Lots of people inside pharma lament the existing challenges and look back to a gilded era when blockbusters offered rivers of cash flow and supported development primarily based activities – both R&D and promoting. And yet, could this present biotech’s greatest chance as an sector?
We are all also familiar with how the economics for massive pharma have changed in the last handful of years. Elements consist of:
patent expiries (current and imminent)
declining R&D productivity (as measured by far more dollars for fewer approved merchandise)
healthcare payor pressures as governments search for price range cuts in all locations
paucity of future blockbusters in the pipeline
Biotech has typically been suggested as a saviour with the suggestion that a focused study style based on deep insights, rather than wide pools of area expertise and serendipity, would lead to greater R&D productivity. Right after more than 30 years of trying, there doesn’t seem to be any conclusive evidence that biotech’s analysis method has had any far more good results. Yet, there is nevertheless cause for hope, although for causes driven by necessity and economics rather than just science.
Biotechs by their nature get started out (and frequently stay) as little, nimble firms getting to uncover a niche inside a much greater ecosystem. As with any compact organism or enterprise, you survive by getting really excellent at a focused location or developing niche experience. You just do not have the sources to compete with the huge players.
Thinking of target markets, despite the best-line attractiveness of blockbusters, biotechs typically target niche indications. Though these may be little and initially only have sales prospective in the hundreds of millions of dollars, that can nevertheless make a significant difference to a small business. The equation for huge pharma is a great deal tougher as they want new drugs, for growth or to replace patent expiries, to create greater sales to move the overall performance needle. And however some drugs which start out of in niche (or even orphan) indications, achieve approval and then widen their marketplace chance through label extension. Some examples contain:
Amgen’s erythropoietin stimulating agent, or ESA, franchise, including Epogen (also know as epoetin) and Aranesp. Epogen was initially authorized in 1989 for anaemia in patients with finish stage renal illness, promoting $100 million in 1989. By 1997, the American Society of Clinical Oncology (ASCO) and American Society of Hematology (ASH) had been taking into consideration an “proof based clinical practice guideline on the use of epoetin in cancer sufferers”. Due to the fact Amgen had licensed non-chronic kidney applications to J&J (created as Procrit), they further capitalised on developing use of Epogen in cancer anaemia by building Aranesp, approved in 2001. By 2010, Epogen and Aranesp had combined sales of about $5 billion, from Amgen 2010 10K SEC filing.
Other orphan drugs can end up getting priced so richly that even these can lead to blockbuster status at some point. high throughput DNA purification is Genzyme’s Gauchers disease franchise and Cerezyme which has over $1 billion in sales (and in no tiny aspect driving Sanofi-Aventis acquisition of Genzyme this year for $20 billion).
One more instance of growth by means of label-extension use consists of Cephalon’s drug for sleep disorders, Modafinil or Provigil (trade name). This was initially approved by the FDA in 1998 for enhanced wakefulness in sufferers with narcolepsy. In 2004, this label was expanded for approval to “improve wakefulness in individuals with excessive sleepiness (ES) linked with obstructive sleep apnea/ hypopnea syndrome (OSAHS) and shift perform issues (SWD)”. Provigil sales were $25 million 1999, the year of launch, and had grown to $1.12 billion by 2010. Nuvigil, a single-isomer formulation of Provigil, was approved in 2009, and developed to extend the sleep disorder franchise. This had 2010 sales of $186 million. Provigil and Nuvigil comprised around 46% of total Cephalon sales by 2010 (data from Cephalon 2010 SEC 10-K filings). Provigil’s growth by way of the company’s earlier history supplied a considerable cashflow bedrock to enable additional pipeline development. Interestingly, Teva is acquiring Cephalon for $6.8 billion. When one particular considers contribution to sales, and how its helped pipeline growth, Provigil has played a main part in supporting this transaction.
Other aspects supporting a niche focus incorporate the increasing hurdle with phase II failures. Reporting in Nature Reviews Drug Discovery, the Centre for Medicines Analysis identified that “Phase II achievement rates for new improvement projects have fallen from 28% (2006-2007) to 18% (2008-2009)”. In his blog reviewing what’s behind the phase II failures, Derek Lowe (In the Pipeline) notes that 4 therapeutic locations accounted for over 70% of the failures – cardiovascular, CNS, metabolic ailments (diabetes) and oncology. He recognises oncology and CNS as traditional high risk regions and diabetes is a difficult nicely-served marketplace with higher current common of care (producing the efficacy barrier larger). But in cardiovascular, he suggests staying away from the large, obvious plays:
…that’s interesting, due to the fact that region has traditionally had 1 of the better trial achievement rates. Probably that 1 is also suffering from the regular of care getting quite good (and typically generic, or soon to be). So the higher-results-rate mechanisms of the old days are well covered, leaving you to attempt your luck in the riskier tips, while still attempting to beat some fairly superior (and pretty low-cost) drugs…