Drug development | Biotech Strategy Blog

Innovation – should companies take bigger risks and outsource pharma R&D?

According to a forthcoming article published in Forbes, excerpts of which appear on Matthew Herper’s blog “The Medicine Show,” big pharma should take bigger risks and outsource R&D to smaller, innovative companies.

At least that’s the philosophy of Bernard Munos, the former Lilly sales executive who has focused on the innovation problems faced by the pharmaceutical industry. According to Forbes, he believes that big pharma should “cut research and development” and “rather than do research in house, companies should close their labs and outsource the work to tiny, nimble startups that can explore bigger, crazier ideas.”

However, as Munos goes on to say in an excerpt published by Matthew Herper:

“You cannot script innovation,” Munos says. “You cannot boil it down to a code of best practices. Because it is unpredictable and the opportunities in science do not match the opportunities in markets.”

That is why Munos’ strategy of outsourcing drug discovery may not be the right one – there is no formula that you can give a vendor on how to be innovative. Indeed, leveraging the innovation of small biotechnology companies is nothing new – isn’t that what big pharma already does with its licensing deals and alliances?

The question that comes to mind from the provocative Forbes article is whether innovation of drug development is a service like clinical trials that can be outsourced? Contract Research Organizations (CRO) are now the route by which the majority of companies conduct clinical research. They possess the efficiency and economies of scale to do what is a mundane, process driven task of setting-up, monitoring and processing data associated with a clinical trial on a global basis. Those models works reasonably well and are now the norm. Standard Operating Procedures (SOPs) exist for everything a CRO does in what is a heavily regulated process of gathering data for regulatory submissions.

Is this the same for drug discovery? I am not so sure. Firstly, if you outsource you have to give direction. You have to have a commercial or scientific target, and resources have to be allocated accordingly. Who decides where R&D investment should be spent? Ultimately in any outsourced venture, the company spending the money makes that decision. So all you are doing is shifting the execution of the task, not the development of the strategy, which is where the innovation needs to take place.

Indeed, if one looks at the clinical trial service model, what has happened is that consolidation of small and medium size CRO’s continues to take place. Small companies simply lack the resources to get the job done. I am not convinced that small is necessarily best when it comes to drug discovery.

What’s more, Munos, in the recent Science Translational Medicine (STM) commentary on innovation that he wrote with William Chin, appears to argue for a different model than the one he proposes in Forbes. He states that:

“pharmaceutical companies cannot mitigate risk adequately by pursuing “safe” incremental innovation, instead the industry should reengage in high risk discovery research on a broad scale and only take genuine breakthroughs to the clinic.”

This is easy to say in practice, and may not be a realistic strategy when there is money and sales to be made from me-too and follow-on compounds. How many companies are going to say we are not going to continue with this business model?

According to Munos in Science Translational Medicine (STM) the options open to big pharma are to:

Participate more decisively in collaborative networks
Form precompetitive consortia and other partnerships to share costs
Adopt new research models such as public-private partnerships

To me, there seems to be a disconnect between what Munos says in the Forbes article and what he says in his STM commentary. If he has a clear vision for the future of pharma innovation, he should at least be consistent.

Where I do agree with Munos is the conclusion of his STM commentary that success starts with breakthrough science. This message was also clearly stated at BIO 2011 by the panel on innovation that included GSK’s Moncef Slaoui.

Pharma R&D $ needs to be spent more wisely. In my opinion there is a role for incremental, as well as breakthrough, innovation. The two are not mutually exclusive.

Is cutting R&D and outsourcing discovery the route to success as Munos suggests in Forbes? Only time will tell as pharma R&D retools and refocuses for the future.

Munos, B., & Chin, W. (2011). How to Revive Breakthrough Innovation in the Pharmaceutical Industry Science Translational Medicine, 3 (89), 89-89 DOI: 10.1126/scitranslmed.3002273

Of Mice and Men

One of the themes of this blog is innovation in biopharmaceutical new product development. Innovation can take many forms ranging from nanotechnology based drug delivery to a novel scientific mechanism of action. The March 17, 2011 edition of Nature, highlights how innovative preclinical animal models are having an impact on drug development.

In their article on translational medicine, “Cancer lessons from mice to humans”, David Tuveson and Douglas Hanahan, describe how preclinical mouse models helped predict the recent phase III clinical trial results for sunitinib and everolimus in pancreatic neuorendocrine tumor (PNET).

