Data localisation laws are becoming more prevalent, but beyond its cost to businesses, critics argue such regulations are neither necessary nor sufficient for ensuring data security. Image: Canva

On October 1, a decree that requires international firms with services in Vietnam to store users’ data within Vietnamese territory and set up local offices went into effect, reported Vietnam Express.

This new decree is an addition to Vietnam’s existing Cybersecurity Law. It stipulates that data belonging to users, from account information to data about users’ relationships, must be stored in Vietnam for at least 24 months. International firms must complete data storage requirements and set up local offices within 12 months of being asked to do so by the Ministry of Public Security.

In early September, US business groups representing technology companies such as Amazon, Google, and Meta said in a letter to Prime Minister Pham Minh Chinh that this law may affect investments and make it difficult for companies to assess the cost of doing business in the Southeast Asian country, reported Bloomberg.

Vu Tu Thanh, the Vietnam representative of the US-Asean Business Council, told Bloomberg that the new decree was drafted with the consideration of balancing economic interests and national security, and is more flexible than those in previous drafts.

An opinion piece on Nikkei Asia also highlighted that the decree may provide further leverage for the country’s censorship requests to Big Tech.

Data localisation across the world

Vietnam’s decree is part of a broader trend of data localisation in Southeast Asia and the world, which refers to the practice of:

1. requiring data to be collected, processed, and/or stored within a nation’s borders, so that foreign actors cannot access them
2. requiring a copy of data to be kept in local servers or data centres, such that law enforcement agencies can access such data if found necessary
3. placing limits on the transfer of personal data across borders

The primary reasons for data localisation laws involve matters of national security. For instance, in June 2022, Chinese-owned social media app, TikTok, said that it planned to move the private data of American citizens to cloud servers in the US to allay privacy concerns, reported The New York Times. Keeping the data of American citizens within America may lower the risk of foreign governments accessing such data.

Storing data locally may also help local law enforcement agencies access data if necessary.

From 2013 to 2018, US law agencies were embroiled in a legal battle with Microsoft when the company refused to hand over data stored on a data centre in Ireland, according to TechCrunch. The case was eventually resolved with regulations that stipulated that companies must provide information properly requested by law enforcement regardless of location.

Countries may also pose limits on the transfer of personal data across borders if they assess that data protection regimes in other jurisdictions may not be adequate. For instance, the EU’s General Data Protection Regulation (GDPR) ruled that personal data can only be transferred beyond the EU to external parties if the recipient country possesses a level of data protection equivalent to that of the EU.

In a journal article in the Asian Journal of International Law, Benjamin Wong from the National University of Singapore found low but significant levels of data localisation within ASEAN, with countries such as Philippines, Singapore, and Thailand possessing restrictions on the transfer of personal data across borders until certain standards of data protection are met.

Countries like Indonesia and Vietnam have regulations on processing and storing personal data within the nation’s borders, as well as on hosting a local copy of data. East Asia Forum reported that Indonesian regulations require all public sector data to be managed, stored, and processed within the country.

Costs of data localisation

However, data localisation may come at a cost to economic growth and investments, as well as inhibit the performance of certain technologies.

First, data localisation imposes additional costs on companies, who may have to spend additional resources on setting up server rooms, data centres, and local offices, says Lim May-Ann, Emeritus Director of the Asia Cloud Computing Association. Larger countries may require more servers and infrastructure to properly serve the market, leading to high compliance costs to business.

If the cost is too high, companies may choose to pull out or suspend operations. In 2016, online payments company PayPal suspended operations in Turkey as a result of new regulations that required companies to fully localise their information systems within the country, reported TechCrunch.

Data localisation can also impede free trade and affect the regional economic development of ASEAN. Wong noted in his journal article that that such policies could obstruct businesses’ access to foreign markets. This may run counter to the stated aims of the ASEAN Framework Agreement on Services, which aims to liberalise the trade in services, he argued. In fact, trade deals such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which Vietnam is party to, includes pledges against data localisation, said Nikkei Asia.

Finally, data localisation may inhibit the performance and efficiency of current technologies like cloud computing and artificial intelligence. Cloud computing works most efficiently when data is able to flow across borders, and artificial intelligence works best when it has a diverse range of data sources to draw upon. Data localisation policies may inhibit both these functions.

A tool among a broader arsenal

Perhaps data localisation is best applied as one tool amongst many, with a risk-based approach in mind.

First, it is important to note that data localisation policies on their own may not necessarily improve the security of data. Data stored elsewhere on the servers of a cloud service provider may have higher cybersecurity controls than a local data centre, for instance. Restrictive data localisation policies may also be harder to enforce, notes Lim.

This is where a risk-based approach may prove useful, where each country sets its own risk level and decides how it would like to balance security and economic considerations.

