A Pitfall in Drug Discovery
3.5 STRATEGIES FOR BRIDGING THE VALLEY OF DEATH AND INNOVATION FAILURE
3.5.1 The Changing Drug Discovery Landscape
With rising drug discovery cost and increasing demand for new and im- proved forms of health care, the industry has been exploring avenues to achieve optimal value from R&D budgets to boost productivity. Pharm R&D is taking a more holistic approach to drug development with extensive
Table 3.1 Example of contract research services [25]
Biology services
Chemistry services
Screening services
Lead optimization services
Protein structural analysis Determining
protein–protein interactions Functional
genomics
Providing building blocks Compound
synthesis and purification Process research Bioinformatics
Assay
development Secondary
screening Library design
Early absorption distribution metabolism excretion/
toxicity Compound
analogs and structure–activity relationships
Social Aspects of Drug Discovery, Development and Commercialization 68
information sharing, reforming of business models, introducing new port- folio management solutions, vertical and horizontal integration and expan- sion, incremental adaptation of the pharmaceutical quality system, project management, and communication of science.
3.5.2 Product Forecasting
Product forecasting refers to predicting the degree of success of the new drug product in the marketplace. It determines product awareness, distribu- tion, price, ability to fulfill unmet needs, and competitive alternatives. In the early stage of drug discovery, a foreknowledge of attributes of the drug compound is essential in order to understand the marketing prospects of the drug product. This helps to allocate capital prudently, by targeting diseases and drugs with a high prospect of reimbursement.
The narrowing of the chance that discovery will focus attention on areas of interest to development can be addressed through the use of the target product profile (TPP). The application of TPP is critical in valuing the future of a drug in the development process. Key information is the definition of disease and diagnosis, incidence of disease, patient types and characteristics; disease and patient segments and how they will be identi- fied in clinical practice; market size, structure, and dynamics; and trends and barriers. Identifying potential drug candidates would entail consult- ing the clinicians to gain insights into new products that their originator lacks. Academic physicians’ experts, with their wealth of knowledge of both disease and patients, could facilitate drug positioning mainly through the privilege of access to new classes of pharmaceutical agents during very early clinical development. This helps the drug developer to see how a new clinical utility could open new markets. Understanding the unmet medical needs and therapeutic competitiveness offers meaningful advan- tage over alternative or existing treatments for the same condition. The attributes include target population, dosage form, and safety and efficacy over the existing treatments; toxicity, contraindications, stability, and more.
These attributes are to be well reflected in the project design at an early stage. Knowing that new projects in development are often characterized as “high risk,” well-executed product forecast and commitment to low- cost development, marketing and risk handling preparedness increases the PoS of the pharmaceutical firm. The validity of technical data in support of the TPP establishes competitiveness and a well-differentiated product for market success.
3.5.3 Investment in the Discovery Science
Focus is increasingly being shifted to the rudimentary aspect of drug discov- ery, the early discovery research, which is essential to pipeline progression.
There is increasing vertical integration to enhance capabilities across the pharmaceutical value chain. Robust biological/biomedical research would require strengthening of the key partnering disciplines (chemistry, chemi- cal biology, systems modeling, etc.) to ensure that the biological targets selected have the best chance of delivering successful PoC studies. These areas are being further reinforced by incorporating technically adept pro- fessionals who have in-depth understanding of disease, animal and in vitro testing capabilities, and relationships with experience. Also knowledgeable and experienced medicinal chemists are increasingly being engaged with academic centers of drug discovery to support development of sound and quality drug candidates by the academic laboratories and to help abrogate the innovation attrition factors.
3.5.4 Advancing Corporate Productivity: Partnerships
3.5.4.1 Big Pharma – Early Stage/Biotech Company Partnerships Industry partnerships or collaborations have become an important reve- nue stream for early stage and small biotech companies, which is acquired through licensing, marketing deals, or collaborations on discovery stage or preclinical projects requiring joint research efforts with big pharma [27].This has the potential to address lapses in R&D through strengthening the internal capabilities to provide access to expertise in R&D, making it more efficient and cost-effective. Even though it is not the only requirement in achieving the ultimate market success, collaborations have contributed to superior performance of most firms. Even though the biotech companies do not possess as many overarching business capabilities as the big pharma, they have ideas, unique abilities about the project that could adequately complement these areas of underachievement, as in the case of big pharma.
