Thomashwang

Nova Challenge Biotech Business Contest / BDP Corporate Business Plan / Thomas J. Hwang

Bio-Development Pharmaceuticals, Corp. (BDP) Corporate Business Plan I. INTRODUCTION According to the World Health Organization’s (WHO) Expert Committee on Tropical Diseases, onchocerciasis is the world’s third leading infectious cause of blindness, affecting nearly 20 million people, primarily in remote areas of Africa (in over thirty countries), the Middle East (Yemen) and Americas (Guatemala, Mexico, and Ecuador among others).1 Onchocerciasis is also known as river blindness because the primary symptomatic condition is blindness induced by severe infection from the parasitic microscopic worm (microfilariae) onchocerca volvulus and because many of the epidemic loci are at or near rivers or rapidly flowing streams. The most common form of transmission of the parasite is through the bite of an infected blackfly of the Simulium species, upon which the worms subsequently spread rapidly throughout the body. The death of the worms, which can live and perpetuate for up to fifteen years, triggers an immune system response, resulting in the destruction of neighboring tissue, such as the eye. An estimated 300,000 to 500,000 have been irreversibly blinded by onchocerciasis and even more forced to suffer from visual impairment.2 Onchocerciasis is infectious and spreads from person to person through the blackfly intermediary – that is, blackflies that bite humans infected with the disease can pass along the microfilariae to others. This infection mechanism is particularly dangerous, as microfilariae cycle from human to blackfly to human again, such that multiple bites sustained by an individual will radically increase the disease’s severity. Generally classified as a neglected tropical disease, onchocerciasis is endemic in the developing world, with 99% of all cases found on the African continent.3 It is the mission of Bio-Development Pharmaceuticals, Corp. (BDP) to serve as the private sector leader in the eradication of the disease as well as liaison and consultant for the multitude of existing actors in international public health

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Nova Challenge Biotech Business Contest / BDP Corporate Business Plan / Thomas J. Hwang

programs. Indeed, the goals of the company are illustrated in our name: the innovative use of biotechnological progress to drive sustainable economic, political and social development. Thus, the work of BDP does not end in the development and distribution of a “cure”; rather, BDP also seeks to introduce affected citizens to proper sanitation, water purification and health techniques that also reduce the frequency of onchocerciasis and other tropical diseases. The founding core of BDP is not a single medication; it is the guiding vision of improving the livelihoods of millions of poor and vulnerable populations. Our corporate philosophy can be summarized in the following motto: Innovation, Compassion and Vision. BDP seeks to challenge the stereotype that socially-oriented companies cannot also be economically profitable. Projected earnings models state that investors can expect nearly 10% more from companies with stated and demonstrated commitments to society and the environment than their counterparts. Finally, BDP has the potential to achieve more than traditional public-sector, not-forprofit or governmental-based organizations by (1) developing the most cost-efficient medication and streamlined production process by drawing from the benefits of the free market and (2) laterally collaborating with other private-sector actors, mainly pharmaceutical companies. II. SCIENTIFIC MECHANISM Scientists thus far have discovered the mechanism by which onchocerca volvulus spreads from the blackfly to the human body. First, the black fly, almost always female, ingests the parasite from the dermis of another infected organism through what is known as a “blood meal.”4 The microfilariae mature and eventually migrate to the thoracic muscles in the fly’s wings and finally, to the proboscis and saliva.5 Through the bite wound, the parasites from the fly’s saliva enter the human circulatory system vis-à-vis the blood stream. The larvae form nodules in the subcutaneous tissue, mature into adult worms, and them release up to 1000 microfilariae per day. Dying microfilariae release

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Nova Challenge Biotech Business Contest / BDP Corporate Business Plan / Thomas J. Hwang

Wolbachia-derived antigens, which trigger strong immune system responses and induce inflammation.6 Humans are the only known host of onchocerca volvulus, though the potential for mutation remains open. A variety of medical conditions are caused by contraction of onchocerciasis. The normal incubation period of onchocerciasis ranges from nine to twenty four months after the first bite. A small percentage of affected individuals report no initial symptoms. From this point the infection may be manifested in dermatitis, skin rash, eye lesions, subcutaneous nodules under the skin, intense itching, and pain or disfigurement. Dermatitis ranges from acute popular dermatitis, caused by scattered pruritic papules, to total skin atrophy and depigmentation. In the most severe cases, the lesions in the eye progress into blindness as the microfiliare migrate to the cornea of the eye. The initial punctate keratitis, which may clear up if inflammation subsides, can degenerate into sclerosing keratitis. While the disease disproportionately impacts residents of developing countries, onchocerciasis is also a risk for travelers who stay in affected regions for prolonged periods of time, such as missionaries and volunteers.7

