CHALLENGES ASSOCIATED WITH THE VALLEY OF DEATH

A Pitfall in Drug Discovery

3.3 CHALLENGES ASSOCIATED WITH THE VALLEY OF DEATH

3.3.1 Organization Proportions and Impact in Drug Discovery

Organization size and capacity have an inverse relationship with their ability to adapt to change. Large multinational biopharmaceutical companies have problems of scale. Their major strength is financial and human resources, but at the other end of the spectrum, the culture of management hierarchies, meetings, commitments, and some competition over resources sometimes

deter effectiveness. In the modern era of large-scale “-omic” discoveries based on genomes or protein profiles from whole organisms, pharmaceu- tical companies that specialize in these endeavors cannot keep up [8]. In contrast, the smaller companies, particularly the biotechs, are much less populated and have a trimmer organizational structure. These downsized companies are usually staffed with creative people that are closer to address- ing the problem. They adapt better, are flexible, and can quickly respond to a changing environment. This close-knit interactive framework permits a closer and faster approach to tackling problems. In this regard, the big pharmas are changing the organization structure, breaking into smaller units with particular specialty to create a “masterpiece” that stems from a divided network rather than a whole. One example is the Centers of Excellence Drug Discovery, which was created by GSK, and which has the autonomy to focus on specific therapeutic areas within the company. It has further been subdivided into smaller discovery performance units, much similar to the biotech companies operating the similar business models. This is one way of combating the issue of low productivity.

However, few firms can afford to undertake extensive and exhaustive research; they lack the breadth and depth of knowledge needed to create new drugs. This is the major roadblock of small firms or biotechnology industries. Partnerships have been sought for R&D outsourcing that drive better outputs and productivity.

3.3.2 Vulnerability of Biotech and Small Companies

Early drug development is a daunting task as it requires constant adaptation to undesirable changes in such environments [9]. The most common difficulties are experienced at seed and start-up stages of R&D when the investment risk is high, which deters potential investors that are risk averse – the fear of lack of profitability [10]. Early discovery activities that focus on disease targets are understood through various disciplines such as biochem- istry, microbiology, physiology, pathology, as well as observational studies of health interventions, etc. These are only pivotal and with no immediate commercial value and hence not attractive to the big pharma and private investors. Since prediscovery and discovery research are highly explorative, large companies are more likely to focus on late stage technologies. Frag- mentation of industries is the consequence of this, leading to the surrender of discovery research by the big pharmas in an attempt to concentrate on clinical trials and marketing that relies on their well-established distribu- tion channels. The larger companies have stronger financial stability against

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high risk projects, and a wider and more comprehensive range of studies, with better and sounder mechanisms, resources, and experience.

Focusing on the early stages of drug development makes it impossible to project a future outcome as far as 10 years ahead as the seeds of actions are not harvested until years later. And pipeline delay could reach 7 years, fur- ther hindering investment potentials by venture capitalists. Early discovery projects are most often taken by the smaller or biotech companies. These are mostly selected from within novel therapeutic areas or indications and involve building the product scope and operating in unexplored and un- proven categories. For a start-up company that has not demonstrated its marketing experience, the prospect of higher financial success would be a base consideration for undertaking high risk projects of such kind [11,12].

Even though the small companies are susceptible to higher risks, they hold greater growth opportunities associated with undertaking a novel drug development project. The potential for high financial rewards depends on the therapeutic areas of interest. A predominant chronic disease would be well recognized and highly rated. Some examples especially are the chronic indications like cancer, inflammation, or cardiovascular disease. However, if diagnosis is rare or slightly improved over already existing drugs, this is less predictable. Rating the size of a potential market might not be very clear and depends on a lot of factors as mentioned earlier. Major pharmaceuti- cal companies establish several drugs in the pipeline even though some are more valued than others, in order to spread the risks [13,14]. With estab- lished products in sales, these companies are more immune to losses since a portion of sales funds R&D. Estimates from a product in sales are used to determine the weight of the market share it gains, cost, and effectiveness in relation to its competitors.

3.3.3 Key Research Activities in the Stage of Lowest Funding

Translational science mainly plays the role of transforming activity into clinical effectiveness by refining the pharmaceutical properties, determining the preclinical toxicology, and optimizing. The translation of basic biological discoveries into clinically viable applications involves acquiring in-depth understanding of the pathogenesis of a disease prior to finding the target and cognate active compound with optimized properties. Once the target has been identified, developed assays would be used to evaluate pharma- cological effectiveness, assay quality, reproducibility, selectivity, specificity, solubility, permeability, and metabolic stability. Bursts of huge data are screened out using high throughput screening technologies to filter out lots

of targets at this stage to potentially eliminate unexpected failures due to unpredictable factors, such as toxicological findings in later studies.