They offer the advantage of shared risks, pooling of knowledge, resources and expertise, expansion of capabilities and spreading out tools for produc- tivity and cost miniaturization, accelerating project progression, and bet- ter and more efficient technology utilization [28]. To satisfy these needs, big pharma has increasingly engaged in developing relationships with early stage/biotech companies to spread the risk and the options that permit technology accessibility and more opportunities. For example, in Phar- maceutical Shared-Risk programs, Eli Lilly rejected the old model of full
Social Aspects of Drug Discovery, Development and Commercialization 70
company integration to a “fully integrated network” model that leverages the expertise of multiple sectors (academia, government research institutes), to reduce costs and increase the probability of success (PoS) and risk sharing to create new avenues for academic and nonprofit funding.
For merged companies, properly allocating functions and granting each partner adequate independence creates more flexibility and room to en- hance performance. It grants the participants an opportunity for growth and high performance standards. For example, Roche, as the leading owner of Genentech, allows such flexibility, which has appreciably played out in terms of both innovation and profits. Individual inventors and academic researchers can work synergistically to cultivate unexplored knowledge for the benefit of all. Biotech companies now generate revenues from a mile- stone and royalty-based model to turn over development of assets as a form of alliance. This is a way of early outsourcing of revenue to build and sustain the company [28]. The royalties are attractive because the technical and nontechnical risks are shared with the collaboration partner. Both parties split the values of the project combining their capabilities, which are instru- mental for growth particularly since potential investors are being repelled by the uncertainty of a drug still in development.
The pharmaceutical industries and biotech companies that focus on R&D engage in target validation using the in-house chemical and biologi- cal knowledge base. More than 1000 partnerships have been formed be- tween 1993 and 2000 [29,30]. Many spinouts from publicly funded health research at universities are providing high-quality science and innovation within their firms to help attract pharmaceutical multinational enterprises (MNEs), investors, venture capitalists, and other funders.
Merck and the Vaccine and Gene Therapy Institute of Florida are col- laboration partners who discover and validate targets for HIV therapy and also biomarkers for efficacy. The California Institute for Biomedical Re- search is a nonprofit organization collaborating with academics around the globe. It was sponsored by Merck with a $90 million plan over 7 years [31].
3.5.4.2 Industry–Academic Partnerships
Translating upstream research into product requires a well-established col- laboration between academics and industries. Through these partnerships, professionals at the academic institutions with unique skills in assay design for target identification tap into the extensive database and libraries of po- tentially therapeutic molecules provided by the pharmaceutical companies.
Also, experienced medicinal chemists from the research laboratories in the
academic sector work jointly with pharmaceutical industry experts who are more inclined to development, risk, and marketing strategies.
In the United States, the landmark legislation, the Bayh-Dole Act, pro- motes partnerships while strengthening the path of advancing basic research to commercialization. Government intervention in drug discovery R&D was a roadmap to enable the promising research discoveries of academic investigators and business people with proven intellectual abilities and in- novative ideas in creating new medicines. The government provides the infrastructure and funds to harness the intellectual resources for the public good. The partnering centers have a mutual interest, which is critical to ensuring a robust national research capacity. Academic principal investiga- tors, postdocs, and Pfizer scientists work jointly on research projects within the Centers for Therapeutic Innovation laboratory and also in the academic laboratories. This facilitates the transfer of tacit knowledge and enables the inventor team and the licensee to better synchronize their commercializa- tion efforts. The scope of research spans from PoC, the translational research leading to over 300 million investments through 5 years [32]. Collaboration between clinicians and drug discovery groups is expected to address the cost, timescale, and risk associated with clinical PoC studies to increase the PoS.
These enable the building of a more flourishing environment to the inves- tor community. Adequate consultation with the respective persons would promote well-informed commercial decisions, market identification, com- mercial skills, and access to pilot and demonstration facilities.
3.5.5 Communication
Research capabilities would become redundant without efficient commu- nication across the drug development groups. Poor coordination among the research centers leaves gaps in productivity due to lapses in output [33,34].
Thus, early communication across the sectors, including regulatory authorities, funders, industry, academia, and investors, is an ongoing endeavor, intended to facilitate an understanding of the proposed strategies prior to investments in the drug development projects. Insurance claims data help to improve the efficiency of delivering drugs, tailored to the patient at the right time.
Early communications pertaining to standards for drug reimbursement have advanced drug design and clinical studies. Incorporating the necessary clinical parameters and disease-specific knowledge for the purposes of commercial- ization and reimbursement that are understood and transparent is essential so that research and clinical efforts can be targeted toward the expected end.
Beginning with the end in mind is always an important consideration.
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External and internal cross-functional communication boosts innova- tion and would leverage the best minds across the world to enable a better handling of grave issues encountered in research. Large scale information sharing helps to break technological impasse [35]. Open source has been established to enable drug developers to pool highly priced and valued information gathered from top class experts, which is published under a public license at no cost as a way of sharing pivotal ideas that boost phar- maceutical R&D. The shared information is open source, delivered in an incremental, cumulative manner across companies, institutions, areas of expertise, and platforms of research for nonprofit use by all.
