Biopharmconsortium Blog

27 April 2011

Adoptive immunotherapy for metastatic melanoma?

By Allan Haberman, Ph.D|2018-12-24T22:12:14+00:00April 27, 2011|Cancer, Personalized Medicine, Strategy and Consulting|

Red blood cell, platelet, and lymphocyte

Since the publication of our March 30, 2011 article on melanoma on this blog, interest in melanoma has remained high. This is to be expected, with the March 2011 approval of ipilimumab (Medarex/Bristol-Myers Squibb’s Yervoy), and the expected approval of Daichi Sankyo/Plexxikon/Roche’s PLX4032/RG7204 in the near future.

The April 2011 issue of the Faculty of 1000’s The Scientist included two articles that focused on melanoma. The first article, entitled “Taking Aim at Melanoma”, was written by leading clinician and scientist Keith T. Flaherty, M.D., whose work (especially with respect to development of PLX4032) has been discussed in several articles on this blog. The second article, which we shall discuss further below, is entitled “Imagining a Cure”.

Then there was the American Association for Cancer Research (AACR) meeting (April 2-6, 2011, Orlando FL). This included numerous presentations on melanoma, including strategies for overcoming resistance to PLX4032 via development of combination therapies. There were parallel discussions on similar strategies in other cancers.

Haberman Associates will have a major new publication out shortly. This will (among other things) include discussions of combination therapies designed to overcome resistance to targeted therapies in several cancers, including melanoma.

The article entitled “Imagining a Cure” in The Scientist was written by National Cancer Institute (NCI) principal investigator Nicholas P. Restifo, M.D., and writer Megan Bachinski.

This article begins with what is the real desire of every cancer patient–a durable complete response, which is tantamount to a cure. In the case of patients with early-stage, localized melanoma, the disease is completely curable via surgery. However, metastatic melanoma is almost always fatal. Pre-March 2011 treatments, dacarbazine and interleukin-2 (IL-2), have reported complete response rates of 2.7 percent and 6.3 percent respectively. Even the newer treatments, ipilimumab and PLX4032, although they give improved survival over earlier treatments, only have reported rates of durable complete responses of 0.6 percent and 2.0 percent, respectively.

The authors then go on to discuss the only type of therapy that has resulted in high percentages of durable compete responses in metastatic melanoma patients–adoptive cell transfer (ACT), also known as adoptive immunotherapy. Dr. Restifo works in this area, as well as in other aspects of tumor immunology. Adoptive immunotherapy was pioneered by Steven A. Rosenberg, M.D. Ph.D., the Chief of Surgery and Head of the Tumor Immunology Section at the NCI, since the 1980s. Dr. Rosenberg remains a leader in the field, and Dr. Restifo works with him.

In ACT, a physician/researcher extracts a patient’s antigen-specific immune cells, which are usually found in tumor tissue. [Such cells are known as “tumor infiltrating lymphocytes” (TILs).] He or she then expands the numbers of the antitumor T lymphocytes in cell culture, using the T-cell growth factor, IL-2. The physician/researcher then infuses the cells, plus IL-2, intravenously into the patient. The infused T cells traffic to tumors and can mediate their destruction. Prior to TIL infusion, the patient may have his or her immune system temporarily ablated via “preparative lymphodepletion” with chemotherapy and sometimes also total-body irradiation. The preparative lymphodepletion treatment is associated with enhanced persistence of the transferred TILs.

In a recent clinical study of ACT, the treatment resulted in the disappearance of all tumors in 20/93 patients (21.5%) with advanced metastatic melanoma. For 19 of these 20 patients (95%), the complete responses have been durable and long-lasting, in some cases lasting for over 7 years. (See also the Faculty of 1000 evaluation.) Research on the mechanistic basis of adoptive immunotherapy, as well as on means to improve ACT technologies, is ongoing, so there is the potential to improve the durable complete response rate further.

Adoptive immunotherapy is not the only cancer immunotherapy that is in clinical studies or on the market. The newly-approved ipilimumab is a nonspecific T-cell modulator. Then there are the therapeutic cancer vaccines, including sipuleucel-T (Dendreon’s Provenge), which was approved for treatment of prostate cancer in 2010, as well as other cancer vaccines in clinical trials. Sipuleucel-T, which costs about $93,000, provides only a modest survival benefit (in one Phase 3 trial, 25.8 months compared to 21.7 months for placebo-treated patients) and is not associated with tumor regression. Overall, cancer vaccine clinical trials have resulted in an overall response rate of less than 4 percent. There have been no complete responses.

The authors of the article ask the following questions: If adoptive immunotherapy for metastatic melanoma has such a high durable complete response rate, why is it only available in a small number of cancer canters worldwide? Why is there little commercial interest in developing ACT? What can be done to facilitate the more widespread adoption of adoptive immunotherapies?

The authors give the following explanations: Adoptive immunotherapies are still considered experimental, are not FDA-approved, and are not paid for by third party payers. Thus only a handful of locations can bear the financial burden of administering adoptive immunotherapy. However, if a cancer center has a cell production facility with the required staff, the cost of producing a single dose of T-cells for adoptive transfer is approximately $20,000, much lower than a full course of Provenge or ipilimumab (approximately $120,000) treatment. ACT treatment also entails factoring in the cost of hospitalization. Most patients only require a single dose, however.