The effect of such a rigorous process at an early stage is to achieve greater awareness. It takes several years to accomplish this. Once validated, the transforming drug modulator molecules progress into high-content lead series. A hit molecule that satisfies preclinical candidacy would have the desirable properties that lead to a clinical assessment of the data in the human population in clinical trials. This is crucial information that could be further formulated into safe doses in patients, establishing pharmacokinetic (PK)/pharmacodynamic (PD) modeling and clinical PoC, and full clinical development. These are key activities in modern drug discovery. The decisions or information garnered in this process determine the fate of the drug discovery program and is the premise for the com- panies’ early project-portfolio management strategy, success, and failure.

These activities are not strictly government sponsored and seek other in- vestment strategies that rely on the effectiveness and therapeutic promise of these pipeline activities in order to attract funding.

3.3.4 Unpredictability of Pharmaceutical Innovation Science

In the pharmaceutical industry, most of the proposed research projects are based on speculative research ideas and are initially high risk. There is no guarantee of success once a candidate reaches the development pipeline;

success is mostly a matter of probability until it progresses toward the late stage research when a proof of biological efficacy has been established (Figure 3.2).

More than 70% of observed innovation failures in Phase II are technical risks and the rest are nontechnical, which are mostly strategic and commer- cial. The technical risks encountered throughout the discovery pipeline cor- relate with the ability to achieve optimal chemical druggability or an ability of a drug molecule to modulate a drug target, which satisfies the physical, chemical, and biological properties of a desired drug. A typical technical challenge would be a target approach that complements high throughput screening for structure–activity correlations that might not meet the criteria for clinical efficacy. Some highly frequent technical problems in drug dis- covery are: the multifactorial chronic diseases that could not be approached with only a single target due to extensive and complicated biological net- works; animal models that do not exactly translate to humans; and adverse events or toxicity that could surface with chronic use – a fact that could not be detected during clinical trials. These aspects are considered in parallel

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with the societal, marketing, and business needs in order to be deemed competitive and attract investment opportunities [15].

3.3.5 Academic Discovery and Research Limitations

In the drug discovery cycle, academic professionals build the hypothesis, gather evidence, and generate the molecular prototypes for further devel- opment. Their interest lies in scholarly publications that render the op- portunity for professional growth as opposed to locking up the wealth of knowledge in silos pending the seemingly unending duration of the drug discovery program. Publications of stepwise findings that underpin Na- tional Institutes of Health (NIH) grant consideration is a high preference since academic accomplishment has been measured based on frequency of scholarly publications and impact [16]. This has compromised growth in translational research and has been considered a deviation from the industry based performance metrics which consider invention disclosures, patents and licenses.

Figure 3.2 The Path of Cash Flow Through the “Valley of Death,” Showing the Most Prominent Funding Organizations and Stage in Drug Development. RAID, rapid access to interventional development; SBIR, small business innovative research; RAPID, rapid access to preventive intervention development; STTR, small business technology transfer. Source: Ref. [3].

In general, research techniques differ to some extent when compared to that of the industry. For example, academia would use a less stringent format as opposed to the strict reproducibility considerations, as opposed to the use of high throughput screens that is the hallmark of early stage drug discovery in the industry. Academic drug discovery programs lack the technical and scientific capability to further the development of molecules to therapeutic leads due to lack of the required facilities that meet the industrial standard.

The expertise and available resources are critically lacking.

3.3.6 Target Selection

The greatest pitfall in drug development is upstream experimental oversight due to misguided target selection affecting all the development processes [17,18]. The initial difficulty encountered in discovery research is multiplic- ity of biological functions or mechanisms of a potential drug target that could further lead to toxicity in model organisms and humans. Poor target selection results in poor therapeutic outcomes, costs, or fund expenditure and competitiveness. The patient population versus health care provider’s willingness to pay for a course of treatment determines the extent of rev- enue recovered over the commercial lifetime of a drug and depends on its competitiveness or therapeutic success. However, finding the right target and clinical efficacy for a named indication has been a major hurdle, lead- ing to economic failure due to fewer drugs or poor performance of drugs reaching the market and also leading to a bias over drugs that show exclu- sive financial success [19–21].

3.3.6.1 A Case for Alzheimer’s Disease

The number of cases Alzheimer’s in USA is over 5 million; thus, market size in an affluent country is important. If every one of those patients was given a drug at $5000 per year, this would produce $25,000 billion, which is a remarkable return. If the health care providers, which are the governments and managed care organizations, are willing to pay for new medicines to support R&D efforts, it is because it costs governments 10 times more in hospital cases and they would rather direct some funding to R&D.

Higher prices for drugs tend to be balanced by savings in the health care system, which has worked out strategies to promote less hospitalization and an improved quality of life. Cost–benefit considerations or valuations are performed by the commercial departments of biopharmaceutical companies, governments and academic departments that are committed to the maximization of value for every money spent.

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3.4 FIRMS INVOLVED IN THE PHARMACEUTICAL