for immunizing patients, then parents will have to go elsewhere and adding another hurdle to a busy parent’s schedule is one more hurdle that hurts all our kids.
Q: You’ve also acknowledged the need for technology and innovation to transform our current healthcare system, which is a topic that we’ll be exploring at the California Healthcare Policy Forum, where you’ll be addressing attendees on Nov. 5 at the Mark Hopkins InterContinental in San Francisco. How do you think technology and innovation can contribute meaningfully to reforming the delivery of care in the U.S?
A: Forty years ago we put a man on the moon and we talked to him. I was at Apple recently and they told me the computing power of the iPhone is equivalent to the entire Apollo project. Thinking about how we now use this technology, I can take photos, trade stocks, get information, watch news programs. Yet, I go to my doctor and he writes down information in my medical record and writes a prescription on a pad of paper that I take to my pharmacist. And I think, what are we doing? So, one application is in the medical record keeping area. I do realize the challenges with confidentiality, but certainly we can overcome this to have a system that allows my physician to see, from cradle to grave, what tests have been performed, any known allergies or chemical reactions, etc, there simply has to be a way.

I think it has a role to play in fraud prevention. I think a real-time stream of data and analysis could elucidate patterns of fraud. And the third way is empowering the individuals to make decisions as far as information. If you’re going to have a knee surgery, you should know how many your physician has done, how many of his operations led to infection, etc. The more information you can provide to people in an easy to use format, the more they’ll be empowered to make decisions about their own healthcare. In short, I see a lot of applications for technology and I don’t believe it has to be a cost center. Of course there would be some initial capital investment, but we really need to make that leap.

Q: You mention education as an important issue for you and your constituents. The biomedical industry in California is vested in improving math, science, technology and engineering education to secure a well-educated and prepared future workforce and has funded many programs to educate teachers and students and expose them to new research and technology. What are some of your ideas for improving STEM education in California?
A: The Hart-Rudman Commission did a pre-Sept. 11th study on the top threats to America and one of their top two or three, including foreign terrorism, was our declining prominence in the fields of science, technology, engineering and math. We really need to have a focus in these areas in education and incentivize students to study these topics. In Florida, high school kids can choose a major like we do in college, so having programs where students can specialize in these study areas could help. We need to adequately prepare students for schools like UCSD early on and incentivize them and invest in them.

The UC system used to be 7% of the general fund and is now down to 3%. I certainly understand of how programs get funded, but if we want to maintain our status as innovators, we have to invest in our universities. We also need to change our mindset with K-12 education. We should fast track college-bound kids. Right now, 80% of 9th graders will not go to collage. We need to offer career and technical education, with some math and algebra and other skills to prepare them to enter the workforce where they can get a good job that is high paying, such as in biotech manufacturing and these other high tech and biotech jobs of the future.

I’m looking forward to attending the California Healthcare Policy Forum on Nov. 5 and meeting the folks who are actually innovating new drugs and therapies and employing people and teaching California’s future workforce. I have a lot to learn from the speakers and from the attendees so it should be a great opportunity.

CHI-Advancing California biomedical research and innovation

California Healthcare Policy Forum Spotlight: Dr. Mark Smith

Dr. Mark Smith is president and chief executive officer of the California HealthCare Foundation and will be a part of CHI’s upcoming California Healthcare Policy Forum, to be held in San Francisco at the Mark Hopkins InterContinental, from 11:30 a.m. to 6 p.m. The Foundation is an independent philanthropy with assets of more than $700 million, headquartered in Oakland, Calif., and dedicated to improving the health of the people of California through its three program areas: Better Chronic Disease Care, Innovations for the Underserved, and Market and Policy Monitor.

A board-certified internist, Smith is a member of the clinical faculty at the University of California, San Francisco, and an attending physician at the Positive Health Program for AIDS care at San Francisco General Hospital. He is a member of the Institute of Medicine and serves on the board of the National Business Group on Health.

Prior to joining the California HealthCare Foundation, Smith was executive vice president at the Henry J. Kaiser Family Foundation. He previously served as associate director of the AIDS Services and assistant professor of medicine and of health policy and management at Johns Hopkins University. He has served on the Performance Measurement Committee of the National Committee for Quality Assurance and the editorial board of the Annals of Internal Medicine.

