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By Malorye Branca

May 15, 2003 | The CEOs are likely still holding their breath and keeping their fingers crossed, but the good news about genomic drug companies’ pipelines finally seems to be outweighing the bad.

Recently, Human Genome Sciences (HGS) reported successful Phase II study results. Zymogenetics launched its first clinical trial. CuraGen received its first approval to start a trial. And Exelixis submitted its first request to initiate a trial of one of its ‘home-grown’ drugs. Small milestones like these are welcome news to an embattled industry.

For the last couple of years, genomic products either moved very slowly or fell out of pipelines almost as quickly as they got in (see “HGS Battles the Pipeline Blues,” June 2002 Bio-IT World, page 10).

Dramatic changes preceded this tentative progress. Many companies resorted to buying traditional drug candidates that were further along in development than their own genomics-based projects. A massive migration of tool companies into drug development crowded the field and increased competition for key resources, such as medicinal chemists and those pipeline-rescuing, late-stage licensing opportunities. Drug discovery partnerships, which fueled the field early on, became rare and less lucrative.

Owning both a pipeline and partners are crucial now. That’s forced many companies to restructure, laying off large proportions of their basic research staff so they can fund costly clinical trials and survive the lean times.

Hopefully, that shift hasn’t happened too soon.

The companies say they have plenty of good targets: They just need time and money to develop them. “We’ve identified the pharmaceutically tractable human genome,” says CuraGen’s Tim Shannon, senior vice president of R&D and chief medical officer.  “So we freed up resources to for clinical development.” But everyone’s watching the clock and cash reserves carefully.

It’s also getting harder to distinguish genomic products from other kinds of drugs because genomic tools have infiltrated many R&D departments to some degree. Genomics firms are using a wider mix of technologies, as well. “We use anything we can get our hands on,” says Raul Rodriguez, senior vice president of business development and commercial operations at Rigel Pharmaceuticals. “The key is not one tool, but how you use many.”

Despite so much negative publicity about genomics’ lax productivity to date, some companies are unabashedly holding onto the label. Exelixis, HGS, Millennium Pharmaceuticals and others still point to genomic tools, such as gene expression analysis and sequence databases, as giving them an edge in the race to create new drugs.

Such companies resent the notion that genomics did not accelerate drug discovery. Rigel, Rodriguez points out, has only 135 employees and is on track to file two investigational new drug applications (INDs) a year. “Even half that rate would normally be considered incredible productivity,” he says.

“Genomics has advanced drug discovery and development,” says William Haseltine, CEO of HGS.  He claims improper “implementation and integration” have made it appear otherwise. “Look at us. We have generated nine of the 10 genomic drugs that have gone into clinical trials.”  HGS had to abandon one of those drugs because it didn’t work well enough and that compound was its most advanced candidate.

Those kinds of nasty surprises are common in the drug industry. So companies can’t boast success until they have an approved drug in hand. Genomics companies say they should be able to achieve higher-than-average success rates. “You don’t know much about how most of the drugs on the market now work,” says Rodriguez.  “But we understand our drugs’ mechanisms-of-action.” So far, that reasoning hasn’t held up for HGS or Millennium’s drugs, but too few such products have crossed into clinical trials to make a fair assessment yet.

One dilemma many genomic drug developers share is what to do with the wealth of preclinical candidates – promising new compounds or targets they’ve uncovered, but have yet to pass the critical hurdle of initial testing in humans. CuraGen has about 70 preclinical development projects, which the company alone can’t possibly afford to investigate. HGS faces a similar situation, although it has several products in early clinical trials, at least. “Our pipeline is currently too big for us to develop on our own,” says Haseltine.

Unfortunately, most big pharma companies are also rich in early stage projects. The hot commodities today are late stage candidates, and the later the better. “The inflection point, where the price went up dramatically, used to be Phase II,” said Jean George, of Advanced Technology Ventures, speaking at the recent Sachs Associates/Bloomberg conference in Boston. “Now, it’s often Phase III or later.”

Under these circumstances,  the downward pressure on pricing early stage candidates has increased. Companies selling such compounds will have to decide just how much they need the money. 

The best outcome would be if genomics-based products were not only quicker and cheaper to make, but better too. Over the next year, the first signs of this could emerge, but they may not come in the form of new drugs, thus making it more difficult to gauge the fruits of genomics.

ExonHit, for example, has used genomics -- specifically information about alternative splicing of genes -- not to find a new drug, but to find a new use for an already-marketed drug. Millennium, meanwhile, is collecting data about the genetic makeup of some patients (with their permission) in its Phase III trial of Velcade, a novel treatment for cancer.

 Although Velcade is being targeted first at a relatively rare cancer, multiple myeloma,  the company plans to quickly examine its effects in other cancers. If Millennium can develop a pharmacogenomic test to tell doctors which patients the drug will help, it may be able to speed both the FDA approval and medical adoption of the drug.

Beyond these two examples lie other cases where genomics has infiltrated drug discovery, as well as a growing number of actual genomics-based drugs. That’s a hopeful trend for the industry, because it will require many successes to restore confidence in the field. In the meantime, genomic CEOs will need all the cash they can get and nerves of steel.

Coming up next issue: Genomic Pipelines Part II.


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