MONITORING INTERNATIONAL TRENDS

Prepared August 2011

The NBA monitors international developments that may influence the management of blood and blood products in Australia. Our focus is on:

· Information that may have an impact on global supply, demand and pricing, such as changes in company structure, capacity, organisation and ownership

· Potential new product developments and applications

· Global regulatory and blood practice trends and

· Other emerging risks that could potentially put financial or other pressures on the Australian sector.

A summary of current matters of interest appears below. Highlights include:

· The US Food and Drug Administration (FDA) has recommended more conservative dosing of erythropoiesis – stimulating agents in patients with chronic kidney disease.

· CSL Behring has been granted Orphan Drug Designation by the

European Commission for the development of its recombinant fusion protein linking coagulation factor VIIa with albumin (rVIIa-FP).

· CSL’s capacity to produce Hizentra has more than doubled.

· NovoNordisk is investing in a new manufacturing facility.

· CSL has removed Vivaglobin from the market.

· Baxter’s HyQ injectable immunoglobulin has performed satisfactorily in

a Phase III trial.

· An active pipeline in clotting factors has seen some progress.

· Serious doubts have been raised about whether chronic fatigue syndrome is linked to xenotropic murine leukemia virus (XMRV).

· Two significant studies on red blood cell storage have been reported.

1. Regulatory Matters:

a. The US FDA publicised modified recommendations for more conservative dosing of erythropoiesis-stimulating agents (ESAs) in patients with chronic kidney disease (CKD). ESA labels now warn: In controlled trials with CKD patients, patients experienced greater risks for death, serious adverse cardiovascular reactions, and stroke when administered ESAs to target a hemoglobin level of greater than 11 g/dL. No trial has identified a hemoglobin target level, ESA dose, or dosing strategy that does not increase these risks.

· ESA labels now recommend: For patients with CKD, consider starting ESA treatment

when the hemoglobin level is less than 10 g/dL. This advice does not define how far below 10 g/dL is appropriate for an individual to initiate. This advice also does not recommend that the goal is to achieve a hemoglobin of 10 g/dL or a hemoglobin above 10 g/dL. Individualize dosing and use the lowest dose of ESA sufficient to reduce the need for red blood cell transfusions. Adjust dosing as appropriate.

· The label previously recommended that ESAs should be dosed to achieve and maintain haemoglobin levels within the range of 10 to 12 g/dL in CKD patients.

b. Baxter announced that the Committee for Medicinal Products for Human Use (CHMP) of

the European Medicines Agency (EMA) has issued a positive opinion for extension of the therapeutic indications of KIOVIG to include a new indication for multifocal motor neuropathy (MMN). With adoption by the European Commission, Baxter will receive

marketing authorization for KIOVIG MMN indication in all European Union (EU) Member States. KIOVIG is marketed as GAMMAGARD LIQUID(TM) [Immune Globulin Intravenous (Human)], in the US.

c. Shire announced that the Pulmonary-Allergy Drugs Advisory Committee to the FDA

recommended that the efficacy and safety data provides substantial evidence to support approval of Firazyr (icatibant) for the treatment of acute attacks of hereditary angioedema (HAE) in patients 18 years and older. In addition, the Committee recommended self-administration of the drug by patients.

d. GTC Biotherapeutics, acquired by LFB Biotechnologies in 2010, has been granted a patent covering any production of therapeutic protein in the milk of transgenic animals. The patent, granted by the US Patent and Trademark Office, extends to 2027. GTC said it has also received a new US patent for its lead product, ATryn, an anticoagulant and anti-inflammatory product derived from the milk of genetically modified goats. The new patent relates to a method of treatment of patients with a particular protein deficiency or inflammation. ATryn is the only transgenically produced therapeutic protein that has been approved by both the FDA and EMA.

e. CSL Behring has been granted Orphan Drug Designation by the European Commission for the development of its recombinant fusion protein linking coagulation factor VIIa with albumin (rVIIa-FP), a novel therapy to treat hemophilia A and hemophilia B patients with inhibitors. The designation would entitle CSL Behring to exclusively market recombinant factor VIIa fused with albumin in Europe for a period of 10 years if the product at the stage of license application fulfills the orphan drug requirements. Based on the submission of data from the company's Pediatric Investigation Plan, once available, the

10-year market exclusivity may be extended to 12 years. Under these designations EMA will also provide CSL Behring with development assistance and reductions in regulatory fees.

