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25 Years of Biotechnology – Has

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									25 Years of Biotechnology –
  Has It Met Its Promise?

   Gilad S. Gordon, MD, MBA
                 Disclosures
Consultant to:
–   Allos Therapeutics
–   Array BioPharma
–   Attenuon
–   GlobeImmune
–   Intarcia
–   Kinex
–   MetaBasis
–   OSI
–   QLT
–   Quark Pharmaceuticals
25 Years of Biotechnology – Has It
        Met Its Promise?
 Yes
 – Remarkable strides since human insulin approved in
   1982
 – Cured some diseases
 – Improved quality of life for many
 – Clearly a mature industry with hundreds of drug
   approvals
 No
 – No clear drug products from Human Genome Project
 – No clear therapeutic path to individual genomic based
   pharmacotherapy
  Biotechnology History
1953 – Structure of DNA defined
– My parents get married
1957 – Lord Todd wins Nobel Prize “for his work on
nucleotides and nucleotide co-enzymes”
– I am born
1962 – Watson and Crick win Nobel Prize
– I enter Kindergarten
1974 – Boyer and Cohen demonstrate the
expression of a foreign gene in bacteria
– I apply to college
1976 – Genentech, first biotech company is formed
– Dr. Bill Haseltine is assigned as my tutor, I go pre-med
1978 – First successful laboratory production of
recombinant human insulin
– I take the MCATs
      Biotechnology History
1980 – Genentech goes public
1980 – First human test of recombinant insulin
– I begin second year of medical school
1982 – Human insulin approved by FDA and
marketed by Eli Lilly under license from
Genentech
– Senior year - I undertake studies on intra-nasal insulin
  with future Dean Dr. Jeffrey Flier
1983 – First monoclonal antibody test approved
for testing for Chlamydia Trachomatis
– We graduate Harvard Medical School!
      Biotechnology History
1985 – Genentech receives FDA approval for
human growth hormone – first drug to be
marketed by biotechnology company
1985 – Polymerase Chain Reaction (PCR)
technology developed
1986 – Chiron receives FDA license for Hepatitis
B vaccine – first recombinant vaccine
1986 – Muromonab-CD3 receives FDA approval
for reversal of acute kidney transplant rejection –
first monoclonal antibody approved for therapy
– I finish residency in Internal Medicine
    Biotechnology history
1990 – First gene therapy for ADA deficiency
1990 – Jurassic Park published – public aware of risks
1991 – UCSF and Stanford earn $40 million from
  patents – changes way universities look at
  biotechnology
1991 – Alglucerase approved to treat Gaucher’s
  disease
1997 – First cloned sheep - Dolly
1997 – Rituximab receives FDA approval – first
  antibody based treatment for cancer (non-Hodgkin’s
  Lymphoma)
2000 – Human Genome mapped
Biotechnology Companies (2006)

 Companies               United States          Worldwide
 Public                  336                     710
 Total                   1452                    4275
 Revenue*                $55.4 B                 $73.5 B
 Net Loss                $3.5 B                  $5.4 B
 Research and
    Development**        $22.8 B                $27.8 B
 # employees             130,600                190,500


  *52 companies are profitable
  **For comparison: 2006 NIH Budget - $28.7 B
                                                  Ernst & Young, 2007
          Biotechnology today
2000
  3 biotech product categories with over $1 billion
  in sales out of 36 total products with over $1B in
  sales
2006
  18 biotech product categories with over $ 1
  billion per year in sales out of 101 total products
  with over $1B in sales
  10 biotech product categories with over $2
  billion in sales out of 36 total products with over
  $2B in sales
New Biotech Drug and Vaccine Approvals/
   New Indication Approvals by Year

         New Biotech Drug and Vaccine Approvals/ New Indication Approvals by Year




                                                                                    Bio, 2007
 Top 10 Biotechnology Proteins
Drug                                 2006 Sales
   Human insulins (diabetes)*        $7.8 B
   Epoetin alpha (anemia)*           $6.1 B
   Etanercept (arthritis)            $4.4 B
   Darbopoetin (anemia)*             $4.1 B
   Rituximab (NHL)                   $3.9 B
   Infliximab (Crohn’s, arthritis)   $3.6 B
   Trastuzumab (breast cancer)       $3.1 B
   PEG-filgrastim (neutropenia)*     $2.7 B
   Bevacizumab (colon cancer)        $2.4 B
   Adalimumab (arthritis)            $2.0 B

