We have been in a “new normal” during the COVID-19 pandemic. In this installment of Ocular Product Development Insights, we’ll briefly review some perspectives on how COVID-19 is impacting start-ups and new entrepreneurs with their business plans and fundraising, and the adjustments they’re making in order to manage the situation.
There are many comparisons being drawn between the pandemic and the 2008 global financial crisis, since both have had severe financial impacts. Though the two differ in the speed and shape of the market reaction and recovery, their impact on macroeconomics and the official policy response, they both have in common high levels of uncertainty. Supported by regulations put into place after 2008, financial institutions were stronger in general going into the current crisis. We’ve seen a partial recovery of the market, and market volatility, though still high, has also decreased compared to the levels in March and early April.
When considering product development, uncertainty is the one constant. That said, the biotech index is at an all-time high (likely for multiple reasons), so the market is relatively healthy and still seeing investment despite the pandemic. Though there are delays in development processes in some cases, we’ve seen companies continue to be funded by institutional investors, other venture funds and strategic investors, and license deals still are being inked (e.g., the jCyte license with Santen announced in early May).
According to Strata Decision Technology, a company that makes software for tracking performance and analytics in health care, there has been up to an 81-percent decline in volume in ophthalmology compared to 2019. This is the highest decrease in volume among medical specialties, Strata says. For drugs, the updated sales and earnings reports, along with product revenues for the second quarter of 2020, will be key. While the overall growth rate of prescriptions slowed in the first quarter, in some cases sales were still up compared to prior quarters and Q1 2019. In other cases, sales plateaued or declined. Ophthalmic products are among the segments with the greatest decline in drug sales volume in recent months, driven by the fact that a large number of scripts for eye drops are typically used in non-emergent and elective cases, which had been halted for weeks. So, we’ll have to see the updated reports down the road, if and how the decline in prescriptions impacts the funds allocated for investments in new products, and how the structure of deals are impacted, with the likely result being limited near-term cash payments.
Potential investors, existing investors and potential license partners will want to know how you plan to manage during the COVID-19 pandemic and how it will affect your development activities. Showing that you’re prepared should be part of your plan. Ron Weiss, founding partner and principal of Infocus Capital Partners, a venture fund specializing in ophthalmology, offers the following advice to investors raising capital: “Try to be as transparent as possible,” he says. “In addition to advocating for the attributes of the company, discuss where you see challenges specific to COVID-19, and be willing to discuss the competitive landscape in the context of the current situation.”
Following are a few comments regarding key areas of development:
• Preclinical vendors. Speaking from the experience of our own preclinical group, lab activities—specifically, animal research—have recovered to near their normal operating levels, including the supply of the animals. However, currently there are delays in the supply of drugs and active pharmaceutical ingredients (API) coming in. So, with preclinical studies, it’s more about building in additional pre-study time to account for delays in making and receiving supplies and drugs. GLP toxicology vendors and manufacturing facilities are making progress, though it’s wise to build in additional lead times and stay in close contact with these entities regarding scheduling, as these are gating items for the clinical trials.
• Regulatory. We’ve seen that the Food and Drug Administration, European Medicines Agency and Japan’s Pharmaceuticals and Medical Devices Agency have all been responsive, scheduling meetings without significant delay and responding to questions. Regulatory meetings have been converted to teleconferences, of course, but for the new entrepreneur it’s helpful to know that more regulatory meetings have been conducted as teleconferences in recent years anyway. You can expect to receive the same quality feedback from the FDA on a conference call, and you shouldn’t expect this to impact the regulatory guidance you’ll receive.
• Clinical trials. The pandemic certainly has had an impact on the planning of clinical trials, the extent of which depends on the nature of the trial, the drug’s indication and the centers involved. In general, studies involving indications that are sight-threatening, which require patients to come to the office for therapy (such as an intravitreal injection), are less impacted than those trials that are non-sight threatening, such as safety studies using normal, healthy volunteers. The patient enrollment for device studies that involve elective surgical interventions will most likely be impacted by the pandemic, especially if the study is being conducted in an academic institution.
The viability of trials that are planned for next year is difficult to predict. We anticipate that the situation will be more under control and sites will be back operating by then. But here are some things to keep in mind as far as more immediate timelines: If you have a trial planned this year, you need to consider performing a specific COVID impact assessment at the sites, which includes: collecting information on COVID cases; noting trends in the local geographic area; observing local recommendations at each site; learning how sites are handling non-essential patient visits; seeing how COVID has impacted regular operational processes at the sites; and digging into the pandemic’s impact on patient recruitment at each site, with the understanding that private practice enrollment will differ from that in academic settings.
Companies need to be honest in their assessment of projected enrollment rates and consider whether they’re treating an emergent issue or performing an elective procedure. One should consider building back-up sites into the study plan, to account for lower recruitment or situations in which some sites may be slower to begin than others.
All of this should be built into your COVID-specific risk-management plan that you communicate to potential or existing investors, to build confidence that you’ve thought things through. The time can also be used to pre-screen subjects for the study.
Clinical protocols should consider the guidelines issued by the FDA related to COVID-19’s impact. These relate to how protocol deviations are handled, especially with scheduling, visit windows and how safety follow-up is done, including remote patient check-ins and virtual visits.
Telemedicine has been booming, and is now driven by the need for social distancing and benefiting the increased flexibility in some regulations (i.e., emergency telemedicine device approvals). Our clinical team at Ora is leveraging its virtual clinical trial offering (Virtual EyeSite) in response to COVID-19. Its objectives are to maximize the potential for at-home assessments using telemedicine, provide technological and logistics support of investigational product management and develop other innovations to support endpoint collection.
One example is the recent inclusion of a smartphone device for at-home imaging of the lid margin in a multicenter trial for atopic keratoconjunctivitis, (clinical trial code: NCT04296864).
• Planning/operations. With each of the above, the consistent message is that there is a higher level of uncertainty that your plans need to take into account. Create a strategy that’ll let you hit the ground running when the pandemic ends. Doing this requires remaining in close and regular communication with vendors/collaborators so you’re not relying on proposals with timelines that were defined prior to the pandemic. Overall, companies need to be in a cash conservation mode during fundraising (and post-funding). This may require deciding which activities are more important in order to advance the program. Focus on critical-path items needed to maintain timelines and drive decision making. Perform multiple analyses for different COVID-19 scenarios to show investors (potential or existing) that you have a handle on the situation and will be able to adapt to this changing environment in the future. REVIEW
Review and comments on this column were provided by Aron Shapiro of the Corporate Development group at Ora Inc., and the clinical team members at Ora.
Mr. Chapin is senior vice president of corporate development at Ora, which offers device and drug consulting, clinical research and development, and strategy and support to catalyze new client and partner initiatives. The author welcomes your comments or questions regarding product development. Please send correspondence to mchapin@oraclinical.com or visit www.oraclinical.com