f. CSL Behring’s capacity to produce Hizentra®, its subcutaneous immunoglobulin, more than doubled following FDA approval of the company’s high tech production facility in Bern, Switzerland. Demand for Hizentra is growing rapidly in the US, and CSL Behring anticipates regulatory approvals of Hizentra in Europe.

g. CSL Behring announced that the European Commission has granted marketing

authorization for Hizentra for treating patients diagnosed with primary immunodeficiency (PI) as well as secondary immunodeficiencies. This is valid for all

29 European/European Economic Area member states.

h. At its August meeting, the FDA’s Transmissible Spongiform Encephalopathies Advisory Committee will discuss donor deferral (for time spent in Saudi Arabia) to reduce the risk of variant Creutzfeldt-Jakob disease (vCJD) by blood and blood products and human cells, tissues and cellular and tissue-based products.

i. LFB was issued with a US Patent titled “Monoclonal Antibodies with Enhanced ADCC Function”. LFB has developed in clinical trials two monoclonal antibodies with this new technology: One is a monoclonal antibody targeting alloimmunization in expectant mothers that are Rhesus negative with a baby that is Rhesus positive.

j. The FDA Blood Products Advisory Committeee at its August meeting will discuss a study on the incidence of Trypanosoma cruzi infection in blood donors and its implications for selective testing of blood donors. The Committee will also discuss measures to preserve the blood supply during a severe emergency (Trypanosoma cruzi is the parasite which causes Chagas disease).

k. The FDA is convening in September a public workshop entitled: “Quarantine Release Errors in Blood Establishments.” The purpose of this public workshop is to provide a forum for discussion of quarantine release errors (QREs) and provide FDA and industry with information necessary to reduce the rates of QREs.

l. A number of Medicines Australia member companies are considering delaying bringing new drugs into the country, following the Australian government's decision to defer listing

of new medicines on the Pharmaceutical Benefits Scheme (PBS), a Senate Committee has been told as it investigates the new policy.

m. The FDA on 21 July issued draft guidance (for comment purposes only) on mobile medical applications. This was to inform manufacturers, distributors, and other entities about how the FDA intends to apply its regulatory authorities to select software applications intended for use on mobile platforms (mobile applications or "mobile apps"). At this time, the FDA intends to apply its regulatory requirements solely to a subset of mobile apps that it is calling mobile medical applications or "mobile medical apps."

2. Products

a. Immunetics received a grant to commercialize its BacTx® rapid test for detecting bacterial contamination in platelets. Immunetics has concluded clinical trials for BacTx® and is submitting an application for approval to the FDA this year. Immunetics also received grants from the National Heart, Lung, and Blood Institute (NHLBI), an agency of the National Institutes of Health (NIH). The technology underlying the test is protected by

a recently issued US patent, and foreign patents with approved claims are in process of

issue.

b. Fenwal received CE Mark approval for a therapeutic plasma exchange (TPE) protocol for the company’s Amicus® system. TPE removes substances from blood that can cause or complicate disease and is used in the treatment of a wide range of haematologic, neurologic, autoimmune, and kidney disorders. The Amicus® system is used globally to collect platelets, platelets with concurrent plasma and red cells, and mononuclear cells used for therapeutic applications and clinical research.

c. Affymax and Takeda announced the submission of a New Drug Application (NDA) to the FDA for the investigational agent peginesatide (formerly known as Hematide™) for the treatment of anemia associated with chronic renal failure in adult patients on dialysis. Peginesatide is a synthetic PEGylated peptide compound that binds to and activates the erythropoietin receptor, thus acting as an ESA.

d. A continuous spectrophotometric haemoglobin sensor may offer a new approach for non–invasive blood haemoglobin monitoring during surgery, according to a study published in the April issue of Anesthesia Analgesia. Ronald D. Miller, from the University of California in San Francisco, and his colleagues compared the accuracy of SpHb and point-of-care HemoCue to that of the invasive laboratory Co-Oximetry (tHb) method for monitoring blood haemoglobin during perioperative transfusions.

e. Medgenics announced an extension of its agreement with Baxter for the joint development of the Factor VIII Biopump. Confirmatory studies will be conducted implanting Factor VIII Biopumps in mice. During the extended agreement, which will expire by 30 September 2011, Baxter has the opportunity, to exercise an exclusive option for 6 months to negotiate with Medgenics an agreement for commercialization of the Biopump Factor VIII technology. Medgenics’ Biopump is a proprietary tissue-based platform technology for the sustained production and delivery of therapeutic proteins using the patient's own skin biopsy for the treatment of a range of chronic diseases

including anaemia, hepatitis C and haemophilia. Medgenics has three long-acting protein therapy products in development based on this technology. Hemodure is a sustained Factor VIII therapy for the prophylactic treatment of haemophilia.

