In many ways, 2018 resembled the previous year in fast motion. Political turmoil accelerated on both sides of the Atlantic, with Asia swept into the fold, while the “estrangement" previously seen between President Donald Trump and the scientific community morphed into global revulsion against a rogue research rule-breaker. Not all was well in biopharma-land, either. The groundswell of anger against rising U.S. drug prices looked likely to spill into multiple pieces of legislation in a rebalanced Congress. And the ongoing tragedy of opioid abuse and addiction prompted the FDA to put the brakes on certain drugs while the CDC warned of the epidemic’s impact on U.S. life expectancy. Despite these challenges, clinical breakthroughs continued to dazzle, including first approvals in new mechanisms and indications, while the FDA logged record nods in what might be viewed as the new normal. Venture funding continued to flow to drug discoverers, and the public markets were friendly until the fourth quarter, when they took a giant U-turn.

Evercore ISI analyst Josh Schimmer and team recently ruminated in their weekend musings that “the sector continues to face a number of challenges around competition, pricing and productivity,” driving an industry theme of “‘uncertainty,’ now confounded with depressed valuations that are colliding with financing needs.” We couldn’t agree more. The stage is set for dramatic change in 2019.

1. STUNNING DRUG APPROVAL FIRSTS WERE BLUNTED BY BIG FAILURES

Although 2018 was a year of many firsts, few would dispute the game-changing significance of Onpattro (patisiran), developed by Alnylam Pharmaceuticals Inc. to treat hereditary transthyretin-mediated amyloidosis (hATTR amyloidosis), which had the distinction of becoming the first RNA interference (RNAi) drug approved by the FDA, even if the Cambridge, Mass.-based company didn’t get the full label it was expecting.

Other players in the field also welcomed the first approval in the hATTR indication, including Ionis Pharmaceuticals Inc. and affiliate Akcea Therapeutics Inc., which followed Onpattro’s nod several months later with FDA clearance – albeit delayed and with a black box warning – of antisense oligonucleotide Tegsedi (inotersen) for polyneuropathy of hATTR amyloidosis in adults.

Approval of GW Pharma plc's liquid Epidiolex – the first pharmaceutical formulation of purified, plant-based cannabidiol (CBD) to reach the market – in Dravet and Lennox-Gastaut syndromes also opened a new therapeutic and regulatory door in the U.S. Although the product required rescheduling by the Drug Enforcement Agency before it could go to market, GW's win was expected to end what some called the "hysteria" and "cannabinoid immigration" of families who traveled across state or national borders to seek compounded CBD or hemp oils that might help children with the rare, intractable forms of epilepsy.

The Epidiolex approval also provided lift to innovation in the CBD market, largely coming from startups and small biopharmas that capitalize on endogenous cannabinoid compounds rather than taking the traditional combinatorial chemistry approach applied by pharmas to develop synthetic compounds, according to Money in the Pot, a report from Derwent, a unit of Clarivate Analytics, parent of BioWorld. Patent data in the Derwent report suggest that deregulation trends in the U.S., Canada, Australia and other countries provide a direct link between the regulatory and drug research environments.

Though perhaps the most prominent firsts, Onpattro and Epidiolex were by no means the only new arrivals to emerge from biopharma pipelines. In May, Amgen Inc. scored a first FDA approval in the calcitonin gene-related peptide, or CGRP, receptor class with Aimovig (erenumab) to prevent migraine, followed in September by Teva Pharmaceutical Industries Ltd. with Ajovy (fremanezumab-vfrm) and less than a month after that with Eli Lilly and Co.'s migraine prevention therapy, Emgality (galcanezumab-gnlm).

Mylan NV succeeded where others had failed by garnering FDA approval for a Neulasta biosimilar. The licensing of Fulphila (pegfilgrastim-jmbd), co-developed with Biocon Ltd., of Bangalore, India, also scored a first for the agency, which had been playing catch-up with the EMA’s head start on the biosimilar path. In the meantime, biosimilars makers took on Abbvie Inc.’s golden goose in the EU. Under nonexclusive licensing agreements with the North Chicago pharma, several biosimilars to Humira (adalimumab) had lift-off in October across the 28 member states of the EU as well as Iceland, Lichtenstein and Norway.

The FDA’s limited population pathway for antibacterial and antifungal drugs (LPAD), designed to spur development of antibiotics for unmet medical needs, also bore fruit with accelerated approval of Insmed Inc.'s Arikayce (amikacin liposome inhalation suspension) as the first FDA-approved therapy to treat refractory nontuberculous mycobacterial lung disease caused by Mycobacterium avium complex in adults and the first granted under the LPAD pathway.

In a related first, Becton, Dickinson and Co. (BD) gained FDA clearance for its BD Phoenix CPO detect test, used to identify infections caused by carbapenemase-producing organisms (CPOs) – antimicrobial resistant infections that result in very high mortality rates. The test will be included on BD Phoenix gram-negative panels that offer antibiotic susceptibility testing to identify the best treatment for a specific infection.

Swedish Orphan Biovitrum AB and Novimmune SA won an on-time nod for emapalumab, branded Gamifant, as the first FDA-approved therapy to treat children and adults with the ultra-rare inflammatory condition primary hemophagocytic lymphohistiocytosis, or HLH. And days before year-end, Stemline Therapeutics Inc. gained a green light for Elzonris (tagraxofusp-erzs) as the first drug approved to treat the rare, aggressive blood and bone marrow disease blastic plasmacytoid dendritic cell neoplasm, or BPDCN.

