1. Malaria & the Multinationals: Public Private Partnerships APPMG All-Party Parliamentary Malaria Group BEAD Business Exchange on AIDS & Infectious Diseases Monday 6 February 2006 Peter Potter-Lesage MMV – Medicines for Malaria Venture

2. The Lessons learned from existing PPPs - Product Development Partnerships ….. The example of MMV & antimalarial drugs The situation in 1999 Public Private Partnerships for R&D The example of MMV Market size, market failure, R&D costs Economics behind industry withdrawal Virtual drug R&D, partners and partnerships The Win/Win Solution …. A joint R&D portfolio The Value Proposition of PPPs The ‘Experiment’ is over

3. Public-Partnership Model: Fun in 2001

4. Bad Bugs, No Drugs As for antimalarial drug R&D in 1999 … This area is now considering a PPP solution

5. Neglected diseases 1975 - 1999 Tropical diseases are good examples of neglected diseases. Of the 1,393 total new drugs approved between 1975 and1999, only 1% (13 drugs) were specifically indicated for a tropical disease …. Only 3 of these were for malaria

6. Number by Year & Product Type Public-Private Partnerships for Product Development:Financial, Scientific & Managerial Issues as Challenges to Future Success / Research Report WHO/CIPR – Commission on Intellectual Property Rights, Innovation & Public Health (Elizabeth Ziemba) Public-Private Partnerships for Product Development

7. 5 new Public Private Partnerships for product development since 2000 DNDi - Drugs for Neglected Diseases (CH) EMVI - European Malaria Vaccine Initiative (EU) MMV - Medicines for Malaria Venture (CH) MVI - Malaria Vaccine Initiative (USA) iOWH - Institute for One World Health (USA)

8. MMV & DNDi in Switzerland & ‘Europe’ An island in the heart of ‘Europe’

9. Deliverables ?

10. “A dramatic sea-change in research into ten so-called ‘neglected diseases’, including malaria, tuberculosis (TB), leprosy and sleeping sickness, could result in at least eight new drugs being developed by 2010. After a barren period when very few therapies were introduced for these diseases, which kill millions of people a year and cause the loss of the equivalent of 92m years’ of healthy life, there are now over 60 drug research and development projects underway. “ “The New Landscape” in August 2005

11. Neglected Diseases Drugs in development (2005) … PPPs = 75% ‘The New Landscape of Neglected Disease Drug Development’ - Dr Mary Moran LSE/Wellcome Trust 2005 PPPs = 47

12. Social and Economic Impact of Malaria Afflicts more than 1/3 of the human population 500 million cases per year Over 1 million deaths of children under 5: Leading cause of death of children under 5 in Africa Malaria is curable: 90% deaths are preventable Annual lost GDP for Africa: $12 billion Costs up to 40% of total public health expenditure Up to 50% of in-patient and out-patient care Up to 60% of total household expenditure

13. Antimalarial Drug Resistance Worldwide, 2001 Chloroquine resistance S/P resistance Mefloquine resistance

14. MMV - A Partnership between Public and Private sectors MMV Launch Nov 3 rd, 1999

15. Founding Bodies Netherlands Ministry of Foreign Affairs Swiss Agency for Development and Cooperation United Kingdom Department for International Development Global Forum for Health Research World Bank World Health Organisation (RBM / TDR) International Federation of Pharmaceutical Manufacturers

16. MMV to operate as a not-for-profit ‘business’ Establishment of independent Foundation Small management team with operational freedom headed by Chief Executive Officer answerable to Board of public / private sector experts Virtual R&D approach Commercialisation through pharmaceutical companies

17. Market Failure Poor endemic populations cannot pay the fully- loaded discovery and development costs New combination drugs costs more Net present value analysis suggests pharma companies not likely to see positive returns from R&D investments 4 of the last 5 anti-malarial drugs developed have indeed not made a profit Financial Risk Reputational Risk

18. Economics behind industry withdrawal from malaria drug R&D: Many “Push” and “Pull” public policy responses are possible. “Push” e.g. MMV “Pull” e.g. Global Fund $800 million +