The data was a major breakthrough for this disease. As Sally Church noted on Pharma Strategy Blog, sunitinib doubled the progression free survival (PFS) time and improved OS.

Tuveson and Hanahan in Nature note that “a vast number of potential anticancer drugs are currently in the pipelines of biopharmaceutical companies.” The challenge is not one of a shortage of candidates nor of potential targets, but in deciding which have most promise and where to spend valuable clinical development resources.

The authors conclude that there’s now optimism that genetically engineered mouse models may be able to mimic the progression of human cancer at the cellular and tissue levels. The mouse model of PNET (RIP-Tag2) successfully predicted that sunitinib and everolimus would be effective in treating humans.

Of course, not all human cancers can be modeled and adaptive resistance can subsequently occur in clinical trials, suggesting that preclinical models do have their limitations.

I hope we will see further innovation in mouse models of human cancer as translational medicine develops.

Tuveson, D., & Hanahan, D. (2011). Translational medicine: Cancer lessons from mice to humans Nature, 471 (7338), 316-317 DOI: 10.1038/471316a

Innovation in Nanotechnology will lead to improved drug delivery, diagnostics & imaging

Innovation in drug delivery presents opportunities for biotechnology companies, and is an area I expect we will see major leaps forward through nanotechnology.

Nanotechnology is the application of science and engineering to materials that are between 1 and 100 nanometers (nm) in size. The Environment Protection Agency (EPA) defines nanotechnology as “the creation and use of structures, devices, and systems that have novel properties and functions because of their small size.”

1nm is one-billionth of a meter. To put this in context, 1nm is one seven-thousandth of the width of a red blood cell or one eighty-thousandth of the width of a human hair. These are unimaginably small materials that are engineered to operate at the molecular and atomic level.

What’s more, there are now more than 1000+ consumer products on the market that utilize nanotechnology from the titanium particles in sunscreens to the silver contained in advanced first aid strips/plasters. Nanotechnology will impact more than $2.5 trillion of manufactured goods by 2015.

Lux Research predicts that by 2014, 16% of manufactured goods in healthcare and life sciences will include nanomaterials.

To date, the United States leads the way in the fast evolving field of nanotechnology. Between 2001 and 2010, the U.S. Government invested $12.4 billion in nanoscale science, engineering and technology through the U.S. National Nanotechnology Initiative (NNI).

The National Cancer Institute’s “NCI Alliance for Nanotechnology in Cancer” has an excellent website that outlines the potential impact of nanotechnology.

Some of the promising new cancer diagnostics and therapies based on nanotechnology include:

Positron Emission Tomography (PET) imaging agents that can be used to assess the responsiveness of tumors to chemotherapy
Chemically engineered adenovirus nanoparticle that stimulates the immune system. This is in phase 1 trials for chronic lymphocytic leukemia (CLL).
Cyclodextrin-based nanoparticle that encapsulates a small-interfering RNA (siRNA) agent that shuts down a key enzyme in cancer cells
CRLX101, a cyclodextrin-based polymer conjugated to camptothecin is in clinical trials with solid tumor patients
A nanoparticle based magnetic resonance imaging (MRI) contrast agent that binds to αvβ3-intregrin, a protein found on newly developed blood vessels associated with tumor development. This is in early clinical trials
Technology for the detection of cancer biomarkers such as prostate specific antigen (PSA)
Use of carbon nanotubes to improve colorectal cancer imaging.

Emerging companies such as Bind Biosciences are focusing on targeting cancer, inflammatory, cardiovascular diseases and infectious diseases with therapeutic nanoparticles. Their lead product BIND-014 is currently in phase 1 development.

Innovations in nanotechnology will continue to present new product opportunities for biotechnology, pharmaceutical, medical imaging and diagnostics companies, and should be on everyone’s radar.

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Is Orlando a future biotechnology region?

I’m off to a conference in Orlando today, so thought it might be interesting to follow-up on my previous post about the emerging medical device/biotechnology cluster around Austin, Texas to think about what’s happening in Central Florida.

Orlando is most well-known for Disney and theme parks, and major conferences (see my post on attending the ASH annual meeting in Orlando last year). However, the opening of a new medical school, children’s hospital and medical research institute will undoubtedly lead to biotechnology and biomedical companies considering start-ups in the surrounding area.