A risk-based approach first requires countries to have strong data classification models, which can help identify which data is more sensitive than others, says Lim. For example, personally identifiable information may require more protections than non-personal data, and data directly related to national security may be best stored within national borders.

As it may not be feasible or cost-effective to store all data within one’s country, a risk-based approach lets you “put as large a padlock as you want on the data that you think is most important,” says Lim.

In Singapore and Malaysia, personal data protection laws regulate that organisations transferring data across borders have a responsibility to ensure that data continues to be protected at comparable levels to that of their home country. Singapore’s Monetary Authority of Singapore has a technological risk management checklist, for one.

Other security best practices, such as the principle of least privileged access and zero trust systems, which requires portals to continuously verify one’s identity through methods such as multi-factor authentication, can help secure data. Lim says that banks in the region, from Thailand to the Philippines, have been leading the front on the adoption of such practices.

Finally, the growth of privacy-enhancing technologies may also prove to reduce barriers to data transfers, as a recent GovInsider article noted, though Lim says that technology can only help insofar that people on the ground understand how to adopt and use such tech.

If ASEAN countries aligned on data protection standards, this would help encourage further economic integration and reduce barriers for the provision of services, much like the EU has done. However, Wong’s article notes that ASEAN has a softer approach to regional regulations than the EU, and each ASEAN country will need to find its own path. As such, some restrictions on the transfer of data between countries may be inevitable.

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As instructed by the President, we prepared a fully jam-packed schedule for him during his six-day working visit to the United States. He had countless meetings and dialogues with business executives of top American companies, as well as forums/roundtable discussions with organizations that include the US-ASEAN Business Council, the US Chamber of Commerce, Asia Society and the World Bank Group.

The meetings covered key sectors that include digital infrastructure, business process management, information technology, aviation, security, agriculture and energy as well as climate change and disaster response. The discussion with global food corporation Cargill for instance centered on boosting agricultural productivity and how the Philippines can attain food security and self-sufficiency. The dialogue with NuScale Power – whose groundbreaking proprietary technology in designing advanced nuclear small modular reactors has made it an industry leader – was very informative as it delved on clean energy and the potential of nuclear in lowering electricity costs and mitigating climate change. Other companies that met with the president include Boeing, WasteFuel and Procter & Gamble.

A key engagement was the Philippine Economic Briefing, and joining the president were members of his economic and infrastructure teams that include Finance Secretary Ben Diokno, BSP Governor Felipe Medalla, Trade Secretary Alfredo Pascual, NEDA chief Arsenio Balisacan, Budget Secretary Amenah Pangandaman, Transportation Secretary Jimmy Bautista, Tourism Secretary Christina Frasco, Public Works and Highways Secretary Manuel Bonoan and Information and Communications Technology Secretary Ivan John Uy.

Among the big names that composed the business delegation that joined the president in New York are Aboitiz Group CEO Sabin Aboitiz who is also lead convenor of the Private Sector Advisory Council, ICTSI chairman Ricky Razon, the SM Group’s Hans Sy, San Miguel Corp. chairman and CEO Ramon Ang, JG Summit president Lance Gokongwei, Michael Tan of the LT Group, Armscor CEO Martin Tuason, George Barcelon of PCCI and Magsaysay Group president and CEO Doris Ho.

President Marcos invited “strategic investors” to participate in the country’s economic resurgence, saying that “key structural reforms have been set into place to allow for wider participation in our industries. With the Corporate Recovery and Tax Incentives for Enterprises Act or what we refer to as CREATE and the economic liberalization measures, we have expanded the space for foreign investments in previously protected sectors, especially those that employ advanced technologies and research and development activities.”

He spoke about the strong and enduring ties between the United States and the Philippines in all aspects of the relationship that include the areas of trade, commerce and development, with the US being our third largest trading partner and fourth major source of foreign direct investments. He also assured businessmen about the reliability of the Philippines as a host for international partnerships, highlighting the country’s favorable business climate, sound macroeconomic fundamentals and the clear roadmap towards economic recovery and sustained growth, stressing that an even wider space has been created for mutually beneficial investments.

Meeting him in person, the US business executives, institutional investors and fund managers who took part in the economic briefing welcomed the openness of the President in listening to their concerns. The way PBBM articulated his economic recovery program resonated extremely well with the businessmen, giving them confidence and the assurance they needed to hear, during the economic briefing.

As Sabin Aboitiz put it, the President has the ability to “bring together the best minds in business, use them to find real solutions to real problems and then immediately implement them like he was flipping a switch.”

Several American investors also privately told me that they were encouraged by what they heard from the President and his team, all looking at expanding their operations in the country while some are mulling the possibility of diversifying their manufacturing activities or moving their operations out of China due to the supply chain disruptions brought about by the pandemic, increasing labor wages and costs, the trade war between the US and China, among other issues.