Also in December, China was the setting of two impressive firsts. Shanghai Junshi Biosciences Co. Ltd. won the country’s PD-1 race, with JS-001 (toripalimab) becoming the first China-developed anti-PD-1 monoclonal antibody product approved by the NMPA. Word of the approval came a week ahead of the company's debut on the Hong Kong Stock Exchange (HKEX).

One day later, roxadustat (previously FG-4592), developed by Fibrogen Inc. and partnered in China with Astrazeneca plc, became the first drug advanced by a global biopharma to receive its initial nod from the NMPA before applications were submitted to the FDA and EMA. The oral hypoxia-inducible factor prolyl hydroxylase inhibitor was approved to treat anemia caused by chronic kidney disease in dialysis-dependent patients.

For all the hoopla over breakthrough clinical achievements, the industry continued to come up short against Alzheimer’s disease. Boehringer Ingelheim GmbH gave up on BI-409306, its phosphodiesterase 9 inhibitor, though not on its mechanism of action, continuing to pursue work on the same compound in schizophrenia. Findings reported at the 2018 Clinical Trials in Alzheimer's Disease meeting in Barcelona showed that three failed beta-secretase 1 (BACE-1) inhibitors tested in major trials – verubecestat from Merck & Co. Inc., atabecestat from Janssen Biotech Inc. and LY-3202626 from Eli Lilly and Co. – appeared potentially to have made things worse for the patients who took them. Lilly and Astrazeneca plc also halted development of phase III BACE inhibitor lanabecestat.

Sosei Group Corp. and partner Allergan plc were forced to suspend development of HTL-0018318 after cynomolgus monkeys in a toxicology study developed neoplastic tumors. Azeliragon (formerly TTP-488), a small-molecule antagonist of receptor for advanced glycation end products, or RAGE, from Vtv Therapeutics Inc., crashed and burned in part A of the phase III STEADFAST study. And findings from BAN-2401, discovered by Bioarctic AB and Eisai Co. Ltd. and advanced by Eisai and collaborator Biogen Inc., continued to tantalize but still left the AD amyloid hypothesis dangling.

2. BIOPHARMA IPOS MADE STRONG SHOWING DESPITE TURBULENT MARKETS

The turbulence experienced in the general markets did not serve to dampen the enthusiasm for initial public offerings, with a steady flow of biopharma company IPOs successfully completed throughout the year. As a result, the curtain will close on 2018 with 69 biopharmas having graduated to the public ranks on U.S. exchanges, including nine firms that offered American depositary shares. The total will be enough to take second position behind the record 77 U.S. IPO offerings that were completed in 2014. As far as the total of global IPOs are concerned, the 79 completed this year rank it in third spot behind the 2014 total of 84 and 83 that were completed in 2000.

The graduating U.S. group did top the record books in terms of the amount of cash raised with a total of $7.16 billion. Factor in the $3.13 billion collectively generated by 10 foreign IPOs and this combined value surpasses by a wide margin the pivotal year of 2000, when $7 billion was raised from 83 global offerings.

Several companies pushed the envelope in terms of the amount of cash they generated in their offerings. In December, Moderna Inc. priced its offering at the midpoint of its proposed range of $22 to $24 and upsized by approximately 20 percent to offer 26.3 million shares at $23 apiece and collect a massive $604 million, taking its place as the top U.S. biopharma IPO ever and fourth largest in the world.

Approximately $90.7 million more is waiting in the wings if the offering underwriters exercise their overallotment option in full.

Thanks to a new listing regime, biotech companies that have not yet generated any revenue also were permitted to seek listing on the Main Board of the Hong Kong Stock Exchange (HKEX). The exchange proposed the new policy as part of an effort to lure more firms to go public, bolstering Hong Kong's biotech development.

The move certainly had a positive effect. Among the pre-revenue biotech firms taking advantage of the new rule were Ascletis Pharma Inc. (HKG:1672), Beigene Ltd. (HKG:6160), Hua Medicine (HKG:2552) and Innovent Biologics Inc. (HKG:1801).

3. CRISPR WENT AWRY…

CRISPR/Cas9 gene editing is underpinning rapid advances in all areas of biomedical research. But there was one application – human germline editing – where scientists worldwide recognized the potential but imposed self-censorship. No wonder then, that the scientific community heaped widespread and visceral condemnation on He Jiankui following the revelation he had used CRISPR/Cas9 to create the world’s first genetically edited babies.

He knew full well his research was controversial, but said, “I believe families need this technology and I’m willing to take criticism for them,” in a video posted on YouTube, in which he announced the birth of twins known as Lulu and Nana. The genomes of the girls are claimed to have been edited to express a modified version of CCR5, a chemokine receptor that is the route by which HIV infects white blood cells.

It’s clear from the publicity campaign organized around the announcement that He expected any initial criticism to turn to congratulations and acclaim. In fact, the reaction ratcheted up from the initial fury that He had breached the international moratorium to detailed criticism of technical aspects of the research, of violation of scientific norms in making the research public without prior peer review and of lack of appropriate ethical approvals and informed consent. These were topped by accusations from peers in China that He had broken the law.

The timing of He’s announcement also was a huge affront to scientists and ethicists at the second international summit on gene editing in Hong Kong in November. He was invited to speak about his animal gene editing research. Instead he pulled the rug from under the feet of the organizing committee, which had worked since December 2015 to secure international agreement to the moratorium.

Conscious of the country’s reputation for lax regulation and oversight, He’s peers in China were amongst the most vocal critics, including 122 leading scientists who published a statement on the Weibo social media platform charging that direct human experimentation with CRISPR/Cas9 “can only be described as crazy.”