19. A Virtual Pharma Company or Drug R&D Facility: Avoids Capital Investment, Promotes in-kind Support ‘Shareholders’‘Customers’ Donors Bill & Melinda Gates Foundation Rockefeller Foundation U.K. Switzerland Netherlands USAID World Bank Wellcome Trust WHO/RBM BHP Billiton ExxonMobil Foundation Endemic Countries NGOs (MSF, MSH etc.) Multi-lateral Agencies Public/Philanthropic Funders Global Fund Pharma Others MMV Academia

20. Medicines for Malaria Venture Conception: Social VENTURE CAPITAL staged financing to correspond with milestones that mark a reduction in uncertainty syndication of investment and portfolio management to gather more information and diversify risk covenants and restrictions in critical areas to limit potential conflicts VC Investment firms offer much more than money. Their specialized knowledge of target industries, active involvement in the companies they support, and strategic techniques that align their own and their investees' interests help ensure that promising companies allocate resources effectively and have the best chance for success.

21. Joint R&D MMV Inputs $$$ Drug Profile Partner Management Link to WHO/RBM/Policy Malaria Expertise Evaluation / Monitoring Public Private Value added through effective Public-Private Partnership …. A Win/Win proposition Public+Private = leveraged cost For the ‘Public Good’ Industry Inputs Chemistry IPR Toxicology Know How Assets in Kind Technology Liability Insurance MMV Gets Rights in DEC IPR in ‘Field’ Drug Supply Return on non DEC Sales Industry Gets Rights in non DEC IPR outside ‘Field’ PR Benefit HR Benefit Validation of Technology Private Goods Staff satisfaction Corporate Citizenship and Responsibility

22. ExploratoryDiscovery PreclinicalClinical Development LeadLeadTransitionPhase IPhase IIPhase III IdentificationOptimization OZ (synthetic peroxide) Dihydrofolate reductase (DHFR) Haem Polymerization MMV Portfolio 2000

23. 4(1H)- pyridones Novel Imidazolidine -diones Pf protein farnesyl- transferase (Pf-PFT) Cyclofarnesyl sequiterpenes PSAC antagonist ExploratoryDiscovery PreclinicalClinical Development LeadLeadTransitionPhase IPhase IIPhase III IdentificationOptimization Chlorproguanil- dapsone (Lapdap™) - artesunate (CDA) AQ-13 new aminoquinoline OZ + PQP RBx11160 / OZ 277 + Piperaquine Isoquine (an improved aminoquinoline) New dicationic molecules Falcipain (cysteine protease) Dihydrofolate reductase (DHFR) Pf enoyl-ACP reductase (Fab i) 4(1H)-pyridones Back Ups Entantioselective 8-aminoquinolines Pyronaridine- artesunate Pediatric Coartem ™ DB289 (an improved pentamidine) Novel Macrolides Artekin ™ (dihydroartemisinin-piperaquine) Projects in the GSK/MMV mini-portfolio Next Generation (OZ) New Projects to be added Terminated Projects Merging Projects Portfolio October 2005

24. MMV Product Profiles Meet Public Health Needs Efficacy against drug resistant strains Cure within three days Low propensity to generate rapid resistance Safe in small children (< 6 mos.) Safe in pregnancy Appropriate formulations and packaging Low cost of goods

25. Intermittent preventative treatment in pregnancy Intermittent preventative treatment in early infancy P. vivax malaria (including radical cure) Severe malaria Prophylaxis MMV’s Ultimate Goal: a single-dose cure MMV Product Profiles Meet specific indications

26. MMV’s principle Project Partners

27. Discovery Exploratory Development FullDevelopment Registration Large Amounts of Candidate Medicine Synthesized Project Team and Plans Synthesis of Compounds Early Safety Studies Candidate Formulations Developed Extensive Safety Studies Screening Studies in Healthy Volunteers Phase I Candidate Medicine Tested in 3-10,000 Patients (Phase III) Studies in 100-300 Patients (Phase II) Clinical Data Analysis A long road to a new medicine …and expensive $ $ $ $$ $ $ $$$

