Promising opportunities

Private equity fund targets life-sciences and healthcare services, starting with CRO

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PITTSBURGH & PHILADELPHIA—Two accomplished CEOs—one from the healthcare industry and the other from the pharmaceutical field—have launched Velocity Fund Partners, a private equity fund targeting the life-sciences and healthcare services sectors. Dr. Kenneth Melani, the former president and CEO of Highmark Inc., and James M. Nolan, CEO of several life-sciences companies, are the partners of Velocity.
“We focus on companies that offer a significant scientific or market advantage,” said Melani, managing partner of Velocity Fund Partners. “Our unique background in healthcare management can help accelerate a company’s trajectory from a commercialization and a growth perspective.”
In addition, Velocity Fund Partners announced its first acquisition of a global contract research organization (CRO), as well as a significant investment in SkinJect, a novel method that delivers a drug to treat skin cancer.
The CRO in question, Indipharm, is being relaunched as InClinica. Specializing in leading companies through clinical trials, InClinica works across all phases of clinical development, with a particular strength in assisting small to mid-sized companies that are beginning first-in-man and Phase 2 studies. Dr. Edward J. Brennan, Jr., founder and president of Indipharm, is now chief medical officer of InClinica. Michael Fare will serve as chief operating officer and chief technology officer.
According to Fare, “Many drugs fail to advance during clinical research for reasons unrelated to efficacy or safety. An experienced clinical CRO anticipates challenges and plans ahead, ensuring a smoother progression through clinical development. We have taken the time and care to find people with complementary backgrounds in the drug and device development enterprise, so that we can efficiently and intelligently assess each potential sponsor’s development program and determine where the stumbling blocks might be.”
He added, “Although our mission is to develop the sponsor’s program clinically, we need to understand everything about the program—for a compound, its efficacy data, its DMPK profile, its toxicology results, its CMC section, and for a devices or a diagnostic assay, it could be the design of its proof-of-principle study and resulting data, or its sensitivity and specificity and positive predictive value, and so forth. We also recognize that we can’t know everything about everything, which is why we have a strong team of consultants, who can assist with patent assessments, or qSAR, or structural liabilities, or regulatory hurdles.”
In addition to its headquarters in the Valley Forge area, the CRO also has offices in the United Kingdom, Israel and Malaysia. Among other studies, InClinica is currently managing a global Phase 3 clinical trial in lung cancer. The CRO anticipates working in oncology, metabolism, cardiovascular disease, respiratory disease and, broadly, inflammation. Psychiatric disorders are a possibility as well, Fare said.
According to Melani, now chairman of InClinica, the CRO’s existing global footprint and experience in early drug and device development and clinical trials, combined with Velocity’s unique experience and contacts in both healthcare and life sciences, will “enable InClinica to provide companies with significant value in all clinical phases.”
Nolan, now CEO of InClinica, remarked, “With our management team’s unique and extensive experience in drug and device discovery and development, InClinica knows what is needed to produce successful clinical trials. We look forward to leading our clients toward regulatory approval and the right place in the market.”
InClinica’s management team brings more than 100 combined years of clinical research experience in multiple diseases and device technology. The CRO has a special focus in oncology, dermatology, metabolic disease and inflammatory diseases. The team also has extensive experience in cardiovascular disease, gastrointestinal disorders and infectious disease.
Fare believes that Velocity’s “unique background in healthcare management” can help to accelerate InClinica’s trajectory from a commercialization and a growth perspective. As he explained, “The Affordable Care Act has had and will continue to have profound effects on the American healthcare system. The impact of cost for any therapy or device to the consumer and to insurers and its net contribution to quality of life will be critical drivers of market penetration. That’s been true to an extent in the past, but the ACA through the federal government amplifies the trend substantially.”
He added, “Velocity’s managing partner, Dr. Kenneth Melani, who was CEO of a major regional insurer, has a deep understanding of the calculus involved in regulatory approval, pricing, reimbursement and clinical outcomes. As important as the science is to a program, the choice of the right use of a therapy or device at the right price plays an equally important role in maximizing a product’s return on investment. Ken offers a unique perspective on this cost-benefit balance.”
Velocity has taken a major ownership interest in InClinica. At present, there are no plans for other Velocity acquisitions to be involved with InClinica and its operations.
Velocity also made a large investment in SkinJect, a device to treat basal and squamous cell cancer. SkinJect, a patch that delivers a drug through dissolvable microneedles, was developed by Dr. Louis D. Falo, chairman of the dermatology department at the University of Pittsburgh, and Dr. O. Burak Ozdoganlar, professor of mechanical engineering and materials science and engineering at Carnegie Mellon University. SkinJect, which will offer a simple treatment for patients and provide a cost-effective alternative to surgery, is designed to help patients avoid the disfigurement that often results when a basal cell is removed by scalpel in a procedure known as Mohs surgery.

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