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Covid-19 Vaccines – A Multifaceted Perspective

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Even after the destruction of millions of lives, livelihoods, social fabric and national economy of almost all countries – the mayhem of the Coronavirus pandemic continues, unabated.

Echoing what many other global experts, the United States National Institute of Allergy and Infectious Diseases Director has also reiterated ‘that the only “ultimate solution” for the Coronavirus would be a vaccine.’ He added, the social distancing measures and travel restrictions could help curb the outbreak but can’t last forever. Moreover, the virus might come back. Thus, only a vaccine could help in the long run.

That a speedy progress in achieving this goal, is the most critical remits for the global medical scientists and technologists, attract not many contrarian viewpoints. Nevertheless, some red flags are also visible in this critical area. Thus, to give a multifaceted perspective to the ‘Covid-19 vaccine story’, let me dwell on some of these contentious areas.

Vaccines may not be ‘silver bullets’ for all:

According to the news release of the World Health Organization (W.H.O) on July 15, 2020, 75 countries have submitted expressions of interest to protect their populations and those of other nations through joining the COVAX Facility. This is a mechanism designed to guarantee rapid, fair and equitable access to COVID-19 vaccines worldwide. These countries would finance the vaccines from their own public finance budgets and partner with up to 90 lower-income countries.

It further added, interest from governments representing more than 60 percent of the world’s population offers ‘tremendous vote of confidence’ in the effort to ensure truly global access to COVID-19 vaccines, once developed.

Expressing its optimism and also a concern at the same time, the W.H.O on August 03, 2020, informed – out of a number of vaccines, which are now in phase-3 clinical trials, it hopes to have a number of effective vaccines that can help prevent people from infection. Interestingly, in the same breath, it cautioned, “there’s no silver bullet at the moment and there might never be.” The question, that may arise, if a ‘silver bullet’ in the form of Covid-19 vaccines is not available and a vaccine doesn’t work for all, how complicated would then the situation be? Can one expect Covid-19 to end, at all?

When can one expect Covid-19 to end, if at all?

Closely following the above message – “there’s no silver bullet at the moment and there might never be,” another message, a bit intriguing, though, came from the W.H.O on August 22, 2020. This time the W.H.O said, “it hopes the planet will be rid of the Coronavirus pandemic in less than two years — faster than it took for the Spanish flu.” Elaborating the point, the W.H.O Chief underscored, by “utilizing the available tools to the maximum and hoping that we can have additional tools like vaccines, I think we can finish it in a shorter time than the 1918 flu.”

The impact of anti-vaccine movement to end Coronavirus pandemic: 

The question may sound crazy to many people, especially in India, but a similar concern has been expressed by many experts. The article – ‘Anti-vaccine movement could undermine efforts to end Coronavirus pandemic, researchers warn,’ published by the Nature on May 13, 2020, also raised this issue. The researchers of the study at the George Washington University, wrote - ‘studies of social networks show that opposition to vaccines is small but far-reaching — and growing.’

That anti-vaccine sentiments continue growing online, as medical scientists are flooring the gas pedal, has also been reported by ‘India Today’ on May 28, 2020 in an article titled, ‘Experimental Covid shots inject anti-vaccine sentiments.’ This belief was ‘prompted by theories that fast-tracked programs are profit-driven, loaded with health risks and will eventually lead to enforced immunization,’ it underscored. Notably, the W.H.O also has flagged the growing anti-vaccine feeling.

W.H.O flagged the growing anti-vaccine feeling:

The issue of growing anti-vaccine feeling has also been flagged by the W.H.O. It noted several reasons for fear of or opposition to vaccination, such as:

  • Some people have religious or philosophical objections,
  • Some see mandatory vaccination as interference by the government into what they believe should be a personal choice,
  • Others are concerned about the safety or efficacy of vaccines,
  • Or may believe that vaccine-preventable diseases do not pose a serious health risk.

Several of these could be significant in some geographical areas, within activist groups, community leaders, people with a different mindset, which may not be too difficult to overcome. Whereas, a few others may throw huge financial and logistical challenges to the nations. Interestingly, ‘one in three Americans is reluctant to take a COVID-19 vaccine.’