Those that could benefit from the situation are ASEAN member-nations that include the Philippines. In fact, a lot of global companies have been resorting to the “China Plus One” strategy, which is simply the diversification of their manufacturing businesses to other Asian countries, with the ASEAN region a strong contender with its combined GDP of $3.3 trillion in 2021 amounting to 3.4 percent of world GDP, according to IHS Markit.

“Over the long-term, the ASEAN region is expected to overcome the protracted negative economic shocks caused by the COVID-19 pandemic and continue to be one of the fastest growing regions of the world economy,” IHS Markit said in its report last August.

While we work closely with our ASEAN brothers here in Washington to enhance relations between the regional bloc and the United States, as diplomats, we also have our national interest and specific agenda that we must pursue for our respective nations – making us competitors in one sense. My description is that “we are gladiators by day, but collaborators at night.”

PBBM has always been interested in business and had always wanted to be a businessman. Judging from the outcome of his working visit to New York, he is turning out to be our number one marketing executive – promoting the country as the “smart investment choice” – and that the best time to do business with the Philippines is now.

While we generated $3.9 billion in investment pledges, that is really just the beginning of what I see to be a “new dawn” in our economic relationship with the United States – and that moment has come.

*      *      *

Email: [email protected]

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Cineplex continues to look for ways to monetize its 2020 aborted merger with UK-based Cineworld. Recent events suggest its pursuit of justice will be a long and winding road.

A judge in the U.S. Bankruptcy Court in Houston on Wednesday denied Cineplex Inc.’s request to allow its case against Cineworld Group plc (LON:CINE) to proceed in October in the Ontario Court of Appeal despite the current U.S. proceedings.

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Q2 2022 hedge fund letters, conferences and more

Fund Manager Profile: Kris Sidial Of Tail Risk Fund Ambrus Group

A decade ago, no one talked about tail risk hedge funds, which were a minuscule niche of the market. However, today many large investors, including pension funds and other institutions, have mandates that require the inclusion of tail risk protection. In a recent interview with ValueWalk, Kris Sidial of tail risk fund Ambrus Group, a Read More

 

Judge Marvin Isgur said allowing the litigation to continue at the early stage of London-based Cineplex’s bankruptcy case would be “premature.” “The purpose of the automatic stay is to give the debtor a breathing spell,” Isgur said.

Cineworld Withdraws Deal To Acquire Cineplex

Cineworld, which filed for chapter 11 earlier this month, withdrew from a deal to acquire Cineplex in the wake of the Covid-19 pandemic. “The purpose of the automatic stay is to give the debtor a breathing spell,” Judge Isgur said.

He added that Cineplex remains free to seek future relief.

As a result of the decision in the U.S., Cineplex’s efforts to collect a CAD$1.24 billion Ontario Superior Court of Justice judgment in December 2021 are on hold until 2023 after Cineworld’s U.S. bankruptcy proceedings have concluded. 

Cineplex’s share price jumped to $9.37 on the news but quickly retreated. It had since fallen back to where it was trading before the speculation surfaced. CGX stock lost 34% in 2022 to date and is off almost 75% since March 2020, when it appeared Cineworld would try to rescind its CAD$2.8 billion offer to buy Cineplex.

In June 2020, the company officials said it wanted out of the deal.

Also, on Wednesday,  The Wall Street Journal reported that Cineplex is considering merging with Regal Entertainment Group, Cineworld’s U.S. subsidiary. 

Details regarding potential Cineplex/Regal plans are limited, with the Journal saying Cineplex would offer Cineworld’s lenders cash-and-stock backed by the combined business’s assets.

Some investors aren’t convinced. Cineplex wants a Regal Deal. Deadline.com reported on Sep. 28 that the company is merely trying to secure its claim against Cineworld. 

“I read the story as I was eating my cheerios that Cineplex has engaged with lenders of Regal Cinemas about a potential merger. That was news to me. We obviously have had merger talks with Cineplex on and off,” said Cineworld attorney Joshua Sussberg of Kirkland & Ellis. “In fact, there were conversations over the course of the summer before we had an acute liquidity problem.”

In 2019, Cineworld’s U.S. business generated $3.21 billion in revenue, including $1.86 billion from box office receipts. Over the next two years, its combined revenue was $1.80 billion, less than its 2019 box office. Cineplex’s 2019 revenue was CAD$1.67 billion. Its two-year combined revenue for 2020 and 2021 was CAD$1.07 billion. 

Assuming a merger between Regal and Cineplex went ahead, it would have combined revenue of $4.43 billion, based on 2019 results. AMC Entertainment Holdings (AMC) trades at 1x sales, which values the combined entity’s equity at $4.43 billion. 

AMC paid $3.6 billion for Regal’s equity in 2018, plus the assumption of $2.3 billion in net debt. 

Before Cineplex can make an official offer to the bankruptcy courts to buy Regal, Cineworld has the right to make its restructuring offer to its creditors.

