Considerations on the financing of future TB Vaccine Development

1. European Investment Bank Considerations on the financing of future TB Vaccine Development Thomas C. Barrett TB Vaccines Third Global Forum Cape Town, South Africa 27 March 2013

2. The Situation So Far • So far USD 600m spent and a lot of effort to develop a number of promising TB vaccine candidates. • Funding has been provided primarily through grant funding, complemented by some industry funding for individual candidates and a small amount of equity. • Current Global TB vaccine portfolio: • 1 clinical candidate in 2000; 15 candidates tested in clinical trials to date • 12 clinical trials currently underway • More than 25 discovery leads and preclinical candidates • Efforts to diversify the portfolio underway • Down selection required to maximize the efficient use of resources and streamline the preclinical portfolio • Lessons learnt from historical trials offer key insights into the biology of tuberculosis informing development efforts • Clinical trial capacity and expertise to run large-scale efficacy trials • Improved knowledge around biomarkers and correlates of protection informing on vaccine design and animal models

3. The Opportunity for Global Collaboration • This health crisis presents us with an opportunity to collaborate differently as well as a challenge. • We can carry on as we are, spending scarce resources on increasingly expensive clinical trials on individual vaccine candidates, hoping one will succeed, • …or we can work together, pooling our resources, to make objective decisions with the aim of getting to our goal of at least one effective TB vaccine, cost effectively, as soon as possible. • The key difference between these approaches is that of partnership between the public and private sector entities capable of collaborating together in the common interest. The necessity for partnership is increasingly evident both from the scale of the medical challenge; technological risks and uncertainty and the need for prioritization of public and private sector resources in response to prevailing constraints.

4. Invitation to Global Collaboration • The IP holders are invited to share their knowledge, learn from the failures of others and work together to develop the best candidates. • The Funders are invited to work together and fund the best candidates. • Industry is invited to prepare for the production and distribution of the successful candidate(s). • The Public Health Authorities are invited to support this approach by demonstrating their commitment to implementing a comprehensive TB vaccination programme when the successful candidate is launched.

5. Overview of Possible Funding Solutions Dependent of market strategy Average cost/development stage (can include multiple clinical trials) Average cost/development stage (can include multiple clinical trials) $8M $10m $30m $150m PUSH MECHANISM PULL MECHANISM PHARMA COST-SHARING • MARKET ENHANCING MECHANISMS • Validate the market potential with key EU MS and other HIC/UMIC through a pre-AMC like mechanism utilizing a pre-defined targeted product profile) • Debt finance for the commercial manufacturing scale-up • Debt finance to governments in support of comprehensive TB vaccination programs • Establish robust, evidence-based national health economic data to facilitate vaccine adoption • WHO and national/regional regulatory strategies to facilitate rapid adoption and scale-up • GAVI & other donors commitment • GRANT Cost-sharing • EDCTP • Donors channeled through • portfolio manager • GRANTS* • European Commission • EDCTP (Phase 2a) • Netherlands - DGIS • UK-DFID • Bill & Melinda Gates Foundation • NIH • PARMA COST –SHARING • STRATEGIC STAGE- BASED DEBT/EQUITY • Debt financing with/without guarantees in the later phases of development as part of a well-structured pull mechanism • Late-stage equity fund (impact investors) • Note: The closer to commercialization the debt is utilized the lower cost of capital * Top 5 donors listed provide more than 80% of the funding for TB vaccine R&D globally

6. Next Proposed Steps The Collaborative Partner will engage with the wider stakeholder community to: • Continue regular exchange with key IP owners/industrial partners (bilateral meetings and industry roundtables); • Present the business plan to major donors and funders; • Engage the broader scientific community to test the assumptions in the business case; • Vet various push and pull mechanisms with major IP owners and vaccine manufacturers to optimize alignment; • Validate the market among various high- and upper middle-income countries within the EU and other regional countries; • Assess year-over-year (YOY) portfolio funding needs and identify investment strategies to close gaps; • Refine the business case to include key stakeholder feedback.

7. Contacts Thomas C. Barrett Shiva Dustdar Director Head of RDI Advisory Advisory Services DepartmentAdvisory Services Department Tel: +352 4379 87006 Tel:+352 4379 87316 Email: t.barrett@eib.orgEmail: s.dustdar@eib.org John Davis Head of Division Project Directorate Tel: +352 4379 88586 Email: j.davis@eib.org