Smith received a bachelor's degree in Afro-American studies from Harvard College, a medical doctorate from the University of North Carolina at Chapel Hill, and an MBA, with a concentration in health care administration, from the Wharton School at the University of Pennsylvania.

Q: What have you witnessed in your interactions in DC with congressional aides, administration officials, policy analysts, and others as the healthcare reform debate continues?

A: The first thing that’s notable is that the terms of the debate have changed subtly from health care reform to health insurance reform. The good news is that realistically, it’s probably all that one can expect to happen at this point in the debate. The bad news is that the fundamental condition of American healthcare, which is that it costs too much, is unlikely to be dramatically changed by any of the things that are on the agenda right now. It remains to be seen how much will survive in the proposed legislation.

Q: Your organization, the California HealthCare Foundation, is dedicated to improving the health of the people of California through three program areas: Better Chronic Disease Care, Innovations for the Underserved, and Market and Policy Monitor. Tell me how these programs play in to healthcare reform.

A: Our sense is that in the long run, healthcare as it is currently configured is unsustainable. All three programs are designed to attack what we see as the basic elements of our cost problem. The system right now is dramatically tilted toward acute disease management and high cost, inpatient hospitalization. We think the real benefits in terms of reducing costs lie in attacking the chronic disease problem. We don’t focus on the development of guidelines on how diabetes, asthma and hypertension should be treated, but rather on narrowing the gap between what experts say should happen with these patients and what actually happens.

Q: How does that work with the current incentive structure in healthcare? Right now physicians get paid and get paid more if patients are in an acute condition and get paid relatively little for preventive care. Are you working on restructuring incentives?

A: To be honest, I think that’s probably not work we can do on our own. The primary physician doesn’t get paid if her patient is in the ICU, but she is at least beginning to be paid for the adequacy of the control of her patients’ blood sugar or blood pressure. So part of why we were active in helping to catalyze the pay for performance model was to start changing the incentives for the physicians who are treating chronic disease. One problem we’ve noticed is that many physicians don’t have good “population management” tools, such as registries, to be able to capture these data, so that’s something we work on.

Q: As the head of a foundation that engages deeply with providers, hospitals, government, insurers, payers, and patients in California, and with particular concern for underserved communities, how do you see California positioned in this debate?

A: It’s interesting. A lot of the leading actors in Congress are from California. We’re certainly ahead of the rest of the country with regard to the existence of large groups who provide care in an organized and systematic way. We’ve always had Kaiser and large, sophisticated medical groups. However, some of our in-state regulatory decisions are lagging in terms of the types of developments that will allow cooperation among small practices that will be necessary to deliver care in a rational, organized way.

Q: You have said in recent statements that measures passed as part of the stimulus package, including health IT financing, comparative effectiveness research, and support for electronic medical records implementation will create much greater reform to healthcare delivery than what is being proposed as part of healthcare reform packages being considered now in Congress. Can you explain some of the implications for this technology?

A: Comparative effectiveness and support for IT adoption by physicians are an essential part of the infrastructure necessary to reform healthcare. Are you familiar with OpenTable? It brings to mom and pop restaurants information technology sophistication, visibility to customers, other benefits of being in a big chain without having to shut down and become a chain restaurant. So modern technology can bring to small physician practices that same kind of sophistication. The promise is that some modern technology and service solutions can help drive the same outcomes as the large practices.

OpenTable has taken away the need for restaurants to have their own server and IT staff. Think about the analogy for a small physician’s office. Most small practices don’t have an IT staff and would never be able to sustain a huge system for tracking patient information. I think this model provides some hint about how we might be able to achieve the group-wide outcomes and sophistication of a huge practice.

CHI represents very technologically advanced companies. Yet the healthcare industry is probably 15 years behind other industries on IT. If the industry is to be focused on increasing both efficiency and quality and being able to measure them, let alone improve them , we can’t rely on one-off, ad hoc, retrospective research projects, which is basically how we know what little we do know about the quality of care.