The Chinese Society for Stem Cell Research and the Genetics Society of China denounced He for breaching the law, regulations and medical ethics of China. “The research led by He is strongly against both the Chinese regulations and the consensus reached by the international community. We strongly condemn it,” their official statement said.

The Southern University of Science and Technology in Schenzhen, where He was associate professor in the department of biology, denied all knowledge. Xu Nanping, vice minister at the Ministry of Science and Technology ordered He’s work to be halted, and China’s health watchdog, the National Health Commission, called on its regional counterpart in Guangdong Province to investigate.

Whether or not He’s research ever resumes and whatever the conclusions of ongoing investigations, the genie is out of the bottle and the ramifications will go on and on.

But researchers who have been taking a step-wise and cautious approach to establishing the scientific foundations and the ethical case for human germline editing must not interpret He’s breach as having fired a starting gun. Instead, they should continue to work together to define responsible approaches to the clinical use of human genome editing, said Marcia McNutt, president of the U.S. National Academy of Science. Scientists also are calling for He’s research to be subject to peer review and published. The circumstances make that difficult, but if He made the changes as claimed, it is important to understand his methods, researchers say.

Most important for now, and for their future, is the long-term monitoring of the health of Lulu and Nana, and of any children they may have. As the first gene edited humans, their health records will offer insights into the consequences of such profound manipulations. It will be problematic, but the records must in some way be made available to highlight the potential for any harmful side effects and inform research and regulation going forward.

…BUT LEGITIMATE CRISPR USES ACHIEVED MAJOR MILESTONES

While the reckless – and still unconfirmed – use of the CRISPR-Cas9 system to engineer the genomes of twin baby girls born in China commanded most of the world’s media attention, those involved in the painstaking development of legitimate therapeutic applications of the technology attained significant milestones during 2018. Chief among them were Cambridge, Mass.-based Editas Medicine Inc. and Zug, Switzerland-based Crispr Therapeutics AG, each of which is embarking on the first clinical trials of CRISPR-Cas9-based therapies in somatic cells, following acceptance of their respective IND applications in the U.S. and, in the case of Crispr Therapeutics, other jurisdictions.

Editas and its partner, Dublin-based Allergan plc, are conducting the first ever in vivo trial of the technology. They will administer EDIT-101, by subretinal injection, to a single eye of patients with Leber congenital amaurosis type 10 (LCA 10), the most common cause of childhood blindness. The therapy comprises an adeno-associated virus 5 (AAV5) vector containing two guide RNAs and a Staphylococcus aureus Cas9 protein. The treatment is designed to eliminate the IVS26 point mutation in the CEP290 gene, which causes aberrant splicing of CEP290 pre-mRNA, giving rise to a non-functional CEP290 retinal protein.

Crispr Therapeutics and its partner, Cambridge, Mass.-based Vertex Pharmaceuticals, are already enrolling patients onto a European trial of CTX-001 in beta thalassemia and have received FDA approval to test the same therapy in sickle cell disease. CTX-001 comprises autologous CD34+ hematopoietic stem and precursor cells, in which the gene encoding BCL11A, a transcriptional repressor of fetal hemoglobin production, is disrupted. The edit enables the cells to produce fetal hemoglobin to compensate for the lack of regular hemoglobin.

The third member of the original wave of CRISPR pioneers, Intellia Therapeutics Inc., is still in preclinical development. Its most advanced programs target transthyretin amyloidosis and sickle cell disease. But the CRISPR landscape has grown more crowded and more complex since these firms emerged over the last five years. A clutch of new startups emerged in 2018 with new tools extracted from the extraordinary diversity of naturally occurring Cas endonucleases in the microbial world.

San Francisco-based Mammoth Biosciences Inc., which was co-founded by Jennifer Doudna, the co-inventor of the original CRISPR-Cas9 system, is developing highly sensitive point-of-care DNA and RNA detection kits using Cas12 and Cas13 endonucleases and a fluorescent reporter system. Cambridge-based Arbor Biotechnologies Inc., which includes another CRISPR luminary, the Broad Institute’s Feng Zhang, in its team of founders, is developing Cas13d, another programmable RNA cutter, as a diagnostic and a reagent. It is the first disclosed discovery from a platform that combines artificial intelligence, genome sequencing, gene synthesis and high-throughput screening to mine the molecular diversity of biological systems. Zhang is also one of the founders of another Cambridge-based venture, Beam Therapeutics Inc., which is developing a new generation of CRISPR-based medicines that couple deaminase enzymes with catalytically inactive Cas proteins to achieve DNA or RNA editing at a single-base level of resolution.

What’s next? The extraordinary momentum in CRISPR research will no doubt stimulate the emergence of more startups in the year ahead.

4. FDA PRODUCED RECORD CROP OF NEW MEDICINE APPROVALS

Biopharma's innovation engine was in overdrive in 2018, with 59 new molecular entities (NMEs) crossing the FDA's goal line – the most approvals ever in a single year. The industry has now broken a longstanding record, established in 1996, when 53 new medicines were approved.

However, it should not take 20 more years for the biopharma sector to top this newly established high watermark. Over the last few years, we have seen a change in business development away from the over-arching quest for mega-blockbuster drugs towards the development of more moderately selling drugs, some of which may reach close to or surpass the $1 billion peak annual sales threshold during their sales cycle before encountering generic competition when their patents expire. While there will still be  opportunities for high-volume drug sales, particularly in cancer and infectious viral disease indications, the industry's focus now embraces the development of medicines aimed at treating orphan and rare diseases, personalized and targeted medicines, and gene and cell therapies.