One in three Americans appears reluctant to be vaccinated:

According to a Gallup poll conducted between July 20, 2020 and August 02, 2020 ‘one in three Americans would not get a COVID-19 vaccine.’ This poll brought out the fact that ‘many Americans appear reluctant to be vaccinated, even if a vaccine were FDA-approved and available to them at no cost. Asked if they would get such a COVID-19 vaccine, 65 percent say they would, but 35 percent would not.’ Moreover, the percentage of Americans who feel strongly that parents should get their children vaccinated has also dropped by 10 percentage points, since 2001.

Other recent polls, reportedly, also found, whereas, around 50 percent of people in the United States are committed to receiving a vaccine, another quarter is still wavering. Some of the communities most at risk from the virus are also the “most leery.” ‘In France, 26 percent said they wouldn’t get a Coronavirus vaccine.’

Which is why, Covid-19 vaccines, which are expected to be available by early 2021, ‘won’t be mandated by the federal government’, according to Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases. “I don’t think you will ever see mandating of a vaccine, particularly for the general public. If someone refuses the vaccine in the general public you cannot force someone to take it,” he opined.  

But how broad is this ‘spectrum of doubt’?

As captured in the article, “The Coronavirus pandemic is the moment of truth for anti-vaccine movement,” published by the Financial Times on April 28, 2020, some of the emerging issues are worth pondering. It wrote, although, there is a small, highly organized group of people who are implacably against vaccinations, ‘there is a whole spectrum of people who are concerned, or are on the fence, about them.’ According to a poll it conducted in late March 2020, Covid-19 ‘outbreak has the potential to change their minds’ in different ways, such as:

  • Just 5 per cent of people in the UK say they would not take a Covid-19 vaccine if it were available, down from 7 per cent the week before.
  • Whereas, in Austria, 18 per cent said they would not take a Covid-19 jab, compared with 16 per cent three weeks previously.
  • The figure is similar in France, where 33 per cent – the highest proportion in the world — disagree with the statement “vaccines are safe”, according to another 2018 survey by the health research organization – the Wellcome Foundation.

Is there any anti-vaccination movement in India?

This issue has been well deliberated in many papers, one such is the article, “Theme – Ethical And Legal Challenges Of Vaccines And Vaccination, Public trust in vaccination: an analytical framework.” It was published in the Indian Journal of Medical Ethics (IJME), Vol 2, No 2 (NS) (2017). It makes some noteworthy points:

  • While vaccination is one of the most successful public health interventions, there has always been a parallel movement against vaccines.
  • Apart from scientific factors, the uptake of vaccinations is influenced by historical, political, socio-cultural and economic factors.
  • In India, the health system is struggling with logistical weaknesses in taking vaccination to the remotest corners; while on the other hand, some people in places where vaccination is available, resist it.
  • Unwillingness to be vaccinated is a growing problem in the developed world. This trend is gradually emerging in several parts of India as well.
  • Other factors, such as heightened awareness of the profit motives of the vaccine industry, conflicts of interest among policymakers, and social, cultural and religious considerations have eroded many people’s trust in vaccination.

The paper concludes by arguing that engaging with communities and having a dialogue about the vaccination policy is an ethical imperative. Be that as it may, the question still remains: With vaccines can people go back to the old normal?

Despite vaccines ‘We cannot go back to the way things were’:

It is for sure now that despite vaccination, people won’t be able to get back to the old normal. On August 21, 2020, the W.H.O further clarified ‘that a vaccine will be a “vital tool” in the global fight against the Coronavirus, but it won’t end the Covid-19 pandemic on its own and there’s no guarantee scientists will find one.’ One can find a clear meaning to this statement, if the same is read along with the W.H.O Chief’s earlier statement that “there’s no silver bullet at the moment and there might never be.”

Other challenges for mass vaccinations in India:

There are some research studies in this area. Let me quote one of those, published in the International Journal of Pharmaceutical Sciences and Research. The paper noted – although, immunization is the most cost-effective intervention for infectious diseases, there exists a scarcity of information on vaccination status of young adults and the role of socioeconomic conditions in India.

The study concluded – although Td/Tdap (97.3 percent) and MMR (66.4 percent) coverage was in line with the recommendations, for all the other vaccines the coverage was lower – varying from 5.5 percent to 35.4 percent. A number of factors were found responsible for limited growth and penetration of vaccines in India, such as:

  • Lack of adequate awareness among both physicians and patients.
  • Patients prefer treating rather than preventing diseases.
  • Vaccines are provided free under UIP program, but only for highly communicable and life-threatening diseases.
  • Obtaining vaccines through private system is expensive and medical insurance policies do not cover vaccines.
  • A lack of quality data on disease burdens and vaccine efficacy is the biggest obstacle in vaccine coverage in India.
  • Distribution is hampered by inadequate cold chains and constrains to last mile distribution. Storage in the clinics is limited due to frequent electricity blackouts in India.