Every other industry has a data and analysis stream that allows them to analyze quality and efficiency in real-time. Take the example of Walmart. Walmart knows more about its customers than most doctors know about their patients. They know what the customer has bought, what they bought last week, what they’re likely to buy next week, and exactly how long it will take the store to restock the shelves with those items. They don’t hire someone to do all that days later. If we’re ever going to have a shot at being able to afford knowing what we’re doing, let alone improving what we’re doing, we have got to have a robust digital data stream that is a part of how the industry is run.

Q: As a physician who specializes in AIDS, do you see advances being made in the diagnosis, treatment and prevention of AIDS in the next 25 years?
A: I used to run the AIDS clinic at Johns Hopkins and I still see patients at the AIDS clinic at San Francisco General, arguably the two best clinical centers for AIDS in the world. I am living proof of how far we’ve come. Ten years ago, if I had a patient with AIDS and a mildly increased blood pressure, I really wasn’t going to sweat the blood pressure. Now I have to be up on PSA tests, colonoscopies, lipids, because I expect my patients to be alive 20, 30, 40 years from now. In recent weeks there has been some really promising news on the first AIDS vaccine. I continue to believe that we have got to work on behavioral changes to halt the spread of HIV, but in the long run, what we need is an AIDS vaccine.

Dr. Smith will be participating in CHI’s California Healthcare Policy Forum on Nov. 5 from 11:30 a.m. to 6 p.m. Click here to register for the event.

CHI-Advancing California biomedical research and innovation

California Healthcare Policy Forum Spotlight: Ian Morrison

In the run up to CHI’s annual California Healthcare Policy Forum, which this year, will take place on Nov. 5 at the Mark Hopkins InterContinental Hotel in San Francisco, I will be interviewing the various opinion leaders we will bring together to discuss California’s innovation economy, its place in the current healthcare debate, and how healthcare reform promises to change the provision of care in years to come. Ian Morrison, internationally known author, consultant, and futurist specializing in long-term forecasting and planning with particular emphasis on healthcare and the changing business environment, will be the moderator of the event and is the subject of my first interview. He combines research and consulting skills with an incisive Scottish wit to help public and private organizations plan their longer-term future and promises to deliver an impactful, interactive session among industry leaders, policy makers and academicians on the future of healthcare in America.

Registrations are still available for the event. Click here for more information.

Q: What will be the focus of this year’s California Healthcare Policy Forum?
A: It’s going to be a very interesting meeting. The focus is going to be on helping attendees get a handle on what healthcare reform means for CHI’s constituents, its members made up of leading biotechnology, medical device, diagnostics, and pharmaceutical companies, and public and private academic biomedical research organizations. Not just where healthcare reform is headed but what this means to innovators in California. On the one hand, healthcare reform is on the front page the New York Times everyday, but it also affects the day-to-day business of CHI’s members. This collection of leaders of industry is going to be able to give their views and my job as moderator will be to draw out those stories in an interactive setting.

Q: What do you feel participants will gain by attending the event?
A: Participants are going to get a cutting edge view of where we are in the debate from people with interesting perspectives on health policy and issues of innovation. On that first panel, we’ll be able to drive toward the “so what” for those in the innovation industry. Dr. David Gollaher, CHI’s president and CEO, will represent CHI members and what they are talking and thinking about. Dr. Alan Garber is a distinguished health policy expert, an economist and physician who specializes in the evaluation of medical technology. Dr. Sharon Levine is a physician at Kaiser, one of the senior leaders there responsible for thinking about public policy and the deployment of new technology so she’ll bring the perspective of what it’s like to be inside a large organization that makes decisions about the use of technology. And Michael Goldberg a leading venture capitalist, will talk about the effects of healthcare reform on the finance industry and ultimately, on the biomedical industry that relies so heavily on this type of investment. The panel will talk about such issues as the use of comparative effectiveness research, potential changes to reimbursement, the fact that more people will likely be covered at lower pricing and the resulting tremendous cost pressures moving forward. This panel will set up the conversations later in the day, which will feature CEOs from leading companies in the various sectors that make up the biomedical industry, giving them an opportunity to focus on what healthcare reform means to them and the various specifics they are concerned about.