Article by Will Ashworth, Fintel

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Barclays has been fined for a second time this week after American regulators imposed a $200 million penalty on the bank for offering and selling billions of dollars worth of securities in unregistered transactions.

The US Securities and Exchange Commission charged the British bank over its “staggering” failure to implement any internal control to track such transactions in real time.

This led to the offering and sale of an “unprecedented” amount of securities in unregistered transactions worth about $17.7 billion, the watchdog said.

A $361 million settlement announced last night also included repayment of gains and interest of more than $161 million, although the watchdog deemed this to have been satisfied by an offer to repurchase the securities which Barclays started earlier this year.

Barclays

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With proof of concept for its NAV platform from two gene therapy products partners have brought to the market, two products slated for regulatory submission in the next two years, and a new manufacturing facility, Regenxbio Inc. is poised to take the next step to becoming a fully realized commercial biotech, CEO Kenneth Mills told Scrip in a recent interview.

The progress is all part of the Rockville, MD-based biotech’s “5×25” strategy to bring five gene therapy candidates either to market or into pivotal-stage clinical trials by 2025, as is the company’s Manufacturing Innovation Center, which opened this summer with capability to produce clinical trial or commercial product up to 2,000 liters. Regenxbio is at a maturation point and following a similar path as biologics pioneers like Amgen and Genentech, Mills said.

“The thing about the opening of this facility that’s incredibly unique is the control over our own destiny at this point,” the CEO said. “We now have an engine that’s kind of end-to-end. We started as a company in the late 2000s that was intellectual property-based, really basic research, all preclinical, and we became a company that did a lot of partnerships. We relied on other people to use our technology and make it and distribute it, most notably Novartis AG through its acquisition of AveXis, Inc. and the approval of Zolgensma.” (Also see “Novartis Goes Big On Gene Therapy With $8.7bn AveXis Acquisition” – Scrip, 9 Apr, 2018.)

“I tend to parallel us with how I imagine Amgen or Genentech or other biologics or antibodies companies were in the sort of early stages: a lot of technology exploration, a lot of trial and error, a lot of new learning. Then, they launched some of their first products and started to lay down the foundation of what a commercial market was going to be for biologics.” – Regenxbio CEO Kenneth Mills

Regenxbio’s NAV platform, which offers more than 100 variations on adeno-associated virus (AAV) vector technology, provided AAV8 vector technology for Novartis’s spinal muscular atrophy gene therapy product Zolgensma (onasemnogene abeparvovec), which in 2019 became the second gene therapy product ever approved by the US Food and Drug Administration, behind Roche Holding AG/Spark Therapeutics, Inc.’s Luxturna (voretigene neparvovec). (Also see “Novartis CEO Calms Concerns Over Zolgensma launch ” – Scrip, 18 Jul, 2019.) Zolgensma has had the most commercial success for a gene therapy, topping the blockbuster threshold for the first time in 2021 with sales of $1.35bn and delivering $33m in royalty revenue to Regenxbio.

Regenxbio also has a development and commercialization partnership with AbbVie Inc. for wet age-related macular degeneration (AMD) candidate RGX-314, which brought $370m in upfront cash to Regenxbio’s balance sheet and is on track for FDA filing in 2024. Regenxbio is also planning to submit a biologic license application for an internally developed candidate, RGX-121 in mucopolysaccharidoses type II (MPS II, also known as Hunter syndrome). (Also see “In Difficult Times For AAV Gene Therapies, AbbVie Boosts Regenxbio’s Ambitions” – Scrip, 2 Mar, 2022.) Regenxbio plans to use the accelerated approval process for the latter program in an effort to get the potentially life-saving treatment to pediatric patients as soon as possible, Mills explained.

Beyond those, Regenxbio has several clinical and preclinical candidates in development. (Also see “AbbVie Extends Reach Of Regenxbio’s Wet AMD Program” – Scrip, 13 Sep, 2021.) The firm went public in September 2015, netting $148m from an initial public offering, and reported $682m cash on hand at the end of the second quarter. (Also see “An IPO So Nice REGENXBIO Will Try It Twice” – Scrip, 19 Oct, 2015.)

AbbVie Partnership’s Key Role In Next Steps

Despite the success of Zolgensma, the role of Regenxbio’s AAV technology in it and the revenue it yields, Regenxbio wants to be a company “that makes medicines and gets them to people,” Mills added. That’s where the AbbVie partnership is providing a boost, he said. Regenxbio has added the manufacturing capability to its R&D expertise in gene therapies and now the tie-up with AbbVie will enable it to work with an established biopharma in getting a drug approved and launched commercially, the exec said.

“I tend to parallel us with how I imagine Amgen, Inc. or Genentech, Inc. or other biologics or antibodies companies were in the sort of early stages: a lot of technology exploration, a lot of trial and error, a lot of new learning,” Mills said. “Then, they launched some of their first products and started to lay down the foundation of what a commercial market was going to be for biologics.”