The vaccination coverage was found better in respondents with higher educated and higher income parents. The researchers suggested patient education, planning by government for the implementation of policy for adult vaccination and involvement of physicians are must for better adult vaccination coverage.

Conclusion:

The United States, Brazil and India now account for more than half the total of over 22 million Coronavirus cases, globally. The number of fatalities had also gone past 782,000, as on August 20, 2020.  However, the Coronavirus cases in the country, as recorded in the morning of August 23, 2020, have also reached a staggering figure of 3,044,940 with 56,846 deaths, despite all measures that the country has been taking. No signs of any respite, just yet.

The Government of India has officially acknowledged that for protection from Covid-19 infection, ‘the herd immunity level is “far away” for the Indian population and it can only be achieved through immunization by vaccines.’ Hence, the country’s dependence and stake on this ‘silver bullet’ are very high. From this angle, the vaccine story needs to be viewed from a multifaceted perspective, including what the W.H.O has already cautioned:

  • ‘There’s no silver bullet at the moment and there might never be.”
  • ‘That a vaccine will be a “vital tool” in the global fight against the Coronavirus, but it won’t end the Covid-19 pandemic on its own and there’s no guarantee scientists will find one.’
  • The Coronavirus vaccines alone won’t end pandemic: ‘We cannot go back to the way things were’ in the old normal. In other words, people should try to adapt to the new normal to lead a normal life.

Besides, there could be other problems like, making vaccination mandatory. Or, distributing affordable Covid-19 vaccines through uninterrupted cold-chains in the remotest part of India, and appropriate storage there. Does India have a robust logistics support for the same, in place? Who will pay for all these? And more importantly, are there Plan B, C & D ready, to meet any unforeseen critical situation. Each of these warrants a deep-stick analysis – with a multifaceted perspective, as the devastating impact of Covid-19 pandemic is so real for all, especially for India.

By: Tapan J. Ray  

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

‘Disease Oriented Treatment’ to ‘Patient Oriented Treatment’ – An evolving trend

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The quest for moving away from conventional and error-prone ‘Disease Oriented Treatment’ paving the way for unconventional individual patient-specific ones, may soon come to fruition. Dramatic progress in the research for developing ‘Personalized Medicines’ could soon offer a choice for individual ‘Patient Oriented Treatment’ with precisely predictable efficacy and safety, especially for the treatment of various intractable and dreaded diseases.

Sir John Bell, Professor of Medicine at Oxford University, adviser on genetics to the government and chair of its human genomics strategy group has reportedly said in early December 2012 that ‘Personalized Medicine’ for all could soon be a clear possibility, as everybody will be able to have their entire DNA make-up mapped for as little as £100 (Rs.8, 700 approx.).

This estimate seems to be quite realistic as Sir John said, the price of genome sequencing has fallen by 100,000-fold in 10 years and genetics being a key component of all common diseases, genome sequencing will help immensely in the use of new drugs, as well.

Raising a flag:

While watching the pursuit of excellence by the genetic scientists in the realm of disease treatment, some experts have reportedly been sounding a note of caution. They strongly feel that DNA code sequencing brings to light a “very real privacy concerns” of individuals.

GeneWatch UK, is an organization that investigate how genetic science and technologies will impact on our food, health, agriculture, environment and society. They have been strongly arguing, if genome sequencing is extended to entire population, individuals and their relatives could then be identified and tracked by matching their DNA with the genome stored in the respective health records. This move, as contemplated by them, could “wipe out privacy” with an impact on the society.

Thus, the ethical and social issues in the development of ‘Personalized medicines’ primarily in the area of genetic testing and consideration of race in the development of such medicines, these thought leaders feel, need to be effectively addressed, sooner.

That said, the Prime Minister of UK Mr David Cameron has reportedly said:

“By unlocking the power of DNA data, the NHS will lead the global race for better tests, better drugs and above all better care. We are turning an important scientific breakthrough into a potentially life-saving reality for NHS patients across the country. If we get this right, we could transform how we diagnose and treat our most complex diseases not only here but across the world, while enabling our best scientists to discover the next wonder drug or breakthrough technology.”