As a result, since 2013, the number of orphan drug approvals has steadily increased. In fact, among the eight NMEs approved in November, five had received FDA orphan drug designation, including Catalyst Pharmaceuticals Inc.’s Firdapse (amifampridine phosphate) 10-mg tablets – the first drug designated in the U.S. to treat adults with Lambert-Eaton myasthenic syndrome (LEMS), a rare autoimmune disorder that affects the connection between nerves and muscles and causes weakness and other symptoms in affected patients.

Tokyo's Astellas Pharma Inc. secured FDA approval for its oral acute myeloid leukemia (AML) therapy, Xospata (gilteritinib). The FMS-like tyrosine kinase 3, or FLT3, inhibitor has an orphan drug designation as does Pfizer Inc.’s Daurismo (glasdegib), an oral smoothened receptor and hedgehog pathway inhibitor, approved for use in combination with low-dose cytarabine to treat newly diagnosed AML in adults 75 or older or who have other co-morbidities that may preclude intensive chemotherapy.

5. BIG DEALS POPPED UP, BUT SECTOR GENERALLY PREFERRED PARTNERSHIPS OVER M&A

With five of the highest-value top 10 licensings within the last four years, and a pending M&A that could become the industry’s third largest ever, 2018 was arguably a standout year for transformative deals.

With development and commercialization agreements worth $5.76 billion between Eisai Co. Ltd. and Merck & Co. Inc., and $5.05 billion between Affimed NV and Genentech Inc., the dealmaking environment once again indicated an enormous amount of enthusiasm for harnessing cancer immunotherapies.

The Eisai/Merck deal signed in March covered tyrosine kinase inhibitor Lenvima (lenvatinib mesylate) as a monotherapy and in combination with PD-1 therapy Keytruda (pembrolizumab), while the Affimed/Genentech deal completed in August focused on natural killer cell engager-based immunotherapeutics for solid and hematologic tumors. Those deals were topped only by two other immuno-oncology licensings formed between Merck and Astrazeneca plc ($8.5 billion) in 2017 and Merck and Ablynx NV ($6.3 billion) in 2015.

“I think maybe there hasn’t been a better time to be in the industry we’re in,” said Genentech’s Thomas Zioncheck, global head of business development, at an industry conference earlier this year.

BioWorld data revealed that just over 1,300 deals with a total combined disclosed value of more than $121 billion were forged this year – greater in both size and girth than each of the last four years.

Three additional development and commercialization deals in 2018 rounded out the top 10 list of highest-value licensings, with two of them focused on RNAi technology: Arrowhead Pharmaceuticals Inc.’s $3.75 billion deal in October with Janssen Pharmaceuticals Inc. for ARO-HBV, with an option to develop RNAi therapeutics against three targets worldwide; Dicerna Pharmaceuticals Inc.’s $3.7 billion deal, also in October, with Eli Lilly and Co. for new drugs using GalXC RNAi technology against cardiometabolic disease, neurodegeneration and pain; and another immuno-oncology deal done in February worth $3.63 billion between Nektar Therapeutics and Bristol-Myers Squibb Co. for NKTR-214 in combination with Opdivo and Yervoy.

Over recent years, the biopharma sector has preferred partnerships over mergers and acquisitions, but 2018 still had a fair share of formidable M&As, and interest is rising after last year’s five-year low. At press time, 124 M&As valued at $87.9 billion were completed in 2018. The total included Glaxosmithkline plc’s $13 billion takeover of its consumer health care joint venture with Novartis AG – falling within the top 20 M&As for the industry since 1999, at number 18 – and Sanofi SA’s acquisition of Bioverativ Inc. for $11.6 billion. Other large M&As completed this year included Celgene Corp.’s acquisitions of Juno Therapeutics Inc. ($9 billion) and Impact Biomedicines Inc. ($7 billion) as well as the Novartis purchase of Avexis Inc. for $8.7 billion and Sanofi’s acquisition of Ablynx NV for $4.6 billion.

Waiting in the wings, however, is the biggest deal announced in 2018 and one that could become the third largest biopharma M&A ever in terms of value: Takeda Pharmaceutical Co. Ltd.’s $62.3 billion buyout of Shire plc, which was announced in May, is expected to complete in the first half of 2019. If it does, the single deal will place 2019 at 71 percent of the M&A value for all of 2018. Only the mergers of Allergan Inc. and Actavis plc in 2015 ($70.5 billion) and Wyeth and Pfizer Inc. in 2009 ($68 billion) had higher values.

6. BIOMARKERS MARCHED ON, WITH VITRAKVI WIN AND NEW REGULATORY GUIDANCE 

Efforts to further embrace and promote the use of evidence-based biomarkers made substantial strides in 2018, both on the regulatory and research fronts. Among the most visible wins was the FDA approval for Vitrakvi (larotrectinib, Bayer AG and Loxo Oncology Inc.) to treat a biomarker-defined population of patients with a variety of solid tumors rather than those whose tumors originated in a specific location in the body. The approval reflected "advances in the use of biomarkers to guide drug development and the more targeted delivery of medicine," said FDA Commissioner Scott Gottlieb. "We now have the ability to make sure that the right patients get the right treatment at the right time."

New regulatory advice also helped advance the field. In early December, the agency published a draft of guidance on the type of evidentiary framework industry should use for biomarker qualification. The document outlines the sort of evidence the regulator is looking for to overcome what it identified as a "lack of a clear, predictable, and specific regulatory framework for the evidence sufficient to support regulatory decision making using biomarkers,” which it said has hampered the application of biomarkers in drug development to date.