f. CSL Behring took its immune globulin subcutaneous (human) 6% liquid (Vivaglobin) off the market on 4 April 2011. It was on the FDA watch list.

g. Inspiration Biopharmaceuticals reported on its clinical development program for OBI-1, an intravenous (IV) recombinant porcine factor VIII product (rpFVIII), intended for the treatment of bleeding in people with hemophilia A with inhibitors and in people with acquired hemophilia. The data were presented at the 23rd Congress of the International Society on Thrombosis and Haemostasis (ISTH) in Kyoto.

h Nehora Photonics of Israel is developing optical technology for the non-invasive continuous monitoring of hematocrit, the proportion of the blood, by volume, that contains red blood cells.

i. In July, Baxter presented preclinical data to the 23rd Congress of the ISTH on its

investigational compound BAX 499 for potential subcutaneous haemophilia therapy and final Phase I data on recombinant von Willebrand Factor.

· BAX 499 is in early stage clinical development to treat blood clotting disorders haemophilia A and B by targeting a novel pathway responsible for regulating the clotting process. The studies presented at ISTH validate the pathway as a potentially viable target for the treatment of haemophilia.

· Data were also presented on recombinant von Willebrand Factor (rVWF), the only recombinant replacement protein currently in clinical development, to assess its

safety and efficacy for the treatment of von Willebrand disease (VWD). The data indicated overall that the pharmacokinetics of rVWF and pdVWF were found to be similar. A larger Phase III trial study is required to further assess the safety and efficacy of rVWF. Baxter anticipates beginning recruitment later this year.

j. Biogen Idec's CEO, speaking on 26 July, said “we shared important data today at the

23rd Congress of the International Society on Thrombosis and Haemostasis in Kyoto, Japan. Six out of our eight abstracts were platform presentations and focused on the advancements of our hemophilia programs. One presentation that I'll highlight includes a Phase I 2a study of our long-lasting fully recombinant Factor VIII Fc fusion protein, which showed that the drug demonstrated on approximately 1.7 fold increase in half-life compared with Advate, a commercially available Factor VIII product in 16 previously treated patients with severe hemophilia A. Our long-lasting recombinant Factor VIII had comparable -- in dose-dependent peak plasma concentration, comparable recovery but reduced clearance relative to Advate. Importantly, no inhibitor formation was observed. These data indicate that there would be 50 to 80 less injections per year for hemophilia A patients”.

k. The FDA has approved the subcutaneous administration of Baxter’s Gammagard Liquid

10% [Immune Globulin Infusion (Human)] for patients with PI. Subcutaneous use of GAMMAGARD LIQUID allows patients to self-administer their therapy at home on a weekly basis.

3. Market structure and company news:

a. NovoNordisk plans to invest €134 million in a new biologics manufacturing facility at its Kalundborg site, the largest in the group's production network. The new capacity will be used to manufacture Factor VIIa, as well other biologic medicines. The company says it needs to boost capacity for its existing products, but "also to be ready to produce future haemophilia products that are in the pipeline". Nearest to the

market is Novo's recombinant factor XIII drug NN1841. The drug was filed for

approval in the US in February. An improved Factor VIII called N8 is in phase III trials for haemophilia A, as is a long-acting formulation of Factor IX for haemophilia B. The packaging facility is expected to be operational in 2013, while the other facilities are expected to be up and running in 2015. A recent report in the Financial Times shows Novo Nordisk is one of the world’s ten most valuable medical companies. It occupies position 115 on the list of largest companies in the world.

b. Canadian company Compass Biotechnologies announced that the first product to be sourced from its manufacturing partner (PanGen of South Korea) will be erythropoietins (EPO).

c. OPK Biotech LLC has grown from eight employees to over 100 since its commencement of operations in October 2009. The Massachusetts company manufactures two oxygen therapeutics: Hemopure® [hemoglobin glutamer – 250 (bovine)], or HBOC-201, for human use and Oxyglobin® [hemoglobin glutamer – 200 (bovine)], or HBOC-301, for veterinary use. Hemopure has been approved for use the treatment of acute surgical anaemia in South Africa since 2001 and recently won approval in Russia for acute anaemia.

d. ProMetic Life Sciences has received a follow-on purchase order for its Mimetic Ligand product, used for biomolecular purification manufacturing processes. The order stems from a long-term supply agreement with Halozyme Therapeutics.