BUSINESS
C&EN TALKS WITH BY MAUREEN ROUHI
UNAS. RYAN Avant Immunotherapeutics head offers model for philanthropy by preprofitable companies
U
NA S. RYAN, PRESIDENT AND
chief executive officer of the vaccine development company Avant Immunotherapeutics, dreams of helping people in poor countries who might die of preventable diseases. If Avant were already profitable, she might follow the philanthropic model of big pharmaceutical companies that donate life-saving drugs to poor countries. Those firms can do so because they can manufacture incremental amounts without incurring significant additional costs, and they are encouraged to do so because the giveaway offers a tax advantage. However, this model is unsuitable for companies like Avant that have yet to turn a profit, Ryan says. Based in Needham, Mass., Avant is a publicly traded biotech company that is developing vaccines for applications ranging from infectious diseases and biodefense to cholesterol management and food safety. Underlying its portfolio are patents that benefit delivery, manufacture, and distribution, adding up to an ideal vaccine profile: safe, effective, single dose, orally delivered, and stable at room temperature. These are the very same vaccine characteristics needed in the developing world, Ryan says. But because the vaccines the developing world really needs do not have significant markets in the developed economies, the financial incentive to make them available is low. "I was a little girl who at age five wanted to be a missionary doctor," Ryan says. "Now, it is my job to return value to my stockholders. How do I make those two parts of my life work?" Ryan says the answer lies in leveraging "intellectual property excess"—that is, by making available the intellectual property that Avant already has to develop products that are needed in poor parts of the world but that on their own are unattractive to investors. She explains that the patents underlying Avant's technologies were acquired and paid for to develop the products that will, she hopes, yield high returns to investors. HTTP://WWW.CEN-ONLINE.ORG
These include vaccines to protect travelers from diarrheal illnesses caused by Shigella, Campylobacter, or enterotoxigenic Escherichia coli infection. The annual market for such vaccines is estimated at more than $600 million. But the same patents can be applied to vaccines against diseases that kill people in the developing world. An example Ryan offers is a cholera vaccine that Avant had been developing for the U.S. market. Despite very good Phase II clinical trial results in the U.S., she says, Avant's board of directors was reluctant • ? to finance Phase III trials at the scale required by the jk Food & Drug Administration —larger than what the company proposed—because the cost was not justified by the small potential U.S. market. So Ryan offered the vaccine for further development in Bangladesh, where clinical trials are being carried out by the Seoul-based International Vaccine Institute (I VI) through a program funded by the Bill & Melinda Gates Foundation. "I could offer the single-dose oral vaccine to Bangladesh because Avant already owns the intellectual property," Ryan says. The vaccine is attractive because it is single dose and easy to distribute. Ryan believes it can be delivered at very low cost. "It's fine to talk about delivering things at cost to the developing world, but I think it's important to lower that cost because there is a cost barrier for most vaccines," she says. "I intend to get our cost of goods and of getting the vaccines to people below that threshold." Technology will play a big role in bringing costs down, Ryan is convinced. Manufacturing costs, for example, can be lowered with Avant's VitriLife technology in which vaccines are dried under vacuum into a glass that is milled into a temperature-
stable powder. The cost saving comes from the shorter time that vaccines must be kept in reactors, she explains. Furthermore, because the vaccine is produced in a form that does not require refrigeration, the costs of transport and distribution are lower. Ryan says Avant is supplying the materials for the Bangladesh clinical trials at no cost. "But we won't be able to do that for commercial distribution. If the vaccine is approved, we assume that the World Health Organization or the United Nations or the government of Bangladesh would supply it to the Bangladeshi people. We would be willing to have the vaccine made in the developing world. As long as I can keep my products for the U.S. market, I'm perfectly happy to have this cholera vaccine manufactured locally" Ryan recognizes that even if the cholera vaccine could bring in some profits, investors willfrownupon having their dollars spent on a product with low returns. No investor dollars are involved in the Bangladesh project, she says. The company already owns the technology, and IVI is financing clinical trials. "When I go to my investors, I tell them about the products we are developing for the U.S. market. I also tell them that they are not paying for development of products for the developing world but that if there is a margin from those, they will enjoy it." Ryan also acknowledges the danger of making technologies available to countries with no strong tradition of respect for intellectual property "I am against importation of drugs into the U.S. from countries that lack the rigorous manufacturing controls mandated by FDA," she says. "Moreover, it is important that we maintain control over viable commercial markets for our products, so that we can provide a return to our investors who supported their development. But for much-needed applications of our technology in the developing world, where a large commercial market does not exist, we recognize that local manufacturing may be necessary despite the risk that our patents may not be honored." C & E N / N O V E M B E R 2 4 , 2003
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