BOSTON Pharmaceutical companies and, to some extent, big biotechs, could claim they're victims of their own success, according to Doug Cole, general partner of Flagship Ventures, speaking at the BioPharm America 2012 conference in Boston.
In 1995, 60 percent of prescriptions written in the U.S. were for branded drugs and 40 percent for generics. That ratio has flipped with a vengeance; generics now represent 70 percent of scripts and branded drugs only 30 percent.
But even if reimbursement for new drugs was still generous, or actually assured, most would agree that the existing drug development model is broken, Cole suggested, resulting in roiling inefficiencies in clinical trials, a plethora of late-stage failures and ballooning costs.
With stakeholders ranging from big pharmas and biotechs to specialty biopharmas and start-ups not to mention contract research organizations, academic institutions, investors, regulators, consumer advocates and the public at-large there's plenty of blame to go around.
"The goals and roles of each of these parties overlap to some extent," Cole pointed out. But they often clash, as well, and sometimes expectations "are totally based on wishful thinking," he added.
Long story short, the well-defined roles of the past when academics invented technologies, biotechs pursued opportunities with large molecules and big pharma went after big diseases have evaporated, yet the players are still searching for the elusive "new paradigm" in drug development. "We're in a state of great flux," Cole observed.
What's clear, he added, is that most pharmas now have biologics and many biotechs are pursuing small molecules. Do those shifting roles muddy the waters of drug development or lay the foundation for a more efficient, cost-effective process?
Epizyme Inc. is one biotech that isn't complaining about the new world order. The Cambridge, Mass.-based firm exploited the explosion in cancer genome sequencing activity to create successful epigenetics partnerships with GlaxoSmithKline plc, of London, Japan's Eisai Co. Ltd. and, most recently, Celgene Corp., of Summit, N.J. The Celgene deal netted Epizyme $90 million up front, at least $160 million in potential milestone payments per compound and double-digit royalties. (See BioWorld Today, April 26, 2012.)
In four years, Epizyme has taken "a green field opportunity," using assays licensed from an academic institution, and progressed lead compound EPZ-5676, a small-molecule histone methyltransferase inhibitor, into clinical trials. All told, the company attracted $135 million in nondilutive funding before it moved its first compound into the clinic.
"We're very enthusiastic about not only the future of epigenetics but also the role that small companies like ours play in this ecosystem," said Robert Gould, Epizyme's president and CEO.
Michael Poole, vice president of the newly formed innovative medicines unit for neuroscience at AstraZeneca plc, of London, said the division contains no wet labs and "enhances partnerships with academia, small biotech, venture capital and large pharma. We're working on a new way to do drug discovery."
That "experiment," which could eventually be expanded to other therapeutic areas, grew out of the sobering realization that AstraZeneca's enormous financial commitment to neuroscience resulted in no commercial drug discoveries in the space for more than a decade.
"AstraZeneca gave very serious consideration to getting out of neuroscience altogether," Poole admitted. Instead, the company decided to pursue a new approach. "Neuroscience is really a collection of boutique disorders," he pointed out. "We don't treat those very well, and there's a lot of new science that can be delivered to patients."
Align Interests When Striking Deals
Takeda Pharmaceuticals Ltd., of Osaka, Japan, has positioned itself as a global player through a series of acquisitions, including Millennium Pharmaceuticals Inc., of Cambridge, Mass., in 2008 for $8.8 billion, and Nycomed GmbH, last year for $13.7 billion. That deal more than doubled Takeda's reach, to 70 countries. (See BioWorld Today, April 11, 2008, and May 20, 2011.)
However, Takeda is not averse to launching projects internally, observed Terry Porter, vice president of search and evaluation for global business development. In December 2011, the company established a global vaccines business unit to oversee development of pediatric vaccines in-house and to in-license new technologies.
All told, more than half of Takeda's late-stage pipeline is partnered, Porter added.
"We're fully committed to the global value chain through discovery, through development and through manufacturing and commercialization," he said.
Similarly, Shire plc, of Dublin, Ireland, has grown largely through acquisition and now encompasses three business units: specialty pharma, regenerative medicine and human genetic therapies (HGT).
"We're moving into new areas, and we're growing," said Philip Vickers, global head of R&D for Shire HGT. "That growth allows us to have opportunities to build an organization as we see the need, going forward."
Whether pharma or biotech, partnering is the tool to bridge the drug development divide, BioPharm America panelists agreed. The deals can be large or small, as long as they work for both partners.
For instance, AstraZeneca had a "well-functioning, healthy" history of scientific collaboration and commercial co-development with erstwhile competitor Bristol-Myers Squibb Co., of New York, prior to this year's $7 billion combo deal for Amylin Pharmaceuticals Inc., of San Diego, according to Poole. (See BioWorld Today, July 3, 2012.)
"The deal with Amylin was a way to extend that relationship and get AstraZeneca into an area of therapeutics for diabetes that's novel and important," Poole said. The challenges facing diabetes developers can't be solved by a single company, he added.
Partnering can't be accomplished in a haphazard manner, however, Vickers stressed. Shire seeks assets that complement its core R&D strengths. Although the company continues to evaluate acquisitions and in-licensing deals, "we're moving away from being a vertically integrated pharmaceutical company and breaking the mold a little bit," he said. That outlook opens the door to new partnering structures that involve shared costs and risks as well as the seeding of small, virtual biotechs, Vickers said.