Florida, like Texas, offers no personal taxation and Orlando is also well connected for flight connections throughout the country.

Orlando, in my opinion, is further behind Austin, and to some degree all cities with a medical school, in it’s attempt to drive research and innovation. Whether Central Florida can establish a critical mass of companies and sufficient industry talent is the challenge, especially as multiple regions across the United States are also competing for biotechnology $.

However, even if Orlando does not become a major biotechnology cluster, it is more likely to become a major center for clinical and biomedical research.

In April 2009, the La Jolla based Sanford-Burnham Medical Research Institute opened a new research facility at Lake Nona in Orlando. It is home to 900 scientists undertaking R&D on drug discovery, stem cells, nanomedicine and translational research.

One of research areas it is focusing on is diabetes and obesity, or diabesity as it is rapidly becoming known, an area that is rapidly reaching pandemic proportions in the United States. A symposium on Frontiers in Biomedical Science: Metabolic Networks and Disease Signatures will be held on March 11.

Luke Timmerman’s post on Xconomy about the Institute and the $50M gift it received last year to change its name is well worth a read. In another post, he also raises the question of whether biotechnology companies can make money going after diabesity, notwithstanding the market opportunity? Need and market opportunity don’t always translate into valid targets for drug development, especially when many of the issues to do with diabetes and obesity relate to lifestyle and food content.

The Sanford-Burnham Medical Research Institute is the cornerstone of a cluster of bio-medical research companies and healthcare institutions, including the M.D. Anderson Orlando Cancer Research Institute, the new University of Central Florida (UCF) College of Medicine that opened in 2009, and Nemours Children’s Hospital that will open in 2012.

I think it will take several years before we can see if a significant biotechnology cluster grows up around these research and medical institutions. Whether Central Florida and Orlando can grow into a leading biotechnology region remains to be seen.

Aß40 Oligomers are a potential biomarker for diagnosis of Alzheimer’s before amyloid plaque develops

By Pieter Droppert on January 25, 2011

Following on from yesterday’s blog post about Lilly’s florebetapir, a recent paper published in PLoS One (open access) describes how Aß40 Oligomers have potential as a biomarker for Alzheimer’s disease (AD), prior to the development of amyloid plaque.

Thanks to BayBio for giving me the idea for this post when they mentioned it in their news about member & partner, Novartis Vaccines and Diagnostics in Emeryville, CA.

Alzheimer’s disease is an important target therapeutic area for the biotechnology industry. According to the Alzheimer’s Association, one in eight people aged 65 and older in the United States have Alzheimer’s disease (5.1 million). By 2030, the prevalence will have increased by approximately 50%, when an estimated 7.7 million will have the disease.

Neurodegenerative diseases place a large burden on the healthcare system and caregivers. There is a major unmet need for effective treatments that will either delay the onset of Alzheimer’s or slow down the rate of disease progression.

In their paper, Gao et al describe how using the knowledge that soluble Aß oligomers play an important role in the pathogenesis of AD, they were able to use a Misfolded Protein Assay (MPA) to capture Aß in the cerebrospinal fluid (CSF) of AD patients. Their results suggest that Aß40 oligomers are a novel biomarker for the early diagnosis of AD.

What I found interesting is that Aß40 oligomers were found in late-stage AD patients with low clinical Mini-Mental State Examination (MMSE) scores as well as those with early stage AD and higher MMSE scores. (p<0.01 between normal and all AD groups).

These results based on data from 26 patients clinically diagnosed with AD need to be viewed with caution since they are very early stage, but there is sufficient promise for future clinical trials. A CSF test based on Aß40 oligomers could potentially pick up early-stage AD disease before it has progressed to the point where a clinically significant level of amyloid beta plaque (evidencing neuronal loss) appears in the brain.

Novel biomarkers could play an important role in drug development by biotechnology companies, allowing disease progression to be monitored. It will be interesting to see whether this research on Aß40 oligomers from Novartis Vaccines and Diagnostics, ends up being confirmed as a valid biomarker.

Innovation in Healthcare Symposium

By Pieter Droppert on January 12, 2011

A conference on Innovation in Healthcare is being held in Cambridge, MA on Tuesday, February 1, 2011.

The speaker list is impressive and includes Michael Porter (Porter’s 5 forces model is well known to all MBA students), John Mendelsohn (President of MD Anderson), Janet Woodcock (Director of Center for Drug Evaluation and Research at FDA) and Peter Senge (author of the Fifth Discipline: The art and practice of the learning organization).