“They were small companies to begin with, they had some partnerships, like we have a partnership with AbbVie, so we’re in that phase right now,” he continued. “I think we’re about to become part of the leadership of the commercialization of AAV therapeutics.”

AbbVie and Regenxbio will split costs and profits for RGX-314 in wet AMD in the US, with AbbVie obtaining approval, manufacturing and selling the product outside the US, while paying royalties to Regenxbio. Before partnering with AbbVie, Regenxbio established its US R&D capabilities and then looked for the ideal partner for ex-US business, Mills said. “The first step was we did all the [RGX-314] drug development ourselves and ran the first clinical trial of 40 patients, and we manufactured at a contract manufacturer, but it was our process that we were using,” he explained. “We were leading discussions with FDA and we took our product candidate all the way to the point where we’re basically running two pivotal clinical trials to support an approval.”

The candidate is in the pivotal Phase III ATMOSPHERE and ASCENT studies using subretinal delivery in wet AMD patients. The companies are also running the Phase II AAVIATE study of a suprachoroidal delivery version of the therapy for wet AMD and developing RGX-314 for diabetic retinopathy with the less-invasive suprachoroidal formulation as well. Subretinal delivery requires surgery while the suprachoroidal formulation of ‘314 can be administered during a doctor’s office visit, which the partners hope will broaden usage of the product.

Regenxbio will run into competition in the wet AMD space. There are three other viral gene therapy candidates in development for wet AMD, according to Biomedtracker. Adverum Biotechnologies, Inc. has ixo-vec (ixoberogene soroparvovec) in Phase II. (Also see “Adverum Makes Job Cuts To Advance Wet AMD Gene Therapy” – Scrip, 8 Jul, 2022.) 4D Molecular Therapeutics Inc. has 4D-150 in Phase I/II, and Johnson & Johnson has HMR59, licensed from Hemera Biosciences Inc. in 2020, in Phase I. (Also see “Deal Watch: Merck & Co. Looks To Advance NASH Ambitions With Aligos” – Scrip, 8 Dec, 2020.) Biomedtracker lists no gene therapy candidates in development for diabetic retinopathy besides Regenxbio’s RGX-314.

In external development, Regenxbio is partnered with Rocket Pharmaceuticals Inc. in Danon disease, with Eli Lilly and Company subsidiary Prevail Therapeutics Inc. in Gaucher disease and with Ultragenyx Pharmaceutical Inc. in glycogen storage disease type Ia. (Also see “Deal Watch: Boehringer Teams Up In CNS Disorders Again, This Time With Domain” – Scrip, 6 Dec, 2018.)

Allergan Takes AbbVie In A New Direction

AbbVie’s $63bn acquisition of Allergan plc in 2019 made it an ideal partner for Regenxbio, Mills said, as that deal led the Chicago pharma into the ophthalmology space. (Also see “AbbVie Pounces On Chance To Buy Revenues In $63bn Mega-Deal For Allergan” – Scrip, 25 Jun, 2019.) With the approval of Vuity (pilocarpine 1.25%) for presbyopia last November, AbbVie began building on Allergan’s legacy ophthalmology business, but had limited expertise, he explained. (Also see “With Vuity Approval, AbbVie Continues Stepping Into Eye Care” – Scrip, 3 Nov, 2021.)

“This sort of bootstrapping of the first large commercial launch helps insulate your risk a little bit, but you also learn a lot as a company. Then, follow-on products are things you can do entirely yourself, if you choose to.” – Regenxbio CEO Kenneth Mills

“AbbVie was not really in ophthalmology, but Allergan was,” the exec noted. “It was good timing because they had decided that they were going to continue to pursue ophthalmology as a sort of foundational pillar of their growth strategy. And they really liked the idea of getting into wet AMD with something very innovative.”

“A lot of other companies we looked at already had existing products and treatments and we wondered whether or not they would be as aggressive in pursuing development [of RGX-314] as we had been, and wanted to continue to be,” Mills continued. “So, we were looking for a global partner, but also looking for a partner that could allow us to continue to grow the program all the way through to commercialization.”

Mills compared the Regenxbio/AbbVie partnership to Amgen’s partnerships when it brought its first erythropoietin-stimulating products, such as Neupogen (filgrastim), to market. “Then, the next generation of products they did on their own,” he noted. “This sort of bootstrapping of the first large commercial launch helps insulate your risk a little bit, but you also learn a lot as a company. Then, follow-on products are things you can do entirely yourself, if you choose to.”

Selecting Therapeutic Areas Of Focus

Aside from ophthalmology, Regenxbio has chosen its therapeutic areas by going where the science leads, Mills said. The focus on wet AMD stemmed from research grants the company had obtained to do early research on its AAV technology, he explained, which showed that a single-administration gene therapy product might offer better outcomes than VEGF inhibitors such as Lucentis (ranibizumab) and Eylea (aflibercept). “That became something that we were going to focus on and we had the science to back it up and the clinical understanding of how to do it,” Mills said.