Biomarkers also became an increasingly important aspect of research unfolding around the world. On the academic front, mouse experiments and human biomarker studies further strengthened the apparent connection between dementia and the cardiovascular system. Meanwhile, research on lipids established new biomarkers for atrial fibrillation and heart failure. Separately, encouraged by advances in cancer, industry R&D teams at companies such as Denali Therapeutics Inc. and Neurotrope Inc. deepened their examination of genetics and biomarkers as they seek new paths of attack on a range of neurodegenerative disorders, including Alzheimer's disease.

The year also brought further credibility for biomarkers as a guide for the best use of already-approved therapies. Working with academic researchers, Roche subsidiary Genentech Inc. found that an elevated tumor mutational burden in the blood is predictive of efficacy for its checkpoint inhibitor Tecentriq (atezolizumab, Roche Holding AG). Researchers in New Zealand found a biomarker that may be help illuminate those melanoma patients most likely to be resistant to PD-1/PD-L1-targeting immunotherapies.

Despite the many advancements, the news was not universally encouraging. For example, during a lively session on treating chronic liver failure at the European Association for the Study of the Liver in April, scientists said that in the field of liver diseases, clinicians don't agree on the best biomarkers to predict patient outcomes, let alone the role that new biomarkers might play in facilitating patient selection for clinical trials. Similarly, in cancer, tumors with a high mutational burden, such as lung tumors, have sometimes made it harder to identify actionable driver mutations.

Nonetheless, with scientific and regulatory discussions driving toward the identification and validation of biomarkers in multiple indications, there can be little doubt that the role for these important signposts and targets will only continue to grow.

7. CRISPR – PATENTS, THAT IS – AND OTHER INTELLECTUAL PROPERTY MATTERS HELD COURT

In a much-watched case, the U.S. Court of Appeals for the Federal Circuit ruled that the Massachusetts Institute of Technology Broad Institute’s CRISPR/Cas9 patent claims don't interfere with those of the University of California (UC).

The precedential decision affirmed the Patent Trial and Appeals Board's (PTAB) 2017 determination that a person skilled in the art would have had no reasonable expectation of success in applying the CRISPR/Cas9 system in eukaryotic cells, given the differences between eukaryotic and prokaryotic systems. Thus, the Broad patents, which are limited to eukaryotic cells, don't interfere with UC's claims, which do not refer to a particular cell type or environment, the court said.

In handing down its decision, the appellate court pointed out that it was not ruling on the patentability of the claims. Since its opinion was limited to whether the two sets of claims are patentably distinct, there is room for further challenges, as well as an appeal.

The decision put the U.S. at odds with the EU. In January, the European Patent Office revoked a Broad Institute patent, EP 2771468 B1, on the basis that it lacked priority over novel art. The Broad Institute immediately appealed the decision, saying the patent was overturned on a technicality based on the omission of a co-inventor.

Another U.S. patent issue that made headlines this year was sovereign immunity. After making it clear that issues of sovereign immunity are to be decided by the courts and not PTAB, the Federal Circuit ruled in Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc. that tribal sovereign immunity cannot be asserted in inter partes reviews (IPRs). The decision also opened the door to future challenges of state sovereign immunity, which state universities have used to avoid IPRs of their patents.

In other patent news, shortly after IPRs withstood a constitutional challenge in the U.S. Supreme Court, the Patent and Trademark Office proposed to lessen their bite by having PTAB follow the same claim construction standard the courts use. In the past, PTAB used a broader reading that opened claims to more prior art and earned the board the reputation of a patent killer.

And finally, it was the end of an era as the last of Roche Holding AG’s Cabilly patents expired this month. The expiration released a who's who list of the biopharma industry – both innovators and biosimilar sponsors – from licensing deals for the patents that have been foundational to monoclonal antibody development for the past 35 years.

It also was the beginning of a new era as the world’s biggest blockbuster to date, Abbvie Inc.’s Humira (adalimumab), faced biosimilar competition this year in Europe for the first time. With U.S. patents extending for several more years, Humira biosimilars aren’t expected to launch in the U.S. until 2023, in accordance with licensing agreements a handful of companies have signed with Abbvie.

8. OPIOID WOES DEEPENED AS REGULATORS, HEALTH OFFICIALS TOOK STEPS

Sadly, the raging opioid epidemic – third position on last year’s list – gained a spot on the Top 10 roster this time around, as well. A barometer of regulators’ caution arrived in June, when shares of Pain Therapeutics Inc. plunged more than 70 percent after a joint meeting of the FDA's Anesthetic and Analgesic Drug Products Advisory Committee and Drug Safety and Risk Management Advisory Committee voted 14-3 against recommending approval of Remoxy ER, the abuse-deterrent, extended-release, oral formulation of opioid drug oxycodone.

In August, the Austin, Texas-based company chalked up yet another complete response letter from the agency, not unexpected by analysts, though CEO Remi Barber called “bizarre” the gatekeepers’ decision that benefits did not outweigh the risks of using Remoxy ER – “especially during a time of staggering human and economic toll created by opioid abuse and addiction.”  The NDA sought approval of Remoxy ER for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate.

As opioid addiction was recognized as the leading cause of unintentional death in the U.S., outpacing the number of deaths due to shootings and vehicle accidents combined, the feds acted last year to change how drugs in the class are prescribed, widen prevention programs and improve emergency treatments as well as long-term treatments. President Donald Trump also created the President's Commission on Combating Drug Addiction and the Opioid Crisis.

