Neil Canavan10.12.06
Formula One: The Race To Get It Right
Formulation development opportunities abound
by Neil Canavan
The outsourcing of drug formulations has exploded as Big Pharma guns for novelties beyond their scope, small pharma hunts for exterior expertise, and the so-called virtual company chases everything in sight -- and this while everyone needs to bag their quarry in the shortest possible time.
Photo courtesy of Halozyme |
Business models are evolving to keep pace with the business on the ground; formulations are becoming as exotic as, say, a new biologic, or as wily as the old blockbuster, reformulated to outwit its generic fate.
There are players aplenty and possibilities abound. This fact is clear to Kenneth Locke, chief business officer of the San Diego-based Medicinova. "We outsource not just formulation but many aspects of our development process," he said. "We're a 20-person [virtual] organization with six drugs under development -- we do everything through third parties. It's a vital part of how we do our business."
A daunting situation to be sure: identifying each external expert for a multitude of internal needs. Not only do you need to learn the identities of those specifically skilled, you need to ascertain their level of commitment. "Obviously, with a contractor they don't have the vested interest in the project that you do. They're not your employee, and might not have the same motivation," said Mr. Locke. "That can be a downside."
To avoid most of the effort and some of the doubt, Mr. Locke first finds a consultant. This search, however, can also be a bit haphazard. "Some of it's word of mouth -- other contacts are based on need," he remarked. If you have a particular need, say, an enteric coating, it's easier to find a company that does that particular job well. Entities with more global skill sets may be found, if not through networking or on the Web, then at an exhibit booth of the nearest scientific meeting. Or, as Mr. Locke recalled, speaking of his recent experience with consultants for Medicinova's cancer drug, MN-029, "I think they found us." 'They', in this case, were the consultants of Fulcrum Pharma, which guided the development on MN-029's injectable formulation.
Fulcrum, a company with offices in the U.S., UK, and Japan, can offer a wide range of advice -- comprehensive for the virtual company, or targeted for those with specific needs. Regarding the paths to formulation, the degree of guidance varies widely. "We have cases where a client knows what they need as far as type of formulation, but they don't have the expertise in-house," said Melynda Watkins, director of Pharmaceutical Development at Fulcrum. "We also have clients who don't know if they need an oral, an injectable, or in some cases, multiple options."
And the decision to outsource may not just hinge on the desired developmental direction or skill -- there's a lot of money involved. "It gives a client piece of mind," said Ms. Watkins, "to know that as they move forward they have the ability to turn [contract services] on or off, rather than have to staff internally and shoulder a much greater overhead burn rate."
The reasons to outsource are compelling, but Ms. Watkins' advice comes with a caution: Projects still have to be managed. "Occasionally, there are perceptions on the client side that if they take the API themselves to a large, one-stop CRO they can just toss it over the fence and have them take care of it," she commented. But it's never that easy. It's like doing a little homework before going to the doctor -- you need to have at least some idea about what's wrong, and how the problem might be approached. "Clients still need to understand that they have to be specific about what studies are needed, and not just sign off on work because the CRO is capable of doing it," she added.
AAIPharma is one of those one-stop firms, a CRO with branches in six countries. The company has competencies enough to serve the industrially well entrenched, or the client who only has -- as the lottery people put it -- "a dollar and a dream." AAI can also provide services related to a broad range of formulation needs, be it the optimum route of administration, or the quickest way to prepare for a clinical trial. "Depending on what stage of development they're in, we're going to take a substantially different approach," said AAIPharma's Jim Murtagh, the director of Parenteral Product Development. "For instance, we're involved in projects where there is a well established active ingredient and the task at hand is to look at a modified release profile -- this is a narrowly defined route that the client's already identified."
Alternatively, there's the challenge of the new chemical entity (NCE), where it's not even been established if the agent is safe or has a reasonable therapeutic efficacy. Here the mission is not the market, but the cost of continued R&D. (Note to all with a high burn rate: Fail Early.) Mr. Murtagh concurred, "For NCEs we want to find the simplest, shortest, cheapest route to get that first clinical evaluation done." This enables the client to dose a handful of people in a clinical setting as quickly as possible in order to determine how -- or if -- to proceed.
Both approaches seem straightforward, but a lack of communication can skew the line. One concern is IP. Regarding novel formulation technology, simply put, if it's the vendor's concept, it's the vendor's patent. Mr. Murtagh explained, "When these discussions have arisen we've said, 'Well, we're going to take these development routes to try and get you what you're telling us you need. Now, should we develop some IP. . .'" AAI's current policy is to take the patent, but exercise no control over the finished product. "It's something we want to make sure that our clients understand is a possibility as we undertake these projects."
A potentially more serious matter can arise with disconnects in continuity. "We have a case right now -- it's unclear from the fellow we're working with. . ." Mr. Murtagh paused so as to be diplomatic in his frustration. "The client has had some turnover as the project has continued, and when this happens you lose the continuity. You can reach a point where you look at what you have and you go, 'Why did they do it this way?' and no one on their side can answer that."
Problems like these can cause consternation, or may even be the driving force of change. Just ask Tim Scott, president and co-founder of Pharmatek of San Diego, CA. He and his colleague Jeffrey Bibbs started on the pharma side but felt compelled to launch a CRO. Said Mr. Scott, "You know, it's not something that you tell your mother, 'When I grow up I want to start a CRO!'" But one day, you just might see the need.