Q: How do you see the provision of healthcare changing in the years to come? What part does innovation play in the new paradigm?
A: I’ve been an ongoing observer of the system for 30 years starting off by doing technology assessment. I think the environment going forward is going to challenge medical technology to deliver on the promise. It’s not just about “more is better” or “anything new is good.” That just won’t do in the future. Anything that is new in the future is going to have to demonstrate dramatically superior performance, meeting an unmet medical need where there really is nothing else available. One of the challenges I’ll pose to the group is why is it that in this industry, innovation means more expensive, where in every other industry, innovation means “better, faster, cheaper”? I think getting at the source of that is going to be an important contribution to this meeting.

Q: How must executives change their thinking in order to grow with the changing needs of the American consumer and/or the changing healthcare system?
A: I think executives need to gain clarity on what the goal is. The goal has been to find something novel that physicians can be persuaded to use. The hurdle is going to be much higher now. It’s going to be about delivering value in a much clearer way, relative to existing therapies in quality, outcomes and cost effectiveness.

Q: You mention in your writing the need for consumer education and the popularization of the concepts of how to improve the system in order to improve access and outcomes. How do you propose this to take place?
A: There’s a lot of misinformation. We are stuck in the notion that more is better and denial of anything is always bad. There is a real misunderstanding of how much healthcare costs and why. The basic problem is the average American household can’t afford the average cost of care. Everyone being subsidized by the richest 2 percent of Americans simply won’t work. So part of the collective education of consumers is the understanding that it’s expensive, costs are going up, the component elements of that are partly because of bad behavior on the part of the consumer, partly because of the high cost of care, partly because of the fragmented system providing care, and medical technology is one contributor to overall cost escalation. More judicious use of technology is a direction we’re likely to head in.

Q: What part of the California Healthcare Policy Forum are you most looking forward to?
A: With this event, we’re going to have an opportunity to interact with some decision makers on the public policy side at the state and federal level that are active in medical technology related issues. This is going to be a tremendous chance for people to learn about the “so what” about healthcare reform for people in the innovation industry and I think it will be a discussion not just cheerleading innovation but really drilling down on the challenges and encouraging them to think about how we can evolve to better meet the needs of the American public.

Register now for the California Healthcare Policy Forum.

CHI-Advancing California biomedical research and innovation

Executive Spotlight: Dr. Jonathon Lord, CEO of Navigenics

Dr. Jonathon “Jack” Lord is the CEO of Navigenics, the premier provider of genetics testing. He’s served in the position for about 100 days and in the interview below discusses what sets Navigenics apart from other genetic testing companies, why and when he thinks genetics testing will become the norm and Navigenics’ growth strategy for the next few years. Dr. Lord came to Navigenics from Louisville, Kentucky-based Humana, Inc., where as chief innovation officer he led the development of new products and services to fundamentally transform the healthcare system and support personal health needs. Dr. Lord also led Humana’s international efforts as chief executive of Humana Europe.

Before Humana, Dr. Lord was president of Health Dialog in Boston, where he helped pioneer e-enabled healthcare and promoted shared decision making between doctors and patients. He previously served as chief operating officer of the American Hospital Association in Washington, D.C., executive vice president of Anne Arundel Medical Center in Annapolis, M.D., and executive vice president of Sun Health in Charlotte, NC.

Dr. Lord is a board-certified forensic pathologist with more than three decades of experience in medical practice and leadership. He launched his medical career with the U.S. Navy, where he spent 11 years on active duty and served in leadership positions for the Navy’s Surgeon General and Secretary of the Navy.

He currently serves on the Advisory Board to the Director of the CDC, the National Biosurveillance Committee, and the World Economic Forum’s Global Agenda Council on Chronic Disease and Malnutrition. He is also a director for Stericycle (SRCL) and DexCom (DXCM).

He received his medical degree from the University of Miami in 1978. Dr. Lord has held multiple academic appointments, including Adjunct Professor of Community Medicine at the Dartmouth Medical School.