Regenxbio’s early research had also focused on how to use AAV vectors to reach as much of the central nervous system as possible, which yielded a focus on rare neuroscience disorders such as MPS II and also MPS I (Hurler syndrome).

“Just as important, we decided on things that we were not going to do and I think that’s often what trips people up,” Mills said. “For us, we weren’t going to do really small indications, because there just wasn’t commercial viability. We weren’t going to do oncology because it just didn’t seem well suited for AAV. We weren’t going to do infectious diseases. And then, we weren’t going to go in areas where we thought we couldn’t legitimately compete commercially.”

One such area is hemophilia, where the AAV8 vector showed viability but Regenxbio determined that other companies, such as BioMarin Pharmaceutical Inc., which is readying a resubmission of Roctavian (valoctocogene roxaparvovec) at the FDA for hemophilia A, had too much of a head start. (Also see “Seven Potential Blockbuster Approvals To Look Out For In 2023” – Scrip, 19 Sep, 2022.)

“Hemophilia is a really complicated market and I looked at it carefully for many years,” Mills said. “What we decided as a company is we’re not going to do that ourselves, we’re going to rely on partnerships to navigate the complexity of that.” The goal in choosing what indications to pursue was avoiding “pitfalls that might set us up for failure through the complexities of commercialization, or areas where the science was just not sort of telling us to go,” he added.

Beyond RGX-314 and RGX-121, Regenxbio also has RGX-202, which uses the AAV8 vector to deliver a transgene for a novel microdystrophin ready to begin a Phase I/II trial in Duchenne muscular dystrophy in the first half of 2023. RGX-111 is in Phase I/II, as well, as an AAV9 therapeutic for MPS I.

For RGX-121, which uses an AAV9 vector to deliver the iduronate-2 sulfatase (I2S) enzyme, Regenxbio is conducting the Phase I/II CAMPSIITE trial with a goal to seek accelerated approval based on surrogate marker data measuring glycosaminogylicans in patients’ cerebrospinal fluid. “The underlying biomarker itself is actually the natural substrate of the enzyme that’s missing in these kids,” Mills said. “It’s kind of scientifically obvious that when that enzyme is not functioning, that substrate builds up, it doesn’t get broken down.”

MPS II, while fatal, is diagnosed around the patient’s first or second year, but they tend to live to between ages 10 and 14, Mills noted. The seriousness of the disease means it’s not feasible to run a 10-year development program to find out if a drug candidate works, he added.

“It was a stakeholder discussion with the FDA, with physicians who are experts in the disease, and with the families to say we can’t have a 10-year development program because these kids are going to keep dying over the next 10 years,” Mills said. “It’s clear that this medicine is changing the biology, we said we’d like to be able to accelerate this and then look for that confirmatory evidence after it’s approved. And be open to the fact that if it’s not working, we’ll need something else or we’ll have to pull this off the market.”

“I don’t think that’s the case,” he continued. “I just think that we need the time to develop all the evidence to support it.”

Mills noted the first gene therapies, Zolgensma and Luxturna, received full approvals but both had clear clinical outcomes that did not take long to measure.

Mills Ponders Pricing Of Gene Therapies

The Regenxbio CEO conceded that pricing will be an ongoing quandary for gene therapies, but told Scrip that at least with the launches of Luxturna and Zolgensma, some precedent is in place. But more experience is needed to understand how best to price a gene therapy product, the exec said.

A gene therapy entering a market with an effective standard of care in place will provide more perspective on the limits of gene therapy pricing and reimbursement, he said. “That’s going to be hemophilia. That’s going to tell us a lot about how to price a product, how to offset the years and decades of prophylactic clotting factor that patients get and huge entrenched clinical and commercial infrastructure.”

The final piece of the pricing puzzle will be approval of gene therapy in a large indication, which Mills expects will be wet AMD. He estimates there will be wet AMD among other gene therapy products on the market around 2025, and “all of that will tell you how products can be delivered, how they can be priced across a spectrum of unmet need, size of indications and [pricing is] going to be case-by-case.”

But he expects the next rounds of gene therapy will push pricing lower. They will be “priced in accordance with what the standard-of-care pricing is,” Mills said, “which tends to be tens of thousands of dollars a year, not hundreds of thousands or millions a year.”

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South Korean fulfillment startup Colosseum Corp. will open a logistics center in Los Angeles, California, next month, debuting its fulfilment solution “COLO” in an overseas market.

“We will cooperate with Korean listed cosmetics packaging company CTK in the United States in the same way as we do in Korea,” Colosseum’s CEO and founder Park Jinsu told Maeil Business Newspaper in a recent interview.