The symposium, whose lead sponsor is Merrimack Pharmaceuticals, will discuss how to to improve the system for delivering healthcare services, and how to increase the productivity of translating biomedical research into medical innovation. The conference certainly has ambitious goals in the topics it plans to cover!

Innovation to me is about adding value, whether that be in the delivery of a service or the development of a new product by a biotechnology company. If you are in the Boston area on February 1, this one day symposium at MIT looks well worth attending, and the registration fee is inexpensive ($50).

Vertex plans NDA for VX-770 in Cystic Fibrosis for Second Half of 2011

By Pieter Droppert on January 10, 2011

As an update to this morning’s blog post that mentioned Vertex’s VX-770, the company have just announced their key business objectives for 2011. Further information will be included in the presentation by Vertex at the JP Morgan Healthcare conference scheduled for later today.

The news in Cystic Fibrosis is that if the phase 3 clinical trial data is positive the NDA for VX-770 is expected in the second half of 2011. The following are the relevant sections from the press release:

Cystic Fibrosis: Phase 3 Registration Program for VX-770 Nears Completion

VX-770 NDA Submission Planned for Second Half of 2011

Three trials of the novel cystic fibrosis transmembrane conductance regulator protein (CFTR) potentiator VX-770 are fully enrolled and ongoing as part of a global Phase 3 registration program focused on patients with the G551D mutation. The G551D mutation is present in approximately four percent of people with CF.
The first Phase 3 data for VX-770 are expected in the first quarter of 2011 and will come from the Phase 3 STRIVE trial in people aged 12 and older with at least one copy of the G551D mutation. Data from the Phase 2 DISCOVER trial, which was primarily a safety study that enrolled people aged 12 and older with two copies of the F508del mutation, are also expected in the first quarter of 2011.
Data from the Phase 3 ENVISION trial in people aged six to 11 with at least one copy of the G551D mutation are expected in mid-2011.
If positive, the results from the Phase 3 program for VX-770 could support the submission of an NDA for VX-770 in the second half of 2011.

In addition, Vertex announced that they expected interim data in the first half of 2011 from the phase 2 trial that combines VX-770 with VX-809:

Combination of Two CFTR Modulators for the Treatment of People with the Most Common Mutation of Cystic Fibrosis

Vertex is conducting a Phase 2a clinical trial to evaluate multiple combination regimens of its lead CFTR Modulators – VX-770, a CFTR potentiator, and VX-809, a CFTR corrector – in people with the most common mutation of CF, known as F508del. Enrollment is ongoing in Part One of the trial, which is designed to evaluate VX-809 (200 mg), or placebo, dosed alone for 14 days and in combination with VX-770 (150 mg or 250 mg), or placebo, for 7 days. Vertex expects to obtain interim data from Part One of the trial in the first half of 2011.

2011 looks to be an interesting year for Cystic Fibrosis and it is certainly positive to see biotechnology companies such as Vertex developing new products for this debilitating illness.

Lilly completes acquisition of Avid Radiopharmaceuticals

A company I have been watching for a while is Philadelphia based Avid Radiopharmaceuticals, now a wholly owned subsidiary of Lilly. They have a novel imaging biomarker, florebetapir (18F-AV-45) in development for the detection of Alzheimer’s disease.

In a press release last week, Lilly announced that the FDA had assigned a priority review to the marketing application of florebetapir. The Peripheral and Central Nervous System Drugs Advisory Committee of the FDA meet on January 20, 2011.

Bayer have a competitor product in development, forebetapen (BAY 94-9172). Both florebetapir and florebetapen are ¹⁸F radiolabelled imaging biomarkers that bind to amyloid plaque in the brain. When used in conjunction with a Positron Emission Tomography (PET) scan, they enable the accumulation of amyloid that occurs in Alzhemeir’s disease to be visualized.

Phase 3 trial results for florebetapir published earlier this year showed that the brain amyloid burden seen in the PET scans positively correlated with the plaques seen in autoposies of the same patients. Proof that what the imaging biomarker shows is an accurate representation of the underlying pathology.

What makes the use of florebetapen and florebetapir interesting is that it is already common practice to use imaging tracers with PET scans. Fluorodeoxyyglucose (FDG) is widely used in the diagnosis, staging and treatment of oncology patients as a result of its ability to show the intense glucose uptake that occurs with most cancers.