* ”Replacement therapy”
                                                  Ernst & Young, 2007
        Major Challenges
Complexity and costs of clinical research
FDA policies
Pricing
Financing
Phases of Clinical Research
Phase I – 50-100 patients
– First in Man
– Dose escalation
– Define Maximum Tolerated Dose
Phase II – 200-1000 patients
– Early efficacy trials
– Define therapeutic dose
– Define study population
 Phases of Clinical Research
Phase III – 500-5000 patients
– Large clinical trials
– Define safety and efficacy in target population
– Define limitations of drug
Phase IV – thousands of patients
– Post-approval
– Better define safety
– Identify other target populations
         Clinical Research
        Timelines and Costs
Overall costs – discovery to approval
– Time: 4-14 years
– Costs:
    $30-$200 million
    Over $800 if amortize costs of failed drugs
– Number of patients:
    Minimum 500 for rare disease or unmet medical
    need
    5,000 for drug for common disease, i.e. arthritis
    Over 60,000 for recent vaccine for RSV
          Clinical Research

Ongoing challenges
– Access to patients
– Access to investigators
– Availability of research personnel
– Location of research
    United States
    Developed world
    Under-developed world
              FDA Policies
Overall, fewer new drug approvals
Balance of off-label use vs. restriction on off-
label use
Balance of safety vs. demand for new
therapeutics
– Currently weighted towards safety
– Increased need for post-marketing safety studies
– Demand for increased size of trials to demonstrate
  safety
What is role of generic proteins, i.e. bio-similars?
  Costs of Treatment of Colon
            Cancer
1996
– Total costs of drugs:     $500
– Expected median survival: 11 months

2007
– Total costs of drugs:     $250,000
– Expected median survival: 24 months

IS TREATMENT WORTH $20,000 PER
ADDITIONAL MONTH OF LIFE?
                                        Ernst & Young 2007
                     Pricing
What is a fair price?
– Company perspective
     “Appropriate” return on investment to investors
     Assure future investments in the field
     Comparable pricing to “similar” products
     Favorable cost-effectiveness analyses
     Drug costs are still less than 10% of total costs of
     healthcare
– Public health perspective
     Can payers afford $500 to $35,000 (Eculizumab for
     PNH) per month?
     Is this price-gauging?
     Should prices be based on “cost of goods”?
     What is the “value” of the drugs?
     Why are prices lower in other countries?
Pricing - Response of Payers
Governments – develop cost-effectiveness guidelines for
drug pricing approval
– UK – Rejected use of bortezomib, bevacizumab, and cetuximab
  based on price
– Australia – Rejected use of Human Papillomavirus Quadrivalent
  (Types 6, 11, 16, and 18) Vaccine, Recombinant based on price
Local Payers
– Strict criteria on who gets drug
Insurance companies
– Increase co-pays
Individuals
– Decision to forego therapy

Overall, should there be a “pricing policy” and what
would be its implications?
       Financing Sources
Government
Venture capital
Partnerships
Public markets
     Additional Challenges
Basic research
Pre-clinical research
Intellectual property
Pharmacogenomics
Individual therapeutics
      Early Stage Research
Basic research
– Harder to justify in corporate world – role of NIH
– Who will fund?
Pre-clinical research
– Most active area of research
– Need to define more appropriate pre-clinical efficacy
  models
– Need to define more appropriate toxicology models
       Intellectual Property
How to protect Intellectual Property?
– Role of Universities
– Changing rules – “first to file” vs. “first to
  invent”
– Value of IP in developing countries
       Pharmacogenomics
How to integrate human genome knowledge?
– How to translate findings of the human genome into
  population based therapeutics?
    How to determine if specific DNA mutations cause disease?
    How to develop therapy for different mutations in different
    genes which cause the “same” disease?
    How to treat different mutations in the same disease-causing
    gene?
    How to develop specific therapeutics for specific DNA
    mutations?
– Population-based genotype databases?
    Critical to understand disease, the effect of therapeutics, and
    the safety of therapeutics?
    How can one preserve confidentiality in age of “insurance
    discrimination”?
    Individual Therapeutics
How to develop individual therapeutics?
– Can genotype differences predict response to
  a therapeutic?
    i.e different responses amongst African-Americans
    to isosorbide dinitrate/hydralazine for heart failure
– How to develop drugs for individual patients
    The ultimate holy-grail of medicine!
    Requires change in paradigm of FDA review
     – Are there valid “pre-clinical” models that can be used?
     – Need to focus on individual efficacy vs. population based
       safety and efficacy
    25 Years of Biotechnology
From Human Insulin to Today….….
  Industry is certainly mature
  Hundreds of drugs approved
  Many patients have benefited
  Challenges remain
  Overall – promise of the new technology of
  1983 has largely been met and even
  exceeded!
The Future…………….

								
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