COVER STORY
BIOTECH VIES FOR POSITION With the drug industry pressed to find new paths to innovation, the tension between large- and small-molecule therapeutics takes center stage RICK MULLIN, C&EN NORTHEAST NEWS BUREAU
T
HE PHARMACEUTICAL INDUSTRY IS POISED FOR A
transformation. The impetus for change can be seen on its business side, where an era of surging profits fueled by blockbuster drugs grinds to a halt. Research pipelines at big pharmaceutical companies, directed at overserved therapeutic categories, are running dry and the sector maybe hitting the limit on growth through consolidation. "Big pharma" is, in fact, so big now that the scramble to maintain double-digit growth works against any effort to jump-start innovation. Projects are dropped unless they are deemed certain to produce drugs with sales of a billion dollars, and research budgets are cut as major pharmaceutical companies turn to tweakHTTP://WWW.CEN-0NLINE.ORG
ing their breadbasket products in hopes of gaining brief patent extensions. The catalyst for change, on the other hand, is science—specifically the reorientation of chemistry and biology to address underserved therapeutic categories such as cancer and central nervous system disorders. The decoding of the human genome and the mounting banks of targets for new drugs have created an enormous new opportunity for growth. The expanding role ofbiology has, however, introduced uncertainty as to which sector of the industrymajor pharmaceutical or biopharmaceutical—will benefit most. Indeed, there is a growing tension between the development of small-molecule and large-molecule therapies—between the pharmaceutical industry's traditional synthetic organic chemicals and the complex C&EN / JANUARY 27, 2003
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COVER STORY dustry is still geared to the production of small-molecule drugs and lacks the infrastructure to produce major biopharmaceutical products. Small-molecule drugs can be administered in oral dosage form,
proteins and antibodies that are emerging from biotechnology Many new drug targets key on protein-protein interactions, posing seemingly daunting barriers to traditional small-molecule approaches. Industry sources estimate that about 30% of the drugs in the development pipeline are biopharmaceuticals—the majority at preclinical stages. The question is how many of these candidates will make it to commercial launch. The 40% failure rate for small-molecule drug candidates in late-stage clinical trials will probably translate into a similarly bleak prospect for success in biotech drugs, according to industry watchers.
development programs—albeit programs based on biology in early-stage development. In fact, several biotech drug development companies focus entirely on smallmolecule approaches. The largest suppliers of fine chemicals to the pharmaceutical sector are also positioning themselves to provide biologies on a contract manufacturing basis. Lonza, DSM, Avecia, Dow Chemical, Akzo Nobel, and other top companies have made major investments in biologies production and announced moreto come. As fine chemicals suppliers adapt to changes in the pharmaceutical market, a distinct class of combined fine chemicals/biotechnology companies— often referred to as "biofine" suppliers—is emerging, comBIOPHARMACEUTICALS are not posed of the large, comprehensive expected to experience explosive fine chemicals companies that have growth. Enthusiasm in the sector led the sector through the 1990s. dampened last year amid a spate of "There is no question that biomajor clinical disappointments: Aclogics will play a greater role in the cording to life sciences merchant grand scheme of all human therabank Burrill & Co., 30 biotech drugs SCALE-UP Avecia's $100 million plant expansion peutics," says Jeffrey D. Hsi, an inmissed critical milestones in Phase in Billingham, England, is part of the push to fill the tellectual property and patent law II or Phase III trials. Still, 20 bio- capacity gap in biologies. attorney with Fish & Richardson, pharmaceuticals received final apBoston.'Amgen and Biogen and other bioproval last year, and 15 received approvals whereas large-molecule drugs are adminpharmaceutical companies have really esfor new indications, according to Burrill. istered via injection—a less popular option tablished their effectiveness and have what From their small base—currently 8% of the with patients. And the cost of producing are deemed blockbuster biologic drugs. $390 billion worldwide drug market—biobiotech drugs is much higher than that of However, the state of the industry is such pharmaceuticals are expected to reach 15% manufacturing small-molecule drugs. that large pharmaceutical companies are of a $550 billion market by 2006. Major pharmaceutical companies, driving what is going on, and they are nonetheless, are working on making There are, however, several practical skewed toward small molecules." biotech part of their future. Similarly, barriers to developing large-molecule therapies. The mainstream pharmaceutical in- biotech companies have small-molecule Hsi says, however, that genomics has
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COVER STORY provided a more accurate understanding of the specific role proteins play in various dis eases. "Some extrapolate to the point where there will be individualized medicines based on patients' genetic makeup," he says. Genentech's Herceptin, abreast cancer drug known to be effective for about 25% of all patients, is a kind of prototype of such drugs. Patients are screened for re ceptivity before Herceptin is prescribed. The advent of individualized biopharmaceutical medicines, Hsi says, would be a fundamental break from the blockbuster approach of targeting the widest possible population. Individualized medicines are along way off, though, and Hsi says biotech's primary role will be in drug discovery and devel opment. This will often lead to a smallmolecule approach where development is done by or for a traditional drug company "Certainly, the larger pharmaceutical company will be interested in pursuing the small molecule, because it is less costly to develop than a biologic," he says. "Because of the nuances of proteins, there are so many things that can vary in production of abiologic.The cost ofproduction and qual
ity control is much greater than with small molecules. The hurdle is much higher." Still, large pharmaceutical companies claim they are keeping their options open. "I don't believe any pharmaceutical com pany is all small molecule anymore," says Raghavan V. Venkat, senior technology
ternally We've been heavily involved for six years." GSK has had no success so far in com ing up with a commercial biopharmaceutical product, but at least 5% of its drugs in clinical development are proteins, and the company has a plant with commercialscale protein manufacturing ca pacity Venkat says. Over the past six years, several GSKbiopharmaceutical molecules have gone to Phase II trials. One, Bexxar, a can cer drug codeveloped with Corixa, has been filed with the Food & Drug Administration. Partnership is an important route for drug firms that lack a biopharrnaceutical infrastructure. AstraZeneca, for example, recently announced a deal with Dyax, in which Dyax will supply a mono clonal antibody with a high affinity for an Alzheimer's disease drug target. In other cases, big drug companies are acquiring the rights to a biopharmaceutical compa ny's pipeline. Recent deals include Roche's acquisition ofworldwide rights to Antisoma's oncology pipeline, including Pemtumomab, a product in Phase II trials for ovarian cancer, and GSK's acquisition ear lier this month of the rights toTheravance's experimental respiratory drugs. Both deals are worth about $500 million.
It isn't true that by escaping the issues of large molecules you get out into a nice green open field." manager with GlaxoSmithKline. 'All have significant resources dedicated to largemolecule manufacturing." He says biotechnology is of interest mainly in the area of target validation. "Most pharma companies are collaborat ing with genomics partners," he says. GSK has many of the necessary tools in-house, however. "We have access to one of the largest libraries of genomics databases," Venkat says. "We also have discovery and research alliances. Reagents are made in
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"TURNING a blind eye to biotech is not reasonable," says Jitendra Patel, director of discovery alliances at AstraZeneca. "Ge nomics has opened up a large area of op portunity where biotechnology is the im mediate route to benefit. You need to recognize when the time is right to go be yond small molecules, where restricting yourself to small molecules will also restrict your breadth of opportunity" AstraZeneca is trying to identify all ar eas where biotechnology leads to the de velopment of a superior drug—large mol ecule or small, Patel says.