Both Avid and Bayer products are most likely to be approved based on the clinical data presented to date. It will be interesting to see the prices that they intend to charge.

As for the market opportunity, they are likely to have a role to play in the early diagnosis of patients with mild cognitive impairment, since at present it is difficult to diagnose these patients and differentiate Alzheimer’s disease from other forms of dementia. Most likely, models will be developed that look for a correlation between accumulation of amyloid plaque and decline in cognitive function, from which a probability of developing Alzheimer’s disease can be calculated.

Imaging biomarkers are likely to place an increasingly important role in the development of new products by biotechnology companies and in the design of clinical trial endpoints.

Targeting BAP1 – a future targeted therapy for Uveal Melanoma?

Uveal melanoma is a common cancer of the eye that involves the iris, ciliary body and choroid. It is a disease that hits 2000 people per year in the United States and is common in those over 50. Standard treatment involves removal of the eye or radiotherapy. There is an unmet need for systemic drug therapy.

Mutations in the BRAF gene (a member of the Raf family that encodes a serine/threonine protein kinase) have been found in many skin melanomas. In 80% of the cases, a single point mutation in exon 15 (T1799A) has been shown to occur. Some new agents in development such as PLX4032, ipilumumab, GSK2118436 have shown promise in advanced skin melanoma, but research suggests that BRAF may not be the key to Uveal melanoma.

Henriquez et al, in a paper published in Investigative Ophthalmology & Visual Science showed that the T1799A BRAF mutation was only present in 9 of 19 iris melanoma tissue samples, but only in one case of uveal melanoma, suggesting differences in the genetic and clinical differences between the two.

Recently, two papers have been published that provide new insight into this intraocular cancer. In the December 2, 2010 issue of the New England Journal of Medicine, Van Raamsdonk et al, found mutations of either the GNAQ or GNA11 gene to be present in 83% of uveal melanomas that were sequenced (n=713).

Harbour et al, in the December 3, 2010 issue of Science reported findings of a frequent mutation of BAP1 in metastasizing uveal melanomas. They found that in 26 of 31 (84%) of uveal melanoma tumors they examined, there was a mutation of BAP1, the gene encoding BRCA1 associated protein 1 (BAP1) on chromose 3p21.1. The results published in Science, “implicate loss of BAP1 in uveal melanoma metastasis and suggest that BAP1 pathway may be a valuable therapeutic target.”

The data suggests that there may be multiple pathways involved in uveal melanoma. It is promising to see translational medicine in action, with scientists seeking to understand the molecular basis of a disease so that targeted therapies can be developed. Uveal melanoma only strikes a relatively small number of patients, but if a highly effective drug can be developed, this could be a market opportunity worth pursuing.

Big pharma needs to continue to do its own R&D

By Pieter Droppert on February 24, 2010

Although the market for biotech IPOs is opening, capital constraints remain a key issue for biotech companies. Recent years have proven difficult with limited access to financing, and venture capital in particular has been virtually non-existent. Biotech companies with limited resources have focused on core development activities.

This has resulted in delayed development of pipeline products and is likely to have a future impact on the availability of new drugs for licensing and acquisition by big pharma. One of the consequences is that big pharma cannot rely on biotechnology companies to be the sole source of new products to keep their portfolio's stocked. They will have to continue to invest in their own R&D, however inefficient this may be. However, the trend of big pharma is to outsource and divest R&D as evidenced by the recent layoffs at AstraZeneca and GSK, and the loss of R&D facilities post-merger at Wyeth/Pfizer. The current strategy of big pharma is only likely to exacerbate their pipeline shortages in the face of the generic cliff many companies are facing.

Additionally, as reported earlier this week in the FT, the benefit to pharmaceutical companies of investing in their own R&D is that early stage development is cheap compared to the high cost of buying developed research. Late stage products come at a price premium reflecting their lower risk.

An example of this is the $1.2B licensing and development deal that AstraZeneca did last week with Rigel Pharmaceuticals (Nasdaq: RIGL) for their rheumatoid arthritis drug, fostamatinib disodium (R788). The Pharma Strategy Blog has further insight on this.

Big pharma cannot rely on outsourcing and biotech for all their new drug development and need to invest in their own R&D.

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Posts tagged ‘Drug development’