28. Significant new commitments

29. Rising Global Spending.... Malaria R&D still lags behind

30. G8 Finance Ministers’ Conclusions on Development, London, 10-11 June 2005 6. Tackling diseases that undermine growth and exacerbate poverty in developing countries will require not only strengthened health systems, but also improved treatment, including universal access for AIDS treatment by 2010 and development of vaccines, including for HIV and malaria. We have made progress this year in implementing the Global HIV Vaccine Enterprise agreed at Sea Island, and are committed both to taking this further; and to scaling up our support for vaccines and medicines research through the successful Public Private Partnerships model. We call for a report on progress by the end of the year. We recognise also that advance purchase commitments (APCs) are potentially a powerful mechanism to incentivise research, development and the production of vaccines for HIV, malaria and other diseases. We asked Minister Siniscalco to consult the relevant institutions, governments and industry, with the aim of developing concrete proposals by the end of this year.

31. New Funding announced October 2005 = + $136 million for MMV UK DFID (£ 10 million) (£ 10 million) $ 100 million $ 18 million Previous total received / pledged $ 113 million New total received / pledged $ 250 million

33. INCOME 2000 - 2005 by Funding Segment Public/Philanthropic in inverse proportion to Business Plan forecast

34. The ‘Experiment’ phase is over …. The Product PPP model is working R&D Spending & Indirect Cost Trends Lean Structure Accountability (IAS/IFRS) Flexibility Quick Decision Rapid Execution MMV Research and Development Spending (base year 2000) trend Annual ratio of indirect costs as percentage of total spending

35. The Added Value of MMV as a model PPP MMV does not contract out R&D at fully-loaded cost Partnership is essential to the process Partners do contribute ‘in-kind’ resources estimated as at least 1:1 for public funding This effectively doubles the value of funds invested in PPPs estimated $ 30 to $35 millionPharma and other project partners have so far contributed to joint R&D projects with MMV an estimated $ 30 to $35 million

36. The Added Value of MMV as a model PPP MMV not for profit, but has a biotech-like commercial business model MMV (currently) totally focused on R&D Private sector staff experience - ‘speak the same language’ as their industry partners Common interest with Academia Funding & Credit Rating = Trust Mitigate Financial & Reputational risk for industry partners Facilitate ‘Access’ & Clinical trialsFacilitate ‘Access’ & Clinical trials

37. Results of Portfolio Analysis Model Cumulative probability of reaching the number of specified registered drugs by year (1) Cum. Prob. (%) 12345 Number of drugs ~47% chance of having at least 3 drugs registered by 2008 ~83% chance of having at least 2 drugs registered by 2008 (1)Includes: Euartekin, CDA, Pediatric Artemether/lumefantrine, DB289, OZ, Panda (2) (excludes Isoquine and OZ severe indication) Source: BCG portfolio model. Based on 4,000 iterations. Significant likelihood exists that more than one late-stage MMV product will gain approval by 2008-09

38. 1 yr2 yrs3 yrs4 yrs5 yrs6 yrs1 yr2 yrs Post- launchPre- launch Pharmacovigilance Regulatory Global Policy (WHO) Ensure proper scale up Post distribution Local Policy Distribution Public sector roll-out 7 yrs 3 yrs Manufacturing Ongoing forecasting First forecast Set country strategy Secure raw materials CMC / network strategy SRA (1) NRA (2) Phase III trials PQ (4) Share trial data WHO/country information sharing Share trial data Treatment guidelines EDL Private sector roll-out Ongoing dist. Financing procurement Drug delivery Procurement IEC GFATM App. Funds dispersed Treatment guidelines EDL (3) Product development pathway Ongoing dist. First country approval Public sector adoption Share trial dataWHO information sharing Phase IV research (1)Stringent Regulatory Authority (e.g., EMEA, FDA, other) (2)National Regulatory Authority endemic country; may require additional small scale local studies (3)Essential Drug List; (4) Pre-qualification Source: WHO website, GFATM research, interviews Ongoing activity Direct uptake impact Public market implementation in key countries will take several years

39. Conclusions MMV = a not for profit business model Operates as a ‘virtual pharma company’ Also seen as a ‘Social Venture Capital’ investor Convenes Public & Private players in the field Value for money fundamental Reputation = transparency, confidence, trust 2 or even 3 new drugs by 2010 Essential to engage more Industry Partners Essential for PPPs and Donors to recognise private sector (Industry) contribution to maintain their commitment