Increasingly more in development pipeline:

Rapid strides in pharmacogenomics bring in a promise of radically different ways of treating diseases, as major pharmaceutical companies of the world make progress in developing much more effective medicines designed to target smaller populations.

Tufts Center for the Study of Drug Development (Tufts University) in its publication named ‘Impact Report’, November/December 2010 articulated, “Bio-pharmaceutical companies are committed to researching and developing personalized medicines and within their development pipelines, 12% – 50% of compounds are personalized medicines.”

Experts envisage that over a period of time ‘Personalized Medicines’ will be targeted to biological/genomic profile of a patient or patient types to significantly improve the quality of treatment.

The definition:

The above report defines Personalized Medicines as “Tailoring of medical treatment and delivery of health care to individual characteristics of each patient, including their genetic, molecular, imaging and other personal determinants. Using this approach has the potential to speed accurate diagnosis, decrease side effects, and increase the likelihood that a medicine will work for an individual patient.”

Mainly due to all these reasons, ‘Personalized Medicines’ are expected to be an effective alternative to quite unwieldy current ‘blockbuster drug’ business model.

Makes a perfect fit:

The aim of ‘personalized medicines’ is, therefore, to make a perfect fit between the drug and the patient. It is worth noting that genotyping is currently not a part of clinically accepted routine. However, it is expected to acquire this status in the western world, very shortly.

Consequent changes and shifts:

This potential paradigm shift in the healthcare space would prompt similar changes in various disease diagnostic technologies, which will not only be able to detect a disease well before appearance of symptoms, but would also indicate which patients will best respond to or be adversely affected by which medications.

‘Personalized Medicines’ will in that process ensure a critical shift from the ‘Disease Oriented Treatment’ to a ‘Patient Oriented Treatment’, which can be initiated even before the clinical manifestations of a disease are detected.

The technological march towards this direction is indeed risky and arduous one. However, the benefits that the humanity will accrue out of this disruptive innovation will far outweigh the risks in all forms.

Towards this direction:

  • The Economist, March 12-18, 2011 in its article titled “Toward the 15-minute genome” reported that ‘nanopore sequencing’ of human genome is now gaining momentum. This could make sequencing of entire genome of cancerous and healthy cells possible to accurately point out what has exactly changed in individual patients, enabling the oncologists to determine patient specific drugs for best possible results in each case, separately.
  • New cancer marker has been reported to aid earlier detection of the disease, where repetitive stretches of RNA are found in high concentrations in cancer cells.
  • A new blood test will accurately detect early cancer of all types with an accuracy of greater than 95%, when repeated the accuracy will even be even greater than 99%.
  • ‘Breast On A Chip’ will test nano-medical detection and treatment options for breast cancer.
  • A brain scan will detect the telltale “amyloid plaques” ,the protein fragments that accumulate between nerves in Alzheimer’s disease.

A difference that matters:

With ‘Personalized Medicines’ the health of a patient will be managed based on personal characteristics of the individual, including height, weight, diet, age, sex etc. instead of defined “standards of care”, based on averaging response across a patient group. Pharmacogenomics tests like, sequencing of human genome will determine a patient’s likely response to such drugs.

All these are expected to offer more targeted and effective treatment with much safer drugs, and in all probability at a lesser real cost. Such medicines will also help identify individuals prone to serious ailments like, diabetes, cardiovascular diseases and cancer and help physicians to take appropriate preventive measures, simultaneously.

Each patient is unique:

‘Personalized medicines’ in that process will focus on what makes each patient so unique, instead of going by the generalities of a disease.

To give a quick example, genetic differences within individuals determine how their bodies react to drugs such as Warfarin – a blood thinner taken to prevent clotting. It is of utmost importance to get the dosing right, as more of the drug will cause bleeding and less of it will not have any therapeutic effect.

‘Personalized medicines’, therefore, have the potential to usher in a revolutionary change, the way patients are offered treatment by the medical profession. Genomic research will enable physicians to use a patient’s genetic code to arrive at how each patient will respond to different types of available treatments.

In the field of cancer, genetic tests are currently being done by many oncologists to determine which patients will be benefited most, say by Herceptin, in the treatment of breast cancer.

Indian initiatives:

Some companies, both well known and little known, are making quiet collaborative progress in the genome sequencing area in India, which will ultimately make expensive treatments like cancer more affordable to many.

Other advantages:

The expected benefits from the ‘Personalized Medicines’, besides very early diagnosis as stated above, are the following:

1. More Accurate Dosing: Instead of dose being decided based on age and body weight of the patients, the physicians may decide and adjust the dose of the medicines based on the genetic profiling of the patients.