They wrote down all the things they didn't like about working with CROs and, once written, three issues dominated the list: timing, talk, and money. First was timing: "Their responsiveness is not good. They're slower in getting projects done -- especially the large CROs." This may seem counterintuitive, as those with the most experts should be the most proficient, but Mr. Scott insists that it's not the case and sees it as an historical artifact, remarking, "If you think about it, 20 years ago the CROs working with Big Pharma -- there wasn't an expectation for them to be fast." But 20 years forward there's been incredible growth in the faster-paced small pharma industry, with business engines stoked by impatient VCs who want to see things done so they can sell, or license, and so move on. Mr. Scott feels that this need for speed means the old CRO model underserves small pharma.
Continuing on the list, he said, "Another key thing is that you couldn't talk directly to the scientists. You were always working through a project manager -- a buffer between you and the bench. We didn't like that either."
And then there's billing: "You could never match up invoices with milestones." Monthly invoices became a way of tracking time and materials, not accomplished tasks.
Complications were totaled up, and Mr. Scott and his partner concluded, "If we were going to do this it had to be on our terms, so we turned the business model on its ear." They were determined to streamline the timeline, to put scientists in direct touch with the client -- no project manager -- and that particular scientist would then shepherd the molecule through the entire process. Communication was direct, and was scheduled on a weekly basis. Invoices were clear, and linked directly to milestones. "Clients love it. We have no turnover in clients," Mr. Scott declared. Or for that matter, employees, which is rare in this industry. He speculated that his model imbues loyalty because his scientists have a say in the process. But are the results scalable? Mr. Scott laughed, "We're still not sure. We're at 50+ employees right now. Ask me again when we get to 100."
Trends driving the formulations themselves are efficacy, economy, and increasingly, convenience. Bertrand Bolduc, president and chief executive officer of the Canadian firm Mistral, spoke to these points: "There's certainly a trend to tailor products to make life easier for patients. I still work in a pharmacy one evening per month -- I see ordinary people, and its very hard for them to understand the minute they get more than two pills, more than two inhalers. . . . It's complicated." One way to simplify the therapeutic day is to produce combination therapies. "We're seeing more and more combination products, like Pfizer's Caduet [a calcium channel blocker plus a statin]." Not only does this strategy extend patent life, but it makes life physically easier for patients, and, as Mr. Bolduc has observed, there's also a psychological effect for his customers: "If you take one pill a day instead of two, you think you're less sick. Really, people think like that! If asked, people don't say, 'I take three types of medication.' They say, 'I take eight pills a day.'"
Cutting down on the number of drugs is great, but Bolduc would also like to address the issue of timing, via chronotherapy. Using novel technology licensed from GlaxoSmithKline, Mistral is developing a combination of an anti-inflammatory and an anti-ulcer medication for arthritis sufferers: MIST-B03. "It's about getting the right level of drug at the right time of day. For arthritis, the pain is usually the worst in the morning. But if you take an anti-inflammatory in the morning you risk stomach upset." Using a chronologic approach, the drug is taken the night before and, because of its proprietary structure, becomes active only after the gut has been protected from irritation.
While both active agents in MIST-B03 are generic, the reformulation approach with combinations is increasingly prevalent as blockbusters fall off patent -- a unique opportunity for the contract service provider. Mr. Bolduc commented on two recent reformulations developed in partnership with Pozen: One, partnered with GSK, is soon to be approved, and the other, recently announced, is partnered with AstraZeneca. "Consider what the guys at Pozen have done with the migraine drug Trexima [a combination of sumatriptan and naproxen]. They started the project much before they talked to GSK – and with AstraZeneca as well -- obviously it's the same formulation [a branded drug combined with the generic naproxen]. Pozen started the project, filed patents for it and then approached AZ -- I'm sure that's how it went."
So, what does this mean for formulation companies? "There are hundreds of such companies out there," said Mr. Bolduc, "and brand companies are not looking for technologies, they're looking for products." It may be time for vendors to take a more active role. "Identify the opportunity," he concluded, "work on it, bring it to the point where risk is mitigated and then approach the brand company -- that's what we intend to do."
Reformulation is also on the mind of Jonathan Lim, president and chief executive officer of California-based Halozyme. While not yet a vendor, proof-of-concept trials are underway for Halozyme's proprietary, Enhanze Technology, an enzyme-based drug delivery platform of recombinant human hyaluronidase (rHuPH20) intended for use in combination with large molecule injectables. Mr. Lim explained, "The mechanism of action of hyaluranidase is to break down hyaluronic acid (HA) which is a cement-like substance found in tissues throughout the body." The activity of rHuPH20 temporarily opens up 200nm pores in this barrier, allowing co-injected drugs to get into the blood stream more efficiently. Then, because of the enzyme's brief half-life, healthy HA is replenished within 24 hours.
"Using Enhanze we can create superior pharmacokinetic profiles. For instance, we can take a monoclonal which normally has a serum bioavailability in the 40% range and we can increase that up to about 95%." The technology may also allow biologics that are normally administered IV be dosed subcutaneously. Either way, as biologics inevitably become vulnerable to generic poaching, such novel combinations will delay a brand from becoming an endangered species.