3.5.6 Importance of the Biotechnology Incubators
Biotechnology incubators provide financial and managerial support to entrepreneurs and early stage start-up companies. This is achieved with consulting companies and institutional investors, venture capitalists, and business angels. The incubation of technology-based start-up ventures is based on R&D projects. Due to increasing problems associated with high risk product portfolios, potential markets, and team development, biotechnology incubators have been differentiated by the scope, objectives, and business models. The incubators expedite business development through supplying start-up risk capital to help reduce cost, time, and early stage risks in development. For example, the Taube-Koret Center (TKC) functions as a nonprofit biotechnology incubator [36]. Promising therapeutic solutions on Huntington’s disease, as well as Alzheimer’s disease, Parkinson’s disease, and more, were achieved through the effort of the Koret Foundation and Taube Philanthropies. TKC operates in the same way as a biotechnology company and simulates an industry environment, providing the academic institutions the opportunity to move their discoveries [37].
3.5.7 Addressing Investment Limitations
Increase of investment of public funds has provided a pathway to derisk- ing projects that can attract the investors to release more funds. Derisking the proposition to investors has been done by introducing cofinancing measures, tax incentives for investment that support seed and early stage discovery projects, collaboration on R&D projects, and research clus- ters together with academic institutions. Tax-based incentives to private investors offer seed and start-up funds. Increased public funding for public/private partnerships has been achieved through programmers like
US Enterprise Development programs that promote linkages and part- nerships between investors and entrepreneurs. There is also public funding in areas in dire medical need. Translational research grants are available, such as SMART funds from the Technology Strategy Board. Examples of regional funds are European collaborative programs or local/regional funds. The Technology Strategy Board and Technology Transfer Offices are established research initiatives covering the critical points along the pharmaceutical value chain.
3.5.7.1 In the United States
The emerging NIH, National Center for Advancing Translational Sciences (NCATS) is aimed at supporting the creation and enhance- ment of innovative methods and technologies for development, test- ing, and implementation of health care products addressing diseases and conditions. The complementary role of the center is important as it strengthens the already existing translational research being carried out at NIH in the public and private sectors. Nonprofit and commercial in- stitutions receive extensive support through the NIH-FDA Regulatory Science Initiative, which is a highly competitive funding source that is focused on research relating to novel technologies and approaches to regulatory review of drugs, biologics, and devices. The US-sponsored NIH Rapid Access Interventional Development (RAID) pilot program is an NIH Roadmap initiative to support preclinical development of small molecule drug candidates that include bulk active pharmaceuti- cal ingredient (API) synthesis and support, formulation development, analytical assays, good manufacturing practice of clinical supplies, safety tests, development and validation of animal PK, and toxicology. This program is currently available to investigators at academic, nonprofit, and Small Business Innovative Research (SBIR)-eligible institutions.
There is also the SBIR and Small Business Technology Transfer (STTR) program with similar objectives, all directed toward promoting innova- tion. As seen in Figure 3.2, as the development process advances, the potential for surviving candidates to become a drug rises in proportion to increasing expenditure for development of target of interest [38–40].
The Clinical and Translational Science Awards program [41] provides infrastructure grants for academic medical institutions that engage in translational research mostly in US centers with expertise in preclinical science, clinical trials, comparative effectiveness research, training, and community engagement.
Social Aspects of Drug Discovery, Development and Commercialization 74
3.5.7.2 In the United Kingdom
Series of policies for bridging the Valley of Death were proposed by the UK government. Government investments are utilized for the transforming of research as a way of enhancing the climate for commercialization of research.
Some of the measures are supplementing the venture capital investments, reforming the tax system, actively supporting the small-to-medium enterprises (SMEs), and technology. The Small Business Research Initiative supports innovative ideas from small companies and others through public procurement [42]. The Stratified Medicines Innovation Initiative supports the strategies that help accelerate and improve development of high- quality clinical candidates. It proactively addresses this problem through collaborations that support the discovery phase, to bridge drug discovery and clinical research and increase the potential of commercialization of research [43–44]. The establishment of the High Value Manufacturing Catapult Centre initiative was to improve innovation risk and lack of productivity in drug discovery while fostering a strong link between university research and commercialization through financial support that provides access to facilities for the SMEs [45]. These initiatives where stimulated by UK failing venture capital investments resulting in low start-up establishments, which was substantially reduced to £677 million in 2009, from £930 million in 2000 [46].