2. More Targeted Drugs: It will be possible for the pharmaceutical companies to develop and market drugs for patients with specific genetic profiles. In that process, a drug needs to be tested only on those who are likely to derive benefits from it. This in turn will be able to effectively tailor clinical trials, expediting the process of market launch of these drugs.

3. Improved Healthcare: ‘Personalized Medicines’ will enable the physicians to prescribe ‘the right dose of the right medicine the first time for everyone’ without any trial or error. This would give rise to much better overall healthcare.

Reduced Clinical Trial cost:

Genome sequencing will help identifying a patient population, which will be far more likely to respond positively to the new treatment. In that process, if it reduces costs of clinical trial by even 5%, expected net savings for the industry towards clinical trial in real term will be significant.

With ‘personalized medicines’ the innovator companies will be able to significantly reduce both time, costs and the risks involved in obtaining regulatory approvals and penetrating new markets with simultaneous development of necessary diagnostic tests. Such tests will be able to identify patients group who will not only most likely to be benefited from such medicines, but also will be least likely to suffer from adverse drug reactions.

Therefore, considerable cost advantages coupled with much lesser risks of failure and significant reduction in the lead time for clinical trials are expected to make ‘personalized medicines’ much more cost effective, compared to conventional ‘blockbuster drugs’.

A sustainable business model:

Realization of deficiencies in the deep-pocket economics of ‘block buster drug R&D business model’ has made ‘personalized medicines’ a reality today. Large number of smaller and exclusive markets for ‘personalized medicines’ is also expected to be quite profitable for the pharmaceutical companies. On the other hand, better efficacy and safety profile of ‘personalized medicines’ will prove to be cost-effective in the overall healthcare systems.

However, smaller segmentation of the market may not leave enough space for the conventional ‘blockbuster model’, which is the prime mover of the global pharmaceutical industry, even today.

Reports indicate that some renowned global pharmaceutical companies like, Roche, AstraZeneca, GlaxoSmithKline are making good progress towards this direction through collaborative initiatives.

A different marketing ball game:

With ‘personalized medicines’ the ball game of marketing pharmaceuticals is expected to undergo a paradigm shift. Roche’s model of combining necessary diagnostic tests with new drugs will play a very important role in the new ball game.

Roche is reportedly ensuring that with accompanying required diagnostic tests, the new oncology products developed at Genentech can be precisely matched to patients.

Use in ‘Primary Care’:

Currently there is no widely successful model for use of ‘personalized medicines’ in a ‘primary care’ situation. However, it has been reported that in states like, Wisconsin in the U.S, initiative to integrate genomic medicines with ‘primary care’ has already been undertaken.

Scaling-up operations of such pilot projects will give a big boost to revolutionize the use of ‘personalized medicines’ for precision and targeted treatment for the ailing population.

Current Applications:

Though these are still the early days, initial benefits of ‘personalized medicines’ are now being reported in many areas like:

  • Genetic analysis of patients dealing with blood clots: Since 2007, the U.S. Food and Drug Administration has been recommending genotyping for all patients being assessed for therapy involving Warfarin.
  • Colorectal cancer: For colon cancer patients, the biomarker that predicts how a tumor will respond to certain drugs is a protein encoded by the KRAS gene, which can now be determined through a simple test.
  • Breast cancer: Women with breast tumors can now be effectively screened to determine which receptors their tumor cells contain.

Above applications of ‘personalized medicines’ will help saving not only significant expenses, but also precious time, which is usually spent for ‘trial-and-error treatments’. In addition, this approach also helps clinicians to determine quickly which therapies are most likely to succeed.

A truly patient centric treatment approach:

Generally speaking, unlike conventional ‘one size fits all’ type treatment approach, where same medicine with varying efficacy is tried on a large number of patients with equally varying rates of failure, ‘personalized medicines’ in true sense starts with the patients.

This may not necessarily mean unique treatment for each patient every time. With ‘personalized medicine’-based treatment approach, depending on biological, genetic and genomic characteristics, patients can be divided into groups and targeted treatment with specific drugs showing most efficacy and least side-effects can be worked out for each of these groups. Hence ‘personalized medicines’ by all means are truly patient centric.