But opioid abuse persisted into 2018, at the end of which a meta-analysis in the Journal of the American Medical Association, examining 96 randomized clinical trials and 26,169 patients with chronic non-cancer pain, found that “the use of opioids compared with placebo was associated with significantly less pain (−0.69 cm on a 10-cm scale) and significantly improved physical functioning (2.04 of 100 points), but the magnitude of the association was small,” and the drug class “was significantly associated with increased risk of vomiting.”

In November, the CDC released new statistics showing that the age-adjusted rate of drug overdose deaths involving synthetic opioids other than methadone (drugs such as fentanyl, fentanyl analogs and tramadol) increased by 45 percent between 2016 and 2017, from 6.2 to 9.0 per 100,000. Fentanyl-related deaths just about doubled each year from 2013 through 2016, and drug overdoses along with suicides increased enough most recently to slightly lower the U.S. population’s overall life expectancy.

9. BREXIT DRAMA TOOK CENTER STAGE IN EUROPE

After a year of Brexit tumult – and now with fewer than 100 days to go before waving goodbye – the U.K. ended 2018 in political stalemate, with no majority in parliament for the withdrawal agreement, or for the other option currently on the table, of leaving with no deal.As Steve Bates, chief executive of the Bioindustry Association, put it in his monthly Brexit webinar last week, while all possibilities are open, the crystal ball needed to divine the future has melted.

Facing stasis, Health Minister Matthew Hancock has triggered contingency plans to ensure maintenance of drug supplies in the event of a no-deal, crash-out exit, telling the BBC that he is now the biggest buyer of fridges in the world. The boast was intended to show the government’s Medicines Supply Contingency Planning Programme would prevent any shortages. But Hancock also dismayed the industry by extending the six weeks of possible delays at customs in the event of no deal – for which it was asked to prepare in August – to a possible six months.

That was before the crisis was deepened by Prime Minister Theresa May, who realizing she could not get approval for the withdrawal agreement, pulled the vote due to take place on Dec. 11. The volte face prompted a vote of no confidence in her leadership by members of parliament (MPs) in her own party. May won, and so cannot be challenged again for 12 months.

Parliament is now promised its say on the withdrawal agreement on Jan. 14. May is presiding over a minority government, in a parliament where most MPs favor remaining in the EU. Given 117 MPs in her party voted against her in the confidence vote, with 200 for, she is unlikely to get the 319 votes needed for approval.

The key sticking point is the land border between the U.K. and the EU in Ireland. In response to May’s supplications, the EU maintained its position that there must be a legal backstop to prevent a hard border – with customs and immigration controls – between the Republic of Ireland and Northern Ireland if the U.K. and EU cannot negotiate a future trade deal. Such a trade deal would be negotiated during the transition period from March 2019 to December 2020, which will be triggered if the withdrawal agreement is approved. The industry is in favor of the outlines of this future relationship, as set out in the political declaration accompanying the withdrawal agreement. For now, however, these are intentions, not policies.

Routes around the impasse in parliament – a ‘managed’ no deal, a trade deal with the EU like that of Norway or Canada, a general election and a second referendum – have all been proposed. But, for now, none could secure a majority. Since the U.K. parliament clearly has to reach a majority on how the U.K. leaves the EU, there will be more maneuvering in the lead-up to the Jan. 14 vote. But with the clock ticking down, uncertainty continues to rule.

Following an edict from EMA to prepare for the U.K. to become a third country, the pharma industry has in many senses already had a de facto no-deal Brexit. Marketing authorizations and batch testing facilities have been moved to mainland Europe and are unlikely to be brought back, even if there is a deal. But there remain many things agreed in principle that are up in the air in the absence of a deal. These include the status of EU27 employees in the U.K. and vice versa; access to European Investment Fund venture capital; participation in EU research projects; what role, if any, the U.K. Medicines and Healthcare products Agency plays in EMA regulation in the future; the status of clinical data generated in U.K. trials. And, and, and.

EMA itself is full steam ahead with its relocation from London to Amsterdam, where it will arrive enfeebled, with 25 percent of its staff confirmed as choosing not to move. The agency says it will gradually resume activities that were suspended and reduced to cope with the move from July 2019. But the first half of the year will see a further reduction of its work, during the final phase of its physical relocation.

The EU, too, has published contingency plans designed to prevent damage to EU27 member states if there is a no-deal Brexit, but there is no mention of medicines or health.

Embroiled in the political crisis as they are, Bates said U.K. politicians have very little understanding of the practicalities facing the industry. “They wrongly think there is more flexibility than there is,” he said, pointing in particular at Hancock’s change in no deal contingency planning from six weeks to six months. It will be difficult to address that with so little time to go. “If delays at the border are longer than previously discussed that makes it harder for the sector,” Bates said. “We’re under no illusion this will be easy or smooth.”

Nor is it right for the government to assume everyone does what they are being asked. Wholesale pharmacists already are reporting increased drug prices and agitating to be released from National Health Service contractual obligations to supply at any price. There also are concerns that drugs stockpiled in the U.K. will be exported if the pound falls further in value against the euro.

Meanwhile, as part of the contingency preparations, the government is planning emergency powers requiring pharmacists to substitute at the point of dispensing if a prescribed drug is not available. All of which leaves Bates to ponder, “How far are we going from a standard medicines market to a planned economy in our sector?”

His crystal ball may have melted, but after 2.5 years of intensive lobbying to get a Brexit deal that recognizes the needs of biotech, Bates ended 2018 predicting the March 2019 deadline will be extended.

