Biotechnology Venture Capital - New Drug Discovery and Reuse and Re-enactment

I recently reviewed the white paper by David Thomas, CFA and Chad Wessel of Bioindustry Analysis, entitled "The Venture Capital for Treatment Innovation, a Comprehensive Survey of Venture Capital for Drug Development," published in February 2015. In this excellent paper, they report on a few different themes and trends, but for this article, I want to focus on one. They point out that in the past decade, nearly 80% of treatment risk investments have been used for "new drug development" rather than improving existing drugs [eg, new formulations, reuse, drug delivery, etc.].

If the group analyzed by the Institute is the venture capital department of a large pharmaceutical company, then the percentage of de novo investment will not surprise me compared to reuse or re-enactment. However, this is amazing for me when you think about the financial rigor that is usually associated with the venture capital community. Finding drugs from scratch is just a bad choice. Here are the latest indicators - the cost is $1.7 billion, 12 to 15 years, one compound per 10,000 compounds, and only one-third of commercial compounds can recover their original investment.

Compare it to the excellent metrics for repositioning. Because your drug candidate is a drug that already treats other diseases in your body, you can eliminate or greatly reduce the safety and toxic components of the test. Because the drug is known, you can eliminate an average of 4.5 years and $674 million during the discovery process. Now, if you can pinpoint the best candidates and provide a companion diagnosis of safety, toxicity, efficacy, and patient stratification, you can remove years and millions of dollars compared to de novo.
from

There must be a reason why large pharmaceutical companies and this very savvy investor largely ignore this seemingly superior bet. When listening to objections in the market, my conclusion is that they operate under four misunderstandings.

1. We can only get the method of using the patent, which is not enough to provide us with an exclusive period of operation commensurate with this large-scale investment. A: Before the cows go home, we can discuss the composition of the substance and the method of using the patent protection problem, but let us discuss these figures: 1/4 of the total drug market consists of repositioned drugs. Example of repositioning large blocks - including:

-Tecfidera [Biogen] - Multiple sclerosis $2.91 billion [2014]
from

-Rituxan [Biogen] - Rheumatoid Arthritis $1.2 Billion [2013]
from

-Viagra - erectile dysfunction $2.05 billion [2008]

2. Generics outside the label will limit our pricing power and our market share potential. A: This is not supported by facts at all. A simple reconstitution of the repositioned drug will protect it from the off-label prescription. In many instances of successful repositioning of drugs, the availability of generic drugs has very limited impact on the pricing or market share of their new indications. The pricing mechanism in the market does not distinguish between de novo drugs and repositioned drugs.

3. The cost of using a modified drug through the commercialization process is "almost" because it was rediscovered. As shown above, you only need to eliminate most of the process [discovery, tox]. In addition, the FDA recently approved the use of remote monitoring in clinical trials, especially when it comes to re-use of drugs. By fully implementing this approach, it is estimated that clinical trial costs are reduced by 80%. You can provide greater precision in the areas of toxicity, efficacy, and companion diagnostics for patient stratification, so you can bring re-used drugs to market faster and cheaper.

4. The methods used in drug repositioning do not provide sufficient accuracy and system repeatability so that we can invest in this strategy. This is true before the introduction of a technique called high-throughput knowledge screening. This is a big data study of research pioneered by CureHunter. By adding this final puzzle to the other advantages of repositioning, it makes the repositioning investment theory even more compelling.

The market is just beginning to accept this considerable risk/reward advantage, but it is not a large pharmaceutical or biotech company [although Celgene repositioned their new drug while still in the clinical trials of the original indication]. Instead, it is a smaller, flexible biotechnology that develops a change-of-use candidate to form a drug/disease-specific subsidiary, through a first phase and a limited second-stage trial, and then sells the subsidiary to a large pharmaceutical company. Or a biotech company. Before a large company begins to implement this strategy seriously, it may require the success of a series of small companies. Once this door is opened, we will see a loud level of drug pipeline growth, faster drug introduction, more favorable pricing and patient choice.

---

Orignal From: Biotechnology Venture Capital - New Drug Discovery and Reuse and Re-enactment