40. Funding Opportunities 5 th CALL FOR LETTERS OF INTEREST 1.Malaria Drug Discovery Research Proposals 2.Malaria Drug Natural Products Proposals MMV is a not-for-profit organization committed to the discovery, development and delivery of affordable antimalarial drugs through public- private partnership. It is expanding its R&D portfolio in order to maximize its chances of delivering a consistent stream of novel antimalarial drugs over the next decade. Two project categories are defined for this year’s proposals. 1.Malaria drug discovery projects that are directed toward the identification of a candidate compound(s) for entry into preclinical development  Projects may be at an exploratory stage but must have an identified target.  Projects at an early or late stage of the discovery process are also encouraged to apply.  Applications from single institutions (academic or biotech or pharma) or a partnership between an academic centre and a pharmaceutical company are welcome. The key determinant for funding will be the perceived chance of project success. 2. Malaria Natural Product projects are also solicited. They are more likely to succeed if applicants have a well-established infrastructure for a natural product programme, and can demonstrate one or more of the following characteristics:  Activity of the extracts together with identified compounds, against P. falciparum in vitro and in animal models  Demonstrated clinical efficacy of originating extract or identified compounds against malaria  Methodology for the identification and optimisation of active agent(s).  Projects that have already identified active agent(s) are strongly encouraged to apply. Application for funding is initially requested through submission of a 3 page letter of interest, to reach MMV (see below) no later than February 28, 2006. Electronic submissions are preferred. Details of this call for the two project categories, as well as project selection process can be obtained from the MMV web site (www.mmv.org) or by directing inquiries to the MMV offices, to the attention of:www.mmv.org Dr. Ian Bathurst, MMV, 20, Rte de Pré-Bois/PO Box 1826, CH-1215 Geneva 15, Switzerland E-mail: applications@mmv.org MMV gratefully acknowledges the funding and support it has received from: Bill & Melinda Gates Foundation, BHP Billiton, ExxonMobil Foundation, Global Forum for Health Research, International Federation of Pharmaceutical Manufacturers & Associations, The Netherlands Ministry for Developmental Cooperation, Rockefeller Foundation, Roll Back Malaria Partnership, Swiss Agency for Development and Cooperation, United Kingdom Department for International Development, United States Agency for International Development, World Bank, World Health Organization, WHO/TDR and Wellcome Trust.

41. Peter Potter-Lesage, Chief Financial Officer Thank you Malaria & the Multinationals: Public Private Partnerships APPMG All-Party Parliamentary Malaria Group BEAD Business Exchange on AIDS & Infectious Diseases Monday 6 February 2006 Peter Potter-Lesage MMV – Medicines for Malaria Venture

42. MMV ….. the original Vision (MMV Business Plan 2000)

44. Acronyms Public-Private Partnerships for Product Development:Financial, Scientific & Managerial Issues as Challenges to Future Success / Research Report WHO/CIPR – Commission on Intellectual Property Rights, Innovation & Public Health (Elizabeth Ziemba)

45. Novel MoAs Face Greater Uncertainty Than ACTs Cum. Prob. (%) Ability to source attractive new candidates critical to long-term productivity ~60% chance of having at least 1 drug registered by 2018 ~80% chance of having at least one drug registered by 2022 612345 Number of drugs Cumulative probability of reaching the number of specified registered drugs by year (1) However, generating combination drugs from MMV’s early-stage portfolio will be more challenging

46. MMV Portfolio May 2001 Dihydroorotate dehydrogenase inhibition (DHOD) Dihydrofolate reductase (DHFR) Falcipain inhibitors Lactate dehydrogenase project (LDH) ExploratoryDiscovery PreclinicalClinical Development LeadLeadTransitionPhase IPhase IIPhase III IdentificationOptimization Synthetic peroxide (OZ) Haem Polymerization

47. Income & Expenditure

48. Stakeholders Received /Pledged 2000 – 2005 No EU funding & only 2 EU governments

49. MMV Original Business Plan Figures