By Bill Frezza
June 29, 2009 | If ever there was an industry at risk of being sunk by not one but three hurricanes, it's the pharmaceutical industry. Whether it's on the political, economic, or scientific front, this major contributor to our nation's financial and physical well being is headed for wrenching transformations.
Politically, Big Pharma is at the mercy of all three branches of an increasing hostile government. The executive branch, through its regulatory agencies, has raised the cost of product development to astronomical heights. The judicial branch, through its class action machinery, has made the penalty for delivering anything short of zero-defects untenable. And the legislative branch, on its way to becoming the industry's monopsony purchasing agent, is hell bent to drive prices down to the marginal cost of production.
Economically, Big Pharma continues to deliver less and less for more and more. A new blockbuster cancer drug is almost never a cure. The "good" ones have no effect on most patients besides making their hair fall out while helping some "fortunate" subset die in 15 months instead of 12. For some advanced biologics, this pathetic result comes with a sticker price of $100,000. The only reason there are any customers at all for products this bad is that someone else is paying the bills.
Scientifically, the classic drug discovery paradigm has reached the end of its long road. Penicillin, stumbled on by accident, was a bona fide magic bullet. The industry has since been organized to conduct programs of discovery, not design. The most that can be said for modern pharmaceutical research, with its hundreds of thousands of candidate molecules being shoveled through high-throughput screening, is that it is an organized accident. This approach is perhaps best characterized by the Chief Scientific Officer of a prominent biotech company who recently said, "Drug discovery is all about passion and faith. It has nothing to do with analytics."
Does this sound like science to you?
The problem with faith-based drug discovery is that the low hanging fruit has already been plucked, driving would be discoverers further afield. Searching for the next miracle drug in some witch doctor's jungle brew is not science. It's desperation.
The only way to escape this downward spiral is new science. Fortunately, the fuzzy outlines of a revolution are just emerging. For lack of a better word, call it Digital Chemistry.
Drug companies of the future will be built around drug design, not discovery. Scientists cross trained in engineering will run product development teams with productivity levels comparable to other industries. Compare this to today's chemist, who can spend an entire career at a pharmaceutical company without ever working on a drug that gets to market. This is not just scientifically embarrassing, it's economically indefensible.
Tomorrow's drug companies will build rationally engineered multi-component molecular machines, not small molecule drugs isolated from tree bark or bread mold. These molecular machines will be assembled from discrete interchangeable modules designed using hierarchical simulation tools that resemble the tool chains used to build complex integrated circuits from simple nanoscale components. Guess-and-check wet chemistry can't scale. Hit or miss discovery lacks cross-product synergy. Digital Chemistry will change that.
But modeling protein-protein interaction is computationally intractable, you say? True. But the kinetic behavior of the component molecules that will one day constitute the expanding design library for Digital Chemistry will be synthetically constrained. This will allow engineers to deliver ever more complex functional behavior as the drugs and the tools used to design them co-evolve.
How will drugs of the future function? Intracellular microtherapeutic action will be triggered if and only if precisely targeted DNA or RNA pathologies are detected within individual sick cells. Normal cells will be unaffected. Corrective action shutting down only malfunctioning cells will have the potential of delivering 99% cure rates. Some therapies will be broad based and others will be personalized, programmed using DNA from the patient's own tumor that has been extracted, sequenced, and used to configure "target codes" that can be custom loaded into the detection module of these molecular machines.
When it arrives, the transition to Digital Chemistry will be similar to the revolution set in motion when engineers began using transistors as switches instead of amplifiers. Over the succeeding 40 years, the semiconductor industry used the simplest of components to design increasingly more sophisticated integrated circuits whose complexity now rivals that of many of the metabolic disease pathways we hope to control.
Only Moore's Law can save Big Pharma. We better hope it arrives soon.
Bill Frezza is a partner at Adams Capital Management, He can be reached at email@example.com.