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Nova Challenge Biotech Business Contest / BDP Corporate Business Plan / Thomas J. Hwang

In part due to the World Health Organization’s disease control programs, the incidence of onchocerciasis has dropped significantly. The Onchocerciasis Control Programme (OCP) was launched in 1974, as a joint effort of the WHO, World Bank, United Nations Development Programme (UNDP), and the Food and Agriculture Organization (FAO), covering nearly 30 million people in eleven different countries. Disease transmission was controlled through the larvicide spraying of fast flowing rivers. OCP activities were terminated in 2002, deemed to be a success. In 1992, the Onchocerciasis Elimination Programme for the Americas (OEPA) expanded the disease prevention initiative’s reach to Central and South American countries that have begun showing signs of incidence and similarly, the African Programme for Onchocerciasis Control (APOC) covered nineteen more countries.8 The most common treatment program, employed by the WHO and these programs, governments and non-governmental organizations, involves vector control and mass administration of ivermectin, an oral drug donated by Merck & Co., Inc. (Merck) through the Mectizan Donation Program (MDP) since 1988.9 Chemically, ivermectin is known as 22, 23-dihydroavermectin B1a + 22, 23-dihydroavermectin B1b.Ivermectin paralyzes the microfilariae, prevents them from reproducing and also prevents the dying worms to cause the itching symptoms. The drug therefore prevents both “morbidity and transmission.” Superficial skin biopsies (known as “snips”) are used to microscopically identify the parasites and, because of the occasional false positive result, serologic testing of antibodies is also used. The oral ivermectin dosage is generally approximately 150 micrograms per kilogram, a maximum of 12 mg, during a time frame of six to twelve months. While there is currently no known vaccine, preventative drug or chemoprophylaxis available, ivermectin has substantially depressed onchocerciasis prevalence levels. However, based on recent Page 4 of 11

Nova Challenge Biotech Business Contest / BDP Corporate Business Plan / Thomas J. Hwang

discoveries, it seems that the disease has a change to resurge. According to a study published in The Lancet and also publicized in a BBC news article, the worm may be developing resistance to ivermectin.10 The longitudinal study conducted in select communities in Ghana from 2000 to 2005 showed that in spite of annual ivermectin treatments, the incidence of cases of infection doubled and that “the ability of IVM [ivermectin] to suppress skin microfilariae repopulation was reduced in some communities that had received 6-18 years of [the drug].”11 Genotyping studies have associated resistance to ivermectin with genetic markers, particularly the β-tubulin gene in human onchocerca volvulus. Sara Lustigman and James McCarter conclude in their paper: The finding that IVM treatment selected for β-tubulin heterozygotes and that this selection was dependent on dosage raises important concerns for the current river blindness control programs. These concerns are heightened by the fact that this gene has been linked with IVM resistance in another parasitic nematode, and by the recent evidence that IVM resistance is occurring in O. volvulus. Semiannual or more frequent treatments are ongoing in some endemic areas and are under consideration in other areas. Such treatment might increase the selection pressure. Therefore, Bourguinat and colleagues’ study is a wake-up call for control programs to select their treatment regimens carefully and to develop plans for detecting IVM resistance and the associated genetic markers (control programs will require additional funding for these plans). This study presents a possible structure of study design that will incorporate the detection and validation of the genetic markers associated with IVM resistance.12

Given the frightening prospect of ivermectin-resistant parasites, Bio-Development Pharmaceuticals (BDP) proposes the following tripartite treatment program available to local and municipal authorities as well as national governments. Component 1: Enhanced Antiparasitic Regimens (EAR) Instead of solely using ivermectin in the first line of attack against onchocerciasis, particularly in newly affected regions, BDP recommends a treatment regimen that proportionally relies on ivermectin and its complementary macrofilaricide, doxycycline. A tetracycline antibiotic, doxycycline has many clinical applications and is most famously used in prophylaxis against malaria, anthrax and Yersinia pestis (the infectious agent of bubonic plague). Adjunct treatment has been shown to “significantly lower Page 5 of 11

