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North Shore-LIJ spinoff lands $28.8M drug trial agreement

Thomas Thornton, a senior vice president at North

Thomas Thornton, a senior vice president at North Shore-LIJ, and Patricia Marcy, executive director of Vanguard Research, review research results on the campus of North Shore University Hospital in Manhasset, on Dec, 3, 2014. Photo Credit: Newsday / Audrey C. Tiernan

Vanguard Research Group, a Manhasset company owned by North Shore-Long Island Jewish Health System and one of its executives, has signed a four-year, $28.8 million agreement to manage a clinical trial for an injectable form of a schizophrenia drug.

The deal highlights North Shore-LIJ's push into businesses beyond running a gigantic hospital system.

The not-for-profit health system, under chief executive Michael J. Dowling, has been evolving to keep pace with changes in the health care market, expanding into New York City and the northern suburbs, and starting an insurance company. It also founded a venture capital arm, North Shore Ventures, in 2013. Vanguard is an early spinoff of North Shore Ventures.

Vanguard will manage a clinical trial evaluating Abilify Maintena, a once-monthly injectable version of a blockbuster drug made by Otsuka America Pharmaceutical Inc. Vanguard is majority owned by North Shore-LIJ. Dr. John Kane, the health system's senior vice president of behavioral health services, owns a minority stake.

Vanguard's market opportunity arises from the difficulty in getting useful results from clinical trials and the trend for big pharmaceutical companies to outsource those trials, officials said.

"We want to be trendsetting in having a better chance of conducting successful trials," said Kane, who is chair of psychiatry at the Zucker Hillside Hospital campus of The Feinstein Institute for Medical Research, a unit of North Shore-LIJ, and who has consulted with pharmaceutical companies on designing clinical trials and evaluating their data for decades.

Kane said Vanguard is in talks with other drugmakers to run clinical trials.

The oral version of Abilify, used to treat depression and bipolar disorder as well as schizophrenia, notched more than $6 billion in sales in the United States in 2013, making it No. 1 among all pharmaceuticals, according to IMS Health, but that drug's patent expires in 2015.

Otsuka America, whose parent company is Japan-based Otsuka Holdings Co. Ltd., could help offset revenue lost from the oral version if it can shift patients to Abilify Maintena, which already has approval from the Food and Drug Administration.

Vanguard's clinical trial seeks to show that Abilify Maintena's monthly injection reduces chances of a relapse in the early stages of schizophrenia compared with oral versions, and provides better oversight that the participant is properly medicated.

Vanguard is hoping to enroll its first patient next week in Fort Lauderdale, Florida, or Muskegon, Michigan, executive director Patricia Marcy said.

She said Vanguard aims to enroll about 500 patients at a nationwide network of community mental health centers and academic psychiatric centers.

Another early-stage company in North Shore Ventures' portfolio is CirrusHealth, whose mobile application provides patients with detailed discharge instructions.

"You can expect more of this activity out of North Shore," said Thomas Thornton, senior vice president of North Shore Ventures. "Most will be on Long Island. Some will, we hope, eventually attract venture investment."

Leading hospital systems nationwide have been forming venture capital arms to commercialize innovations developed internally and to invest in technology and life-sciences companies that fit their mission. Among the venture capital units are Cleveland Clinic Innovations in Ohio, Kaiser Permanente Ventures in Oakland, California, and Mayo Clinic Ventures in Rochester, Minnesota.

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