“Procrastination has been the leitmotif of leadership, so therefore, there will be a fudge, leading to an extension,” said Bates. That would open the way for more talks with the EU, a general election, or another referendum. “It’s not deal, no deal, or no Brexit; it’s deal, no deal, fudge, or no Brexit,” he said. “Anything can happen and probably will.”

10. TRADE ISSUES ESCALATED BEYOND WAR OF WORDS

It should come as no surprise that threats, tariffs and trade treaties round out the Top 10 on BioWorld’s 2018 list. After all, President Donald Trump campaigned on his art of the deal and promised to “make America great again” by renegotiating free trade agreements (FTAs) that he claimed put the U.S. at a disadvantage.

Some of those negotiations went smoothly, resulting in revised agreements aimed at better balancing trade. For instance, Trump and South Korean President Moon Jae-in signed a revised FTA in September that both leaders said would expand trade between the two countries. The changes made to the 2012 Korea-U.S. agreement include a commitment from South Korea to amend its premium pricing policy for global innovative drugs and to ensure nondiscriminatory and fair treatment for U.S. biopharma exports.

The signing of that agreement came as new U.S. tariffs kicked in on $200 billion worth of Chinese goods, including biotech materials and medical devices. More tariffs were added as the trade war between the U.S. and China escalated for several months. Heating the rhetoric on the U.S. side were claims that China’s Made in China 2025 initiative was aimed at replacing foreign technology with Chinese technology in the China market through any means possible so as to ready Chinese companies for dominating international markets. The “any means possible” came with accusations of China-authorized hacking and theft of U.S. trade secrets.

Concerns about such threats from foreign nationals spread to U.S.-funded medical research. When prompted by lawmakers at an August Senate hearing, NIH Director Francis Collins disclosed a new investigation into thefts of federally funded research as he answered questions about the increasing risks to the security of biomedical research and the steps the NIH was taking to deal with those threats.

While Collins didn't discuss details about the investigation at the time, he said intellectual property stemming from NIH-supported research and the integrity of the agency's peer-review process has been under constant threat of risk, and the magnitude of the risks was increasing. He outlined several steps the agency was taking to address those risks without closing the door to foreign researchers.

Some of the findings of the investigation – including peer review violations, undisclosed foreign financial conflicts and undisclosed conflicts of commitment – were disclosed at a meeting of the NIH’s Advisory Committee to the Director a few weeks ago. A few countries were implicated, but the report focused on the involvement of the Chinese Talent Program, which has recruited thousands of top tier researchers with access to intellectual property. Most of the recruits are involved in research funded by U.S. agencies.

On a more positive note, Canada, Mexico and the U.S. negotiated an update to the 25-year-old North America Free Trade Agreement. The negotiations were rocky at first, with the Canadian delegates walking away from the table until it became clear that Mexico and the U.S. were finalizing a pact without them.

Although the agreement, which still must be ratified, strengthens intellectual property rights, it’s biologic data protection provision has pleased few in the biopharma sector. The agreement sets the protection term at 10 years. That’s two shy of the U.S.’s 12-year period, which brand companies were pushing for, and it’s two years longer than Canada’s and double Mexico’s current standard, which doesn’t sit well with the makers of generic drugs. The deal also expands the scope of products eligible for the 10 years of data protection.

The U.S. Trade Representative lauded the new agreement, saying it includes the most comprehensive enforcement provisions of any FTA and it would be the first to require civil remedies, criminal remedies, a prohibition on impeding licensing of trade secrets, protections for trade secrets during the litigation process and penalties for government officials who wrongfully disclose trade secrets.

AND NO 2018 NEWSMAKER LIST WOULD BE COMPLETE WITHOUT ... DRUG PRICING

Prescription drug prices have become such a perennial, overarching concern that they merit a mention of their own outside the Top 10 list. In 2018, U.S. lawmakers missed few opportunities to raise the issue, and many of them made drug prices central to their re-election campaigns.

Throughout the year, congressional hearings on health care issues were filled with rhetoric about who’s to blame for high drug prices and potential ways to force prices down. Most of the ideas have been heard before – reimportation, direct Medicare negotiation, increased competition, crackdowns on brand shenanigans, etc.

Drug prices were a key issue when Alex Azar was being confirmed as secretary for Health and Human Services in January. Many lawmakers thought that, given his biopharma career, he would be too cozy with industry to do much to rein in drug prices.

The rhetoric increased in May when Trump unveiled his blueprint to lower the cost of drugs. He touted his plan as "the most sweeping action in history to lower the price of prescription drugs for the American people" and vowed to get rid of the middlemen in the drug supply chain and to make other countries pay their fair share for drug development. Critics wryly noted the positive response of the biopharma industry and Wall Street.

Drug companies didn’t deliver the massive price cuts the president promised, but some of them did scale back on their semi-annual increases. And following a private conversation with the president, Pfizer Inc. curtailed the midyear price hikes it had previously announced.

While Congress talked, the administration looked for ways it could put pressure on drug prices and increase generic/biosimilar competition. Azar, FDA Commissioner Scott Gottlieb and Centers of Medicare & Medicaid Services (CMS) Administrator Seema Verma rolled out several new policies to tackle the issue. For instance, the FDA created a list to shame brand drug companies that refuse to provide the necessary samples for generic and biosimilar development. It also prioritized the review of generic applications to increase competition.