Nova Challenge Biotech Business Contest / BDP Corporate Business Plan / Thomas J. Hwang

microfilarial loads in the host and may have activity against the adult worms”13 because doxycycline kills the endosybiotic Wolbachia bacteria and, therefore, also the nematodes. Ivermectin alone does not kill the adult parasites but instead “reduces the numbers of microfilariae in the skin so the disease does not progress.”14 Component 2: Accessible and Affordable Vaccine Candidates (AAVC) The aforementioned macrofilaricide cocktail must be supplemented with a vaccine to ensure long-term sustainability of disease eradication. Following the model of the International Vaccine Institute, BDP will collaborate with non-profit and for-profit organizations in the development of an anti-onchocerca vaccine. Substantial progress has been made in the development of the vaccine, with the isolation of several expression vectors, in particular pOVEX, which combines the “advantages of the expression vectors pGEX-3X and pJC2o” and “produces a fusion protein with the 24 kd Onchocerca volvulus glutathione S-transferase (OvGST2) which is easy to purify in one step from bacterial extracts under non-denaturing conditions using glutathione-sepharose chromatography.”15 pOVEX is of interest, in addition, because of its role in the production of parasitic antigens for the “analyses of host humoural and cellular responses to these proteins and for immunization studies.”16 Component 3: Public Health Policy Consulting Services (PHPCS) As mentioned previously, the mission of the BDP extends beyond the creation of a single vaccine. Rather, BDP also anticipates a secondary role as a consultant to national governments and ministries of health in the dissemination of public health information and in the development of efficacious and appropriate campaigns to eradicate onchocerciasis that include best-practices recommendations. These advisory notifications could range from wearing long-sleeve attire during peak seasons of infection to timetables of insecticide spraying in localities. BDP, in consultation with the World Health Organization, is also prepared to work with governments in surveying heavilyaffected regions for key focal points of treatment regimen-targeting. Page 6 of 11

Nova Challenge Biotech Business Contest / BDP Corporate Business Plan / Thomas J. Hwang

III. CORPORATE STRUCTURE BDP is a for-profit organization governed by a Board of Directors, on which the President and Chief Executive Officer (CEO) serves as Chair. Under the Board of Directors is the Scientific Steering Committee, composed of internal and external scientific focal points and managers of specific focus areas within the corporation (i.e. doxycycline manufacture, vaccine clinical trials, etc.). The Chair of the Scientific Steering Committee will also sit on the Board of Directors and will be responsible for overseeing the scientific, pharmaceutical and strategic management of the company. Given the nature of the company’s work, mission and scope, BDP will collaborate extensively with both private and public organizations. In particular, BDP will coordinate its activities organized under the following thematic areas: 1. Pharmaceutical and Immunization Efforts – Merck & Co. (ivermectin), Pfizer, Inc.

(doxycycline), Food and Drug Administration (FDA), Bill and Melinda Gates Foundation, Carter Center 2. Public Health Consulting – World Health Organization (WHO), World Bank, United Nations

Development Programme (UNDP), UN Food and Agriculture Organization (FAO), UNICEF, USAID, Centers for Disease Control and Prevention (CDC), Non-governmental organizations This interconnectivity naturally calls for hires to be made from several collaborating institutions. More specifically, a tentative hiring schedule of selected positions would be as follows: Position Chief Executive Officer Chair of the Scientific Steering Committee Vice President of Vaccine Development

Preferred Previous Experience High level lateral recruit from biopharm company. Preferably with MD and MBA, or equivalent medical and business experience. Top academic scholar in international public health and neglected tropical diseases CDC, International Vaccine Institute, similar institutions, preferably with experience in critical vaccines (such as HIV/AIDS)

Vice President of Health Policy World Health Organization and Strategy Page 7 of 11

Starting Base Salary† $500,000 $200,000 $150,000 $125,000

Nova Challenge Biotech Business Contest / BDP Corporate Business Plan / Thomas J. Hwang

Vice President of Marketing Director of Clinical Trials Vice President of Grants and Major Gifts Manager of Governmental Relations

Merck, Pfizer, Bayer, Novartis Academic pharmaceutical background

$100,000 $90,000

Gates Foundation

$75,000

UN agency or experience in an African country’s Ministry of Health

$60,000

† Starting base salaries do not include bonuses, restricted stock awards, common stock incentives, retirement

savings and other (i.e. health and pregnancy) benefits

BDP will operate two offices that reflect the company’s focus and interests. The primary corporate office will be in New York City with research and development outsourced to nearby locales in the tri-state metropolitan area, close to prominent research institutions and universities. Company strategy and corporate management will originate from BDP’s headquarters in the United States. BDP will also be housed in an office in Abuja, Nigeria from which all project implementation will be made and contact with regional governments to monitor the progression of specific campaigns. Abuja was selected for the second BDP office because it currently is the hub of United Nations activity in Nigeria and Central Africa (regions heavily affected by river blindness) and also because 99% of all river blindness cases are in Africa. The WHO, World Bank, USAID, UNICEF, UNAIDS, and the Nigerian Ministry of Health have offices in Abuja. Proximity to these organizations will certainly facilitate increased cooperation. IV. ECONOMIC AND SOCIAL PROFITABILITY Expected expenditures will inevitably cause investors to question how BDP can be profitable, both economically and socially. BDP requires a unique corporate structure that yields maximal results to shareholders and citizens of the world alike. Pursuant to the Bayh-Doyle Act, biotech start-up companies, many of them small and founded by university researchers, carry out the initial clinical phases of drug development. They then sign contracts with established big pharmaceutical companies, effectively exchanging research for marketing. When a patent held by the biotech company is eventually licensed to a pharmaceutical company, both are able to profit from the mutually symbiotic