Colosseum established in June 2019 is a fulfillment startup that redesigns a workflow for warehouses and distribution centers to improve efficiency by using big data and artificial intelligence technology. A fulfillment center, a combination of storage facilities and a logistics center, offers all logistics processes needed to get a product from the seller to the customer. Amazon was the first to introduce the concept.

Colosseum does not possess its own warehouses. Instead, it shares some 30 warehouses and facilities in partnership. The warehouse provides space and manpower, while Colosseum provides software and cargo volume to create synergy. This means initial investment and fixed costs are not high for Colosseum’s business model.

Unlike existing warehouses that rely on operators’ personal experiences or work routines, Colosseum collects data, such as the movement of operators, through its own AI and deep learning system and applies the data to warehousing work to increase efficiency, Park explained.

Colosseum targets companies that do not have their own distribution centers. It has various warehouses to cover a variety of small-volume products that require specific storage conditions.

Colosseum has turned its attention to the global market as online sales by Korean companies or individuals to overseas markets are doubling every year.

Instead of establishing a local entity in the U.S., it will make an inroad into the market through partnership with local logistics companies, Park said. “All we have to do is make a global version of our solution and arrange an overseas channel. Then, you can sell Korean goods or foods to Japan, China and Southeast Asia.”

The concept has been selling well as the company handles 100,000 merchandises on average a month.

“Our business model enables faster profit than average. We anticipate our first monthly surplus in the first half of next year,” said Park, adding that the company will continue to expand in overseas markets beyond the U.S.

“We are confident that we will create a fulfillment logistics center that global sellers can use more comfortably.”

By Pulse

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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As monetary tightening by central banks worldwide continues to spook markets, analysts advise caution, at least in the short term.

“Empirical analysis of sharp corrections in the past, including those which were caused due to recession in advanced economies, suggest that defensives outperform during such periods,” Antique Stock Broking Ltd. said in its investor note, highlighting that global equities have corrected sharply over the week.

Even as India continues to outperform globally given it is relatively better placed, the market could still remain volatile with a possible sharp correction in the near term, according to the brokerage.

The risk of a potential recession looms over global economies, evident by the sharper-than-anticipated rate hike cycle, energy crisis in Europe and weakness in China.

The brokerage expects terminal interest rates in India to be about 6.5%, higher than its current estimate of 6%, in order to avoid a sharp rupee depreciation. This is due to a sharp rate hike cycle in the U.S. and relatively lower foreign exchange import cover of about nine months.

Citing empirical analysis of past 17 corrections, Antique said defensive stocks such as FMCG, IT services and pharmaceuticals outperformed. Cyclicals such as metals, capital goods, banks and infrastructure stocks underperformed.

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• 

Business Standard

Easing pricing pressures, complex generics uptick in the US, steady India/emerging-market growth potential booster shots

Topics
Nifty Pharma | Pharma sector | US markets

Ram Prasad Sahu  | 
Mumbai 
Last Updated at September 26, 2022 06:10 IST

Photo: Shutterstock

The Nifty Pharma Index was the second-worst performer among Nifty sectoral indices over the past year, shedding over 13 per cent in trade. Over a two-year period, its underperformance has grown starker. It is the only index to generate a mid single-digit return (6 per cent), with its closest competitor enriching investors by over 35 per cent.

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Cummins-Meritor, a business unit within Cummins’ components segment, will expand its manufacturing facility outside of Fletcher, North Carolina. The $17 million project is expected to create 40 jobs in Henderson County.

THe company will increase the electric axle production by upgrading the plant with connectivity and automation technologies. The facility is Cummins-Meritor’s largest North American manufacturing site, producing 70% of the nation’s class-8 axles and components for major customers.

“Our employees in Fletcher are critical to making Cummins-Meritor the industry leader in commercial vehicle powertrain system solutions,” said Ken Hogan, Vice President and General Manager for Cummins-Meritor. “This investment expands our footprint and allows us to attract the key talent we need to continue being the top choice of our global customers.”

A performance-based grant of $50,000 from the One North Carolina Fund will help with the expansion. The One NC Fund provides financial assistance to local governments to help attract economic investment and to create jobs. Companies receive no money upfront and must meet job creation and capital investment targets to qualify for payment. All One NC grants require matching participation from local governments and any award is contingent upon that condition being met.

“Cummins-Meritor has chosen to grow their company right here in Henderson County because they know what a great place this is to do business,” noted Governor Roy Cooper. “The company’s reinvestment underscores the advantages of the world class workforce, strong supply network and central location that North Carolina brings for global manufacturers.”

Meritor was recently acquired by Cummins, a global power and technology leader that designs, manufactures, distributes and services a broad portfolio of power solutions. Cummins and Meritor have four other North Carolina locations, including Forest City, Laurinburg, Rocky Mount and the recently expanded Morganton site.