CMS proposed changes to Medicare coverage of Part B drugs and the protected classes of Part D drugs to force more competitive pricing. It reduced its reimbursement of Part B drugs purchased through the 340B discount program and, after several delays and a lawsuit filed by the American Hospital Association, recently announced that it would begin implementing a final rule in January that calculates ceiling prices for the 340B Drug Pricing Program and sets civil money penalties for drug companies that overcharge safety net health care providers for covered outpatient drugs.

CMS also banned the gag clauses payers placed on pharmacies to keep them from informing Medicare beneficiaries of cheaper alternatives for paying for their prescriptions. And it proposed requiring drug companies to include the list price of prescription drugs in their direct-to-consumer advertising. After CMS banned the gag clauses, Congress passed legislation to prevent health insurance issuers and group health plans, as well as Medicare and other government plans, from imposing the gag clauses on pharmacists.

As the year wrapped up, Azar continued to push for value-based drug pricing and a switch from the current rebate system that shrouds drug prices in a dense fog of mystery to fixed discounts.

Although the U.S. has the dubious distinction of having the highest drug prices in the world, the cost of life-saving drugs continues to be a problem in other countries. For example, the U.K.’s National Institute for Health and Care Excellence continued to balk at the price of promising new cancer drugs, such as CAR T therapies like Gilead Sciences Inc.’s Yescarta (axicabtagene ciloleucel), forcing companies to negotiate a more cost-effective price to get into the U.K. market.

And just a few weeks ago, a government program in China aimed at lowering generic drug prices plunged the stock of Chinese drug companies into their worst slump in 10 years.

A FEW HONORABLE MENTIONS

In an industry as vast and complex as biopharma, picking the top newsmakers is no easy task. Here’s a peek at some other stories that caught our attention.

Payment models: Gene therapy approvals put the need for new payer models front and center. "There will be a need for some fancy footwork and creativity as we move forward,” said Geoff Nichol, senior vice president of global clinical development and chief medical officer at Biomarin Pharmaceutical Inc., at the 2018 Biotech Showcase.

Rare RTF: “What is happening at Celgene?” was the question on everyone’s mind after the red-faced company earned a refuse to file letter on its ozanimod NDA in multiple sclerosis. "How many self-inflicted wounds are excusable?" asked Leerink Partners LLC analyst Geoffrey Porges.

Ebola: One month in, the World Health Organization (WHO) was cautiously optimistic that the Ebola virus outbreak threatening the city of Mbandaka in the Democratic Republic of Congo was contained by the ring vaccination program started on May 21. By year-end, it was the second largest on record. "It's an enormous logistical effort to reach every alert of a case and then every contact of a case," said Peter Salama, WHO's deputy director general for emergency preparedness and response.

Turnover at the top: The departure of two key Amgen Inc. executives – Sean Harper, executive vice president of R&D, and Tony Hooper, executive vice president of global commercial operations –turned heads when disclosed the day after Gilead Sciences Inc. said CEO John Milligan and board chair John Martin would step down at year-end. And they were hardly alone, leaving LLC's Geoffrey Porges to ponder whether "safe and stable" is good enough for biotech pioneers "as portfolio challenges mount."

Data privacy: In June, California took the lead in imposing the toughest data privacy law in the nation, the Consumer Privacy Act, which will impose stringent requirements on the state's high-profile tech companies in 2020. Its impact on the life sciences industry remains unclear, but concerns about DNA databases – such as those used to identify the Golden State Killer – are important for the industry to tackle. "There's still some question as to the use of third parties to handle product complaints and adverse event reports," whose arrangements are "crucial to protecting patient safety,” said Brett Johnson Sr., director of policy and regulatory affairs for the California Life Sciences Association.

Oncolytic viruses: Even with continued jostling inside the larger immuno-oncology space, the oncolytic virus began staking a firmer claim to drug-developer interest. "There continues to be an appetite for oncolytic virus immunotherapies," Leerink analyst Jonathan Chang wrote in an August report.

FDA funding: For the first time in 22 years, the NIH and most of the other HHS agencies headed into fiscal 2019 fully funded. "Today marks a victory in the return to regular order," Rep. Tom Cole (R-Okla.) said at the time. However, the Labor/HHS/Education spending bill that was signed into law before the Sept. 30 deadline didn’t cover the FDA, which continued to limp along on a continuing resolution and was caught in the partial shutdown of federal agencies yet to receive full funding.

PARPs: Lynparza's front-line effects in the treatment of ovarian cancer were the most eye-popping data on poly-(ADP-ribose) polymerase (PARP) inhibitors presented at the European Society of Medical Oncology 2018 Congress, but they were the tip of the iceberg in terms of understanding how to use PARP inhibitors and information on BRCA mutation status. Capping BRCA testing at age 70, as is being discussed in some health systems, "will miss significant numbers of patients,” said Angela George, clinical lead for the Cancer Genetics Unit of the Royal Marsden National Health Service Foundation Trust.

Sinovac: After nearly collapsing in the first half of the year due to a series of disputes over its privatization move, Chinese vaccine maker Sinovac Biotech Ltd. remained mired in an uncharacteristically public boardroom dispute and resorted to using the Hong Kong courts: "Unknown individuals have used a falsified version of the company seal of Sinovac Hong Kong and used unauthorized forgeries of the signatures of Weidong Yin and Nan Wang, directors of Sinovac Hong Kong, to submit false letters of resignation to the Hong Kong Companies Registry," the company said in a statement.

BioWorld staffers Michael Fitzhugh, Nuala Moran, Randy Osborne, Karen Pihl-Carey, Marie Powers, Mari Serebrov, Cormac Sheridan and Peter Winter contributed to this report.