Conclusion:

One of the key issues today in the realm of conventional ‘Disease Oriented Treatment’ is that lot many drugs do not work on significantly large number of patients with same efficacy and safety standards. ‘Personalized medicines’ will be able to address this issue with right diagnosis, ensuring treatment with the right medicine in right doses for the right type of patients.

Though in Europe and to some extent in the US, ‘Patient Oriented Treatment’ approaches with ‘personalized medicines’ have already been initiated, these are still early days for this novel concept to get translated into reality for wider use.

Lot many grounds may still need to be covered especially in the areas of medical research and also to work out the regulatory pathways for ‘personalized medicines’ in healthcare by the pioneers of this great concept.

That said, the evolving transition from the conventional ‘Disease Oriented Treatment’ to unconventional ‘Patient Oriented Treatment’ seems to be irreversible now.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion and also do not contribute to any other blog or website with the same article that I post in this website. Any such act of reproducing my articles, which I write in my personal capacity, in other blogs or websites by anyone is unauthorized and prohibited.

 

 

Biologic Drugs: The hunt for the ‘Magic Bullets’ is on

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The global pharmaceutical industry is now navigating its way through very cautiously while negotiating an unprecedented ‘patent cliff’, simultaneously with gradually drying-up R&D pipelines. This unique situation has triggered off several global mega Mergers and Acquisitions (M&A) not only involving better protected biologic drugs business, but also in the large generic space mostly in the emerging markets of the world, which used to be ignored by many before the turn of the new century.

Patent Expiry in next 12 months:

According to an article published in the ‘FiercePharma’ dated October 24, 2011 titled, ‘10 largest U.S patent losses’, over the next 12 months the following best-selling drugs, ranked not by US sales volume but by their weight in each company’s US revenue stream, will face patent expiry:

Company Brand
1 Forest Laboratories Lexapro
2 Takeda Pharmaceuticals Actos
3 Bristol-Myers Squibb Plavix
4 AstraZeneca Seroquel
5 Eli Lilly Zyprexa
6 Pfizer Lipitor*
7 Merck Singulair
8 Novartis Diovan
9 Teva Pharmaceuticals Provigil
10 Abbott Laboratories TriCor

* Patent expired on November 30, 2011

Opening a new vista of opportunity:

In the midst of such a critical situation within the global pharmaceutical industry, application of biotechnology in the drug discovery process opened up a new vista of a broad range of new class of therapies. These include monoclonal antibodies, therapeutic protein hormones, cytokines tissue growth factors, cell or gene therapies and vaccines, just to name a few.

A recent report of the Organization for Economic Cooperation and Development (OECD) predicts that 80% of the total biotech products, which are expected to be commercialized by 2030, will be medicines and medical diagnostics.

Old business model signals a diminishing return:

Over a period of decades, the business model of small-molecule based blockbuster drugs has successfully catapulted the global pharmaceutical business to a high-margin, dynamic and vibrant industry. However, a time has now come when the golden path from the ‘mind to market’ of the drug discovery process is becoming increasingly arduous and prohibitively expensive.

Deploying expensive resources to discover a New Chemical Entity (NCE) with gradually diminishing returns in the milieu of ‘me too’ types of new drugs, does no longer promise a strong commercial incentive.

A shift in focus from ‘small molecules’ to ‘large molecules’:

Since last several years, the success of biologic drugs compared to conventional small-molecule chemical drugs, has been changing the area of focus of pharmaceutical R&D altogether, making the biotech companies interesting targets for M&A.

As per published data, although the market capitalization of the top ten large pharmaceutical companies dropped more than US$ 700 billion since 2001, the same for the biotech companies, on the other hand,  has gone up by more than 50% during this period. This trend signifies proliferation of biotech drugs in the years ahead for meeting unmet needs of the patients.

To keep pace with the biotech led growth of the global pharmaceutical industry, many companies have started imbibing biotech-like R&D structure within their respective organizations. For examples, the pharmaceutical majors GsK and Pfizer have already articulated the strategic intent to restructure their respective large monolithic R&D set-ups to smaller independent drug discovery units.

Such restructuring is expected to foster ‘can do’ spirit of the biotech entrepreneurs within the recreated smaller units of large R&D setups to accelerate overall R&D productivity for enrichment of the new product pipelines. However, future will be the best judge to evaluate the success of this experiment.