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Nova Challenge Biotech Business Contest / BDP Corporate Business Plan / Thomas J. Hwang

venture. This model is revised for BDP because (1) customers of BDP’s products in river blindness cannot afford traditional alternatives and (2) social marketing is shared by national governments (through public health campaigns). Thus, to maximize cost-effectiveness, BDP will hold a diversified portfolio of drugs, products and consulting services for varied diseases. Some of these will be for customers in the Western World, specifically the United States, and will therefore reflect the prices of typical prescription drugs. Even in its onchocerciasis operations, BDP’s innovative corporate structure minimizes unnecessary costs. The goal of BDP in its efforts against onchocerciasis is to be profit-neutral. Profitneutral status (or “non-profit”) in this segment of the portfolio will also enable us to make a case for grant applications, with the assistance of the company’s General Legal Counsel. First, the Vice President of Grants and Major Gifts will be charged with procuring an initial pool of funds for basic R&D as well as covering administrative costs from the vast array of grant-giving organizations in the field of public health. The initial-public offering (IPO) will also contribute to this general capital pool, to be tapped for catalyzing the company’s activities. Second, the Director of Clinical Trials will partner with pharmaceutical companies and academic institutions in the development of the treatment regime and the vaccine. BDP will in essence design the study and outsource the day-to-day clinical operations to partner organizations, utilizing the same model as public-private partnerships such as the Global Alliance for Tuberculosis Drug Development. Third, as mentioned previously, the burden of marketing will be shared by national governments, BDP, and pharmaceutical partners. The Vice President of Marketing will have the responsibility, therefore, of being the liaison between corporate partners and their respective marketing teams and the management of BDP. The most important benefit is the reputation gained by successfully leading the global fight against a disease. Such publicity, as well as deepened trust from governments and intergovernmental agencies, will ensure that profit-positive ventures (typically, patented drugs in the West) generate Page 9 of 11

Nova Challenge Biotech Business Contest / BDP Corporate Business Plan / Thomas J. Hwang

sufficient capital for corporate sustainability and shareholder satisfaction. Social profitability must, of course, not be forgotten. It must be noted that with only $100, we will be able to prevent 2.5-14 years of blindness, an additional 3.5-20 years of irritating skin disease and 3-17 years of impaired vision. Onchocerciasis is a preventable disease that has been ignored for too long and with waning public interest, the risk of traditional drug-resistant strains of the parasite looms on the horizon. It is BDP’s mission to eradicate river blindness and restore vision and life to the afflicted throughout the world. WORKS CITED

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1

World Health Organization, Onchocerciasis (WHO Control of Neglected Tropical Diseases, 2009) Accessed from: 2 Sightsavers International, What is River Blindness (2008) Accessed from: 3 World Health Organization, Onchocerciasis. 4 World Bank, Global Partnership to Eliminate Riverblindness: The Disease (2007) Accessed from: 5 World Health Organization, Life Cycle of Onchocerciasis (African Programme for Onchocerciasis Control, 2008) Accessed from: < http://www.who.int/apoc/onchocerciasis/lifecycle/en/index.html> 6 Ibid. 7 James, William D., Timothy G. Berger, et al, Andrew’s Diseases of the Skin: Clinical Dermatology (Saunders Elsevier, 2006) 8 World Health Organization, African Programme for Onchocerciasis Control (2008) Accessed from 9 African Programme for Onchocerciasis Control, Community-directed Treatment. 10 BBC News, “River blindness resistance fears” (2007) Accessed from: 11 Lustigman, Sara and James P. McCarter, “Ivermectin Resistance in Onchocerca volvulus: Toward a Genetic Basis”. PLoS Negl Trop Dis. 2007 October; 1(1): e76. 12 Ibid. 13 Taylor MJ, Bandi C and Hoerauf A, “Wolbachia bacterial endosymbionts of filarial nematodes” (Adv. Parasitol., 2005) 60:245-84. Accessed from 14 CDC Division of Parasitic Diseases, River Blindness (Onchocerciasis) (2007) Accessed from: 15 Liebau, Eva, Spillner E, Henkle-Duhrsen K, “pOVEX vector: prokaryotic expression and purification of onchocerciasis vaccine candidate antigens as fusion proteins with the 24 kD Onchocerca volvulus glutathione S-transferase.” Tropical Medicine & International Health. 2(7):691-694, July 1997. 16 Ibid.