STRATEGIC INSIGHTS Rational-drug-design firms are now under patent scrutiny. But this is a good thing.
By John Garvey and Michel Morency
June 17, 2004 | Proteomics and combinatorial chemistry companies are a natural progression from genomics, offering the hope of finding leads less expensively and more rapidly than traditional medicinal chemistry. This has quickly become a race to produce large numbers of compounds with greater diversity. It took only a short while to realize that it was unworkable to screen all possible compounds against all possible targets, and that hit rates for combinatorial chemistry were quite low.
In some cases, genomics companies had found potential drug targets, but most found themselves with "junk DNA" — genes with no apparent therapeutic potential. Worse, a change in the patent laws tightened the standards for patenting genes. Some companies soon discovered that they held valuable sequences, but were unable to obtain adequate legal protection for this genetic material.
Despite legal and technical challenges, from proteomics and combinatorial chemistry companies emerged bioinformatics and cheminformatics using in silico screening methods. Today, biological research has become highly dependent on information technologies.
The advent of structural genomics has provided the impetus to combine computational technologies with chemical libraries in silico to accelerate drug design in a rational manner. These companies are using both structural models and computational techniques to design or refine therapeutics.
This approach is focused on producing compounds that have improved efficacy and better side-effects profiles. The business and scientific models of these companies are well suited for rapidly delivering products into clinical trials. According to William Carlson, president and chief science officer of Thrasos, a Massachusetts-based biotech, "Companies that are able to do computationally guided rational drug design successfully will have a distinct competitive advantage."
Computationally guided rational drug design focuses on increasing the activity spectrum of existing drugs or removing side effects, making safer and more efficacious compounds and enabling lower dosages. Whether they are developing new compounds or refining existing ones, these companies are producing compounds faster and cheaper than industry averages.
For example, in less than two years and for an investment of $2.6 million, Thrasos has been able to produce nine active candidates for acute renal failure and myocardial injury, of which three show promise for investigational new drug (IND) applications. By comparison, pharmaceutical industry averages would predict spending seven years and $160 million to advance just one candidate to an IND application.
But just as the genomics companies faced changes in the law that affected their business operations, rational drug design has come under scrutiny, too. Yet this scrutiny could actually help the sector as it matures.
In late 2002, for example, the Japanese Patent Office, the European Patent Office, and the U.S. Patent and Trademark Office published a trilateral study on protein 3-D structure-related claims. This study should provide rational-drug-design companies with a heightened degree of comfort and certainty when prosecuting patent applications, and when evaluating the strengths of their existing patent portfolios.
The respective patent offices have agreed, for instance, that a crystalline form of a protein is a patentable composition of matter. An isolated and purified polypeptide with biological activity is also patentable subject matter in most instances.
In contrast, computer models of proteins, data arrays of atomic coordinates, databases or computer-readable storage media having or encoding these coordinates or compound structures, and "pharmacophores" are not patentable or do not otherwise meet the statutory criteria for an invention. Likewise, claims to theoretical compounds developed by in silico methods are not patentable, and the offices agreed that the compounds need to be "in hand."
As companies in the computationally guided rational drug design sector mature, they should be more sure of the boundaries that surround their proprietary technologies. These companies should be successful at developing sufficient pipelines of therapeutic candidates. Refinement of existing drugs also shows promise, and offers the possibility to extend patent protection around blockbuster therapeutics.
These advantages will certainly capture investors' interests and propel these types of companies into the mainstream in the next wave of growth that is now emerging.
John Garvey is an associate with Greenberg Traurig, in Boston. E-mail: firstname.lastname@example.org. Michel Morency is a shareholder with Greenberg Traurig. E-mail: email@example.com.
Patent offices have agreed that a crystalline form of a protein is patentable matter.