“Cummins-Meritor’s growth strategy includes more innovation and automation for its electric vehicle products,” added N.C. Commerce Secretary Machelle Baker Sanders. “North Carolina’s strategic economic development plan will complement the company’s smart factory expansion by helping develop the diverse and skilled talent that it needs for its next phase of growth.”

In addition to the N.C. Department of Commerce and the Economic Development Partnership of North Carolina (EDPNC), other key partners in the project include the North Carolina General Assembly, North Carolina Community College System, Blue Ridge Community College, Henderson County, and Henderson County Partnership for Economic Development.

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Seven state attorneys general and a court-appointed bankruptcy federal watchdog are opposing up to $94 million in pre-bankruptcy bonuses paid to top executives and other insiders at opioid drug firm Endo International in Chester County, court documents show.

The bonuses to the highest executives were doled out in “secret” and drain financial resources of the money-losing Endo available for victims of the Malvern company’s addictive pills, according to state attorneys general who filed their objections as a committee on Wednesday in New York.

Pennsylvania Attorney General Josh Shapiro is one of the seven whose court filing called the top executive pre-bankruptcy bonuses “excessive.”

Endo, facing mounds of litigation over its alleged role in the national opioid crisis, filed for bankruptcy protection on Aug. 16. The Inquirer first reported on the bonuses days later.

U.S. Trustee William Harrington, the watchdog, said in a separate court filing earlier this month that Endo paid $94 million in bonuses to top executives and other insiders in the months prior to the bankruptcy filing, while Endo’s restructuring plan leaves only $27.4 million initially for individual opioid victims who are not state entities.

Endo has “provided virtually no information, much less sufficient information” to evaluate the bonus payments, Harrington told the court.

Endo paid the last batch of pre-bankruptcy bonuses to top executives less than a week before it filed. On Aug. 11, Endo agreed to pay chief executive Blaise Coleman $11.85 million; Matthew J. Maletta, chief legal officer, $3.5 million; Patrick Barry, president of global commercial operations, $3.3 million; and Mark Bradley, chief financial officer, $3.5 million.

Endo is expected to respond in bankruptcy court on Monday. The drug firm had no comment Friday.

For an Aug. 24 Inquirer story about the executive bonuses, an Endo spokesperson said that “the recent incentive and retention payments are critical to the continuity of Endo’s business during the Chapter 11 proceedings and were approved by Endo’s independent board members.”

The spokesperson said it was important to note that a portion of the bonuses “must be repaid if certain pre-established financial and operational targets are not met in 2022 and 2023.” The spokesperson also said in the statement last month that the “payments are subject to the recipient’s continued employment with Endo over multiple years.”

Temple University law professor Jonathan Lipson said Friday that the court objections to the bonuses “paint a picture of Endo executives pillaging the company before bankruptcy, leaving little left for tort victims. There may be more to the story, and certainly employees should be paid fairly. But the bonuses raise important questions about who management was acting for. People are concerned that the [bonus] money was misspent and should go to the creditors instead.”

Endo, which is based in Ireland for tax purposes but runs its U.S. business out of Malvern, was one of the nation’s largest opioid manufacturers and marketers with its flagship Opana pain pill and less-expensive generic opioid pills.

Endo pulled the highly potent Opana from the market in 2017 after the Food and Drug Administration asked it to because of potential for abuse.

Though Endo says in court documents that Opana accounted for less than 1% of the opioid market, Tennessee reeled from Endo’s Opana tablets with overdoses and addictions. According to a lawsuit filed against the company in 2019 by the state’s then-Attorney General Herbert H. Slatery III, almost one million more of Endo’s Opana ER tablets were sold in the Knoxville area between 2007 and 2014 than in New York, Los Angeles, and Chicago — combined.

In August, Endo reported that second-quarter revenues fell 20%, mostly because of new generic competition on its branded Vasostrict drug for a diabetes condition. A bankruptcy court filing says Endo spends more than $200 million a year on litigation costs for opioid and other lawsuits, twice what it spends on research and development. The company faces 3,100 opioid suits, many brought by government entities.

U.S. Bankruptcy Judge James Garrity of the Southern District of New York has scheduled a hearing Wednesday on wage and compensation for employees while Endo is restructuring its ailing business in bankruptcy court.

A group of state attorneys general was negotiating with Endo as it prepared for its bankruptcy filing. The “Multi-State Endo Executive Committee” comprises the attorneys general from Maine, Massachusetts, New Hampshire, Vermont, and Virginia, in addition to those from Tennessee and Pennsylvania. The committee, Endo, and its secured lenders agreed to settle the state and local government suits for $450 million over a decade.

The top executive “bonuses were paid in secret at a time when Endo was in active negotiations with the [committee] regarding states’ opioid litigation claims against the company,” Wednesday’s court filing by the state attorneys general said.

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