As if to vindicate this emerging scenario, on November 30, 2011 Bloomberg reported, “U.K.’s largest drug maker has broken up research into competitive teams and put scientists back at the center of the process. But freedom carries a price: researchers who don’t adapt must go. Scientists now ‘live or die with their project.’ This month, Glaxo (GsK) completed the first appraisal of its new model. The company is now deciding which teams deserve more funding and which ones don’t. The conclusions will probably be made public in February when Glaxo (GsK) reports full-year earnings.”

Biologic drugs offer greater promise to meet more unmet needs:

Unlike conventional chemical drugs, most genetically modified biologic drugs work with a very high degree of precision and accuracy on the cells of the diseased organ. Many clinical studies have amply demonstrated that such drugs not only ensure faster recovery, but also help saving incremental treatment cost because of their excellent safety profile.

As we see today, more and more of those global pharmaceutical companies, who used to spend around 15% to 20% of their annual sales for R&D projects are channelizing a large part of the same to effectively compete in the fast evolving market of biologic drugs mainly through M&A. This strategy well justifies their strategic intent to make good the loss of income from the blockbuster drugs going off-patent quite in tandem with their fast dwindling R&D pipeline, as it were.

The bottom-line impact of a successful well targeted new biologic molecule to treat intractable ailments like, various types of cancer and blood disorders, auto-immune and Central Nervous System (CNS) related diseases, neurological disorders such as Parkinson’s, Myasthenia gravis, Multiple Sclerosis and Alzheimer’s disease, are expected to be huge.

Faster growth of biologic drugs:

Despite patent cliff, large molecule biologic drugs like Enbrel, Remicade, Avastin, Rituxan and Humira continue to contribute more than the small molecule drugs of chemical origin to overall growth of the large global pharmaceutical majors. Many of these drugs were sourced by them either through acquisitions or collaborative arrangements.

Cash strapped biotech companies with molecules ready for human clinical trials or with target molecules falling in the well sought after growth areas like, monoclonal antibodies, vaccines, cell or gene therapies, therapeutic protein hormones, cytokines and tissue growth factor are becoming attractive acquisition targets of the small molecules dominated large pharmaceutical companies having deep pockets.

Global Market Scenario:

According to IMS Health, biologics contribute around 17% of global pharmaceutical sales and generated a revenue of US$ 120 billion during MAT March 2009

In 2010 Biologic drugs increased their turnover to US$ 140 billion in the total market of US$ 850 billion. The sale of Biosimilar drugs outside USA exceeded US$ 1 billion.

Six biologic drugs featured in the top 12 and eight in the top 20 best selling global brands. Remicade emerged as the highest-selling biologics in 2010, ahead of Enbrel. Roche remained the top company by sales for biologics with anticancer and monoclonal antibodies. (source: Knol 2010)

Major acquisitions from 2005-2011 for Biologic drugs:

The opportunity of meeting the unmet needs of the patients with effective biologic drugs, especially in high-growth therapy areas, has given the M&A activities in the pharma-biotech space an unprecedented thrust in the recent times.

Following are the major acquisitions in the field of biologic drugs from 2005 to 2011:

Company

Target company

The deal: $billion

Products
Roche Genentech 47 Rituxan, Avastin, Herceptin, MoAbs, Oncology
Sanofi Aventis Genzyme 20 Orphan biologicsCerezyme, Fabrazyme, Renagel, Synvisc
AstraZeneca MedImmune 15.6 Monoclonal Antibodies
Merck Serono 13.5 Biologics
Takeda Millennium 8.8 Velcade, Oncology
Lilly ImClone 6.0 Erbitux, Oncology
Novartis Chiron 5.8 Vaccines
Teva Cephalon 6.2 Nuvigil, Provigil, Treanda CNS, Oncology
Abraxis American BioScience 4.2 Oncology
Astellas OSI Pharma 4.0 Tarceva, oncology
Eisai MGI Pharma 3.9 Aloxi, Salagen, Hexalen, Oncology
Celgene Pharmion 2.9 Oncology
Celgene Abraxis 2.9 Oncology
Gilead Myogen 2.5 Biotechnology
BMS Medarex 2.4 Monoclonal antibodies
J&J Crucell 2.3 Vaccines
Amgen Abgenix 2.2 Monoclonal antibodies
Boehringer Ingelheim MacroGenics 2.1 Monoclonal antibodies
Gilead CV Terapeutics 1.4 Cardiovascular
Genzyme Osiris 1.4 Prochymal, Stem cells
GSK ID Biomed 1.3 Biologics
AstraZeneca Cambridge Antibody Technology 1.3 Monoclonal Antibodies
Merck Sirna 1.1 RNAi
Amgen BioVex 1 OncoVex

(Source: Mergers and Acquisitions Review2005-2011 Pharma Biotech by Knol)

Why do so many companies want to enter into the biotech space?

