The Business of Biotech
- Article 1 of 7
- iSight, July 2003
The role of start-up biotechnology companies is becoming ever more important as the big pharma companies look to partners to provide innovation and inspiration.
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Jerini, a drug discovery company based in Berlin, argues that the problem is a lack of new methods of attack. “If you look at all potential drug targets with conventional methods, you could address 50% of the targets,” says CEO Jens Schneider-Mergener. “What do you do with the remaining 50%? You need novel discovery strategies.”
The suggestion is that, with big pharma companies spending their time on the conventional approaches, smaller biotechnology companies have the opportunity to develop unconventional approaches.
SPIRALLING COSTS
While output in the pharma companies has stalled, the cost of producing new medicines has risen. Last year, the industry spent $44 billion on R&D. Analysis from the Tufts Centre for the Study of Drug Development suggests that it now costs an average of $800 million to get a drug to market, more than twice as much as in 1987.
Much of this spending goes on clinical trials, the last stage of drug development. A decade ago, testing a drug on 1,000 patients was enough to prove its safety and efficacy. Now regulators demand trials on 4,000 or more patients and an array of biochemical and clinical tests, all of which add to the expense and duration of a trial.
But according to Martyn Postle of Cambridge Pharma Consultancy, up to 70% of the total development cost is taken up by drugs that do not even make it to market. For every 10,000 molecules screened in a given programme in the laboratory, only one will make it through to launch.
Many biotechnology companies have noted this problem and have already devised ways of narrowing down the list of molecules to be screened. Oxagen, an Abingdon, UKbased company, for instance, has a huge database of DNA samples from families with hereditary diseases that it uses to find genetic targets. It then finds which drugs can affect those targets.
“We’re seeing a lot of attrition in the pharma industry, where companies reach phase II of a trial and find that a drug doesn’t work because it targets something that has nothing to do with the disease,” says Oxagen CEO Mark Payton. “We’re only attacking validated targets: we think that’s the way the pharma industry is going.”
InPharmatica, also based in London, takes the approach one step further by looking for targets it can affect first, then seeing whether there are any associated diseases. “Companies can spend millions of dollars identifying targets that end up not being druggable,” says CFO Patrick Banks. “Our approach can narrow down the candidates for successful treatments.”
TRIALS AND TRIBULATIONS
The most public failures are those drugs that make it into clinical trials, and then stumble. According to the CMR, the success rate of drugs going from large phase III trials to market has fallen by almost 30% in recent years. Roughly three-fifths of drugs in clinical development falter because of toxic effects, other safety issues or their failure to do what they are supposed to. Companies such as Arakis, based in Saffron Walden in the UK, Combinature Biopharm, based in Berlin, and Paion, based in Aachen, Germany, try to avoid this unexpected toxicity from the outset.
Arakis develops drugs based on existing drugs that have passed toxicity tests to minimise the chance of their own drugs having side effects. Combinature Biopharm develops natural compounds by substituting genes into micro-organisms. And Paion uses drugs based on naturally occurring chemicals found in specialised animal organs. “This methodology does not require extensive and error-prone target validation,” explains joint MD Mariola Söhngen. “It leads directly to plausible protein drug candidates or drug targets as the functionality of the selected proteins was optimised by evolution in the respective tissues and organisms.”
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