Q: Tell me about Navigenics, its products and what’s in the pipeline.
A: Navigenics is the premier provider of personalized genetics testing. We test for a number of health conditions such as breast cancer, colon cancer, type 2 diabetes and heart attack. We are developing a product around pharmacogenomics, which will test people for drugs they may respond to or have an adverse reaction to or metabolize slower or faster than others. Our tests are saliva-based and we are able to provide the testing out of our lab in West Sacramento. We feel we are at a really exciting frontier that will change the way healthcare is delivered.

Q: How many people work at Navigenics and how many locations do you have?
A: We employ about 45 people, mostly at our headquarters in Foster City with 10 at our lab in Sacramento.

Q: Which companies do you view as your main competitors and what are your main competitive advantages?
A: Our main competitors are 23andMe, deCODE and Pathways Genomics. We are conservative in qualifying the science that is used to ensure the quality of our tests. Navigenics is primarily focused around working closely with clinicians, testing for diseases and conditions that are actionable, preventable or treatable. We integrate our reports with the physician’s practice and work to educate physicians about personalized genetics and the application of the results to mapping out treatment options for patients. Our other focus is working with large employers like Microsoft, Cisco, Scripps, and large physician groups, like MDVIP, the largest premier medical practice in the United States.

We’re a subscription service providing genetic testing, access to genetic counselors and we store DNA. As we have additional tests and as science changes, we retest DNA and give you updates regarding new conditions and new insights about your health and how you can take action to be healthy.

Q: What changes can we expect in your industry in the coming years?
A: We really feel this whole field is the harbinger of a new era in medicine. The next wave is really about identifying the potential for illness and being in a position to mitigate or prevent illness before it occurs.

Q: What segment of your business do you see as the primary growth driver this year and next?
A: Navigenics’ relationship with large employers, health plans and governments outside the U.S. that are focused on health and well being and developing a focus on understanding that the prevention of illness enables reform in healthcare. Many large employers are self-funded and invest in health and well-being programs for their employees, such as health risk appraisals, and weight reduction and smoking cessation programs. Large employers see the testing we provide as a way to activate interest in existing programs and motivate their employees to change behavior. We work directly with human resources departments and our tests are qualified for flex spending and health savings accounts. We also have the option for payroll deduction.

Q: What is your greatest hope for the technology?
A: My greatest hope is that personalized genetic testing becomes more accessible. We need to work together to expand access to this technology by increasing awareness and highlighting the need for reimbursement. I hope this testing becomes the norm, rather than the exception. We are just at the beginning.

Q: How long until it does become the norm?
A: Right now we’re seeing uptake especially among the high tech and health industries. We see it as a great opportunity for hospitals to bring their own staffs up to date with this technology.

Q: What keeps you up at night?
A: Not much. I’ve never been a worrier. I think there are lots of challenges and it’s really important to be vigilant as opposed to being worried. We have to be rigorous and stay committed to the vision of how this will transform healthcare and behavior for healthier lifestyles.

Q: What do you do to relax?
A: I love to play golf, drink wine and I’ve been doing a little bit of cooking these days.

Q: What’s your favorite thing to cook?
A: This season it’s been heirloom tomatoes. They’ve been so flavorful!

Q: If your house were on fire, what would you grab?
A: My wife, of course!

Q: When you were young, what did you aspire to be as an adult?
A: I am a physician and I think I aspired to that pretty early on. I had this Marcus Welby vision of what a doctor is. It’s been a great pathway for me to do a lot of things. I love the moment I’m in and I keep moving.

Q: Any regrets?
A: No regrets. My focus is in the moment: don’t look back and don’t worry about the future.

Q: What are you reading?
A: I’ve been here about 100 days so have been focused on my work here and haven’t read anything lately, but I do have a pretty eclectic collection of things I read. I look to Facebook and my network of friends to find interesting articles from around the world.

Q: How do you want people remember you?
A: That I made a difference giving people the information they need to be the best they can be.

***Note to readers: Dr. Lord extended the offer to me to take the Navigenics test so I will be blogging in the near future about my experiences with the technology. Don’t forget to check back on the blog for updates.***

CHI-Advancing California biomedical research and innovation