The answer to the key question of why do so many companies want to enter into the biotech space of the business, in summary, could lie in the following:

  1. Truly innovative small molecule discovery is becoming more and more challenging and expensive with the low hanging fruits already being plucked.
  2. More predictable therapeutic activity of biologics with better safety profile.
  3. A higher percentage of biologic drugs have turned into blockbuster drugs in the recent past.
  4. Market entry barrier for biosimilar drugs, after patent expiry of the original molecule, is much tougher than small molecule generics.
  5. A diverse portfolio of both small and large molecules will reduce future business risks.

A recent study:

In one of their recent collaborative studies published in an article titled, “Is R&D Earning its Investment?” Deloitte and Thomson Reuters (2009) have reported that the top 12 global pharma majors have 21% to 66% biologic drugs in their late stage product pipeline with the average being at 39%.

Another interesting trend:

Besides mega acquisitions, relatively smaller pharmaceutical players have started acquiring venture-backed biotech companies to enrich their product pipelines with early-stage drugs at a much lesser cost. For example, with the acquisition of Calistoga for US $ 600 million and venture-backed Arresto Biosciences and CGI Pharmaceuticals, Gilead known for its HIV drugs, expanded into blood cancer, solid tumor and inflammatory disease segments. In 2009 the same Gilead acquired CV Therapeutics for US $1.4billion to build a portfolio for cardiovascular drugs. In November 2011, Gilead acquired ‘Pharmasset’ for US$ 11 billion to include in its product pipeline a future Hepatitis C drugs offering 95% cure rates.

Smaller biotech companies usually do not get engaged in very large deals unlike the top pharma players, but make quick, decisive and successful smaller deals more effectively.

Much less generic competition for biologic space:

After patent expiry of NCEs, innovators’ brands become extremely vulnerable to cut throat generic competition with as much as 90% price erosion. This happens as the small molecules are relatively easier to replicate by the generic manufacturers. Moreover, the process of getting regulatory approval of NCEs is also not as stringent as biosimilar drugs in most of the markets of the world.

On the other hand biosimilar drugs involving difficult, complex and expensive processes for development with stringent regulatory requirements for getting their marketing approval in the developed markets of the world like the EU and the USA, offer significant brand protection from generic competition for quite some time, even after the patent expiry.

Mainly due to this reason, brands like the following are expected to go strong for some more time without any significant competition from the biosimilar drugs:

Brand Company Launch date
Rituxan Roche/Biogen idec 1997
Herceptin Roche 1998
Remicade Centocor/J&J 1998
Enbrel Amgen/Pfizer 1998

Smaller biotech companies to be the prime targets:

In my view, the voracious appetite of large pharmaceutical companies for inorganic growth through mega M&A, will ultimately subside due to various compelling reasons.  Instead, smaller biotech companies, especially with products in Phase I or II of clinical trials, without wherewithal to take them to subsequent stages of development, will be the prime targets for acquisition by the pharma majors at an attractive valuation.

Cost of treatment:

Despite so many positives, high priced biologic drugs do raise a critical concern about the incremental load on already ballooning healthcare costs to the patients.

The Wall Street Journal (WSJ) in its September 29, 2010 issue highlighted that biologic drugs can cost as much as $1.5 million annually to the user. Similarly Forbes.com on April 12, 2009 reported, “Biologic drugs can cost up to 22 times more than traditional medications – some as much as $400,000 a year”.

This is indeed a very serious issue that needs to be resolved sooner. Speedy entry of biosimilar drugs will partly address this critical issue.

Conclusion:

Although the large pharma majors have already started experimenting to work with the pure biotech companies in terms of M&A and strategic alliances, it will be interesting to watch the long term ‘DNA Compatibility’ of the business models, organization/ work/employee culture and market outlook of these two different types of organizations while improving the global business performance of the overall entity, significantly.

Only future will tell us whether or not just restructuring of the R&D set up of companies like, Pfizer, Merck, Roche and perhaps Sanofi at a later date, helps synergizing the overall R&D productivity of the merged entities.

Be that as it may, despite serious cost concern, experts still believe that biologic drugs have all the potential to deliver the ‘magic bullets’ in the fight against many intractable diseases of mankind in not too distant future.

Hence the hunt is on.

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.