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Entrepreneurial Thought Leaders Seminar
Donald P. Francis, MD, DSc
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
Mortality rate per 100,000/year
Infectious Disease Mortality Rates in the U.S.
40
Diptheria
Pertussis
Measles
Poliomyelitis
AIDS
30
20
10
0
1900
1920
1940
1960
Year
1980
People Living with HIV/AIDS
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
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
Source: UNAIDS, AIDS Epidemic Update, Dec. 1998
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
Challenges
Business
Scientific
Social value
How Many Candidate HIV Vaccines Could Be
Funded by One Year's Direct Medical Costs?
$ 18.0 billion
$ 0.3 billion
(medical costs)
(develop. costs)
61 candidate
vaccines
HIV-1 Vaccine Development
Pipeline or pipette?
Phase I
Phase II
Phase III
27 candidates
2 candidates
1 candidate
"Maybe in the next 10 years if we work very hard,
there may be 3 candidate vaccines in PhaseIII."
Dr. Jose Esparza, UNAIDS
March, 1999
Cost of HIV Vaccine Development
400
300
Investors
cost
200
100
Company
revenue
0
0
2
4
6
Years
8
10
Opportunity Costs
Huge social need
Questionable return
? Market (esp developing countries)
? Social value (demand?)
Why Vaccines Fail to Compete
Vaccine/Therapeutic
Market Comparison
Note: Vaccine market data 2000, pharma sales 2001
Development of Vaccines vs Anti-viral
Agents for HIV
Historical
Dev Time
Social Demand
Num Available
Anti-viral
Vaccines
Anti-viral
Drugs
Many
Longer
Low
None
Few
Shorter
High
Many
HIV Prevalence vs GNP
VaxGen’s Vaccine
Almost 20 years
$280MM invested
A long way to go
AIDSVAX Development History
AIDSVAX research begins
IIIB produced
Chimps protected (IIIB)
Nucleotide squence
of HIV determined
Chimps protected (MN)
B/B and B/E produced
IIIB Phase I
MN Produced
Antibodies to rgp 120
neutralize HIV
MN Phase I
85
86
87
88
89
90
Genentech, Inc.
B/E Phase I/II
B/B Phase III Trial
Antibodies
Inhibit binding
to CD4
84
B/B Phase I/II
MN
Phase II
91
92
93
B/E Phase III Trial
97
98
99
00
01
VaxGen, Inc.
02
03
AIDSVAX –Cost of Development
Capital Sources:
Investment:
Genentech
$ 50M
Private capital:
$269M
VaxGen
$130M
US Government: $11M1
Celltrion
$100M
______
$280M
NGO
$0
_____
Total
$280M
Total
1 Includes CDC and NIH
Efficacy Trial Results
Thai trial – no efficacy
US/Europe Trial – Low efficacy
AIDSVAX B/B - Efficacy by Subgroups
100%
Weighted cohort
Efficacy
77.6%
86.5%
65.7%
50%
5.8%
0%
Overall
Volunteers (vacc + plcbo)
*Expected infections, VE=0
Observed infections (vacc)
p-value (unadjusted)
Black
Women
5009
194
191
498
33
12
314
17
4
268
8
1
NS
<0.01
<0.02
NS
*Adjusted for 2:1 vaccine:placebo
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 lessdeveloped parts of the world
• Dependent on outside (Gates) funding