Adoptive immunotherapy is also comparable or less expensive than the cost of other, non-immunotherapy antitumor biologics, such as bevacizumab (Avastin) or cetuximab (Erbitux)—where the cost of the drug alone can exceed $80,000, and no patients are cured.

Moreover, according to the article, it would be difficult for a private company to pursue clinical trials for FDA approval and commercialization of ACT. To conduct such trials, a company would need to build a specialized cell processing and treatment facility, with a highly trained and competent staff. Adoptive immunotherapies also appear to lack a clearly defined claim to intellectual property (IP), since the patient’s own cells are not a “drug” to be patented. Nevertheless, Provenge also uses the patient’s own cells (in this case, antigen-presenting dendritic cells), and must be prepared specifically for each patient. In the case of Provenge, the cells are combined with a proprietary antigen/growth factor fusion protein (PA2024), however.

In the case of adoptive immunotherapies, various technologies for TIL isolation, selection, and expansion might be patentable, as might the use of genetically-engineered antitumor T cells.

The public sector might, according to the article’ authors, provide an alternative sponsor for adoptive immunotherapy. A network of cancer centers, institutes, and hospitals might form a consortium to refine ACT technology, and sponsor clinical trials aimed at FDA approval. Such FDA approval might provide substantial financial benefits for institutions in the consortium.

Moreover, research is underway to expand the types of cancers to be treated via adoptive immunotherapy. This research involves adoptive immunotherapy for synovial-cell sarcomas, B-cell lymphomas, and renal cancer. The expansion of adoptive immunotherapy beyond melanoma might, according to the authors, bring in new groups of stakeholders with an interest in making this type of treatment more widely available. Moreover, it might also encourage corporate and/or nonprofit organizations to envision the possibility of treating more common cancers, with the potential for larger financial rewards.

Given the superior results in terms of durable complete responses and comparable costs to other types of metastatic melanoma treatments, and the potential to treat other cancers, adoptive immunotherapy should not be ignored. However, it faces considerable hurdles to its widespread adoption.

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30 March 2011

FDA approves ipilimumab (Medarex/Bristol-Myers Squibb’s Yervoy) for treatment of metastatic melanoma

By Allan Haberman, Ph.D|2018-11-14T00:12:52+00:00March 30, 2011|Animal Models, Cancer, Drug Development, Drug Discovery, Strategy and Consulting|

Melanoma

On March 25, 2011, the FDA approved ipilimumab (Medarex/Bristol-Myers Squibb’s [BMS’s] Yervoy) for treatment of unresectable or metastatic melanoma. The drug has been approved for patients with either newly-diagnosed or previously-treated disease.

According to Richard Pazdur, the director of the FDA’s office of oncology drug products, none of the previously-approved treatments for metastatic melanoma, a disease with a poor prognosis, prolonged a patient’s life. “Yervoy is the first therapy approved by the FDA to clearly demonstrate that patients with metastatic melanoma live longer by taking this treatment.”

We discussed ipilimumab briefly in a previous article on this blog. As we stated in that article, the results of a Phase 3 trial of ipilimumab were published in the August 19, 2010 issue of the New England Journal of Medicine. Ipilimumab is an immunomodulator that blocks cytotoxic T-lymphocyte-associated antigen 4 (CTLA4) to potentate an antitumor T-cell response. The drug is a monoclonal antibody (MAb). In this NEJM article, the researchers reported that ipilimumab treatment–given with or without a gp100 peptide vaccine–showed a median overall survival of 10 months, as compared to 6.4 months in patients receiving gp100 alone. Ipilimumab treatment also gave improved one-year survival compared with gp100 alone–46% versus 25%. Two-year survival was 24% in the ipilimumab group and 14 percent in the gp100 group.

Decision Resources published our report on development of immunomodulators in treatment of cancer in 2007. This report includes a discussion of ipilimumab, and provides further information on its mechanism of action, adverse effects, etc., as well as on other immunomodualtors for treatment of cancer, some of which are now on the market.

BMS plans to report on the results of a later Phase 3 study, which also demonstrated significantly improved survival as compared to a control treatment, at the American Society of Clinical Oncology (ASCO) meeting in Chicago in June.

In its March 25, 2011 press release, BMS said that it had agreed with the FDA to conduct a post-marketing study comparing the safety and efficacy of the 3 mg/kg dose vs. an investigational 10 mg/kg dose in patients with unresectable or metastatic melanoma.

The Full Prescribing Information for ipilimumab will include a boxed warning for immune-mediated adverse effects. Ipilimumab treatment can result in severe or fatal immune-mediated adverse effects, especially enterocolitis, hepatitis, dermatitis, neuropathy, or endocrinopathy. These are usually reversible by discontinuing ipilimumab therapy and treatment with high-dose steroids. According to the FDA, severe to fatal autoimmune reactions were seen in 12.9% of patients treated with the drug.

As part of the approval of ipilimumab, BMS is collaborating with the FDA to develop a Risk Evaluation and Mitigation Strategy, to help inform patients and providers about these safety risks. The company has put in place a system that will enable it to deliver these educational materials to healthcare professionals at the time they order the drug.

Strategic implications for BMS

BMS has hailed the approval of ipilimumab as a victory for its strategic changes over the past several years. The company has been focusing on its pharmaceutical business, selling off such nonpharmaceutical assets as the Mead Johnson Nutrition Company (MJN), and instituting other cost-cutting measures. BMS has at the same time been developing its “String of Pearls” strategy. In this strategy, BMS has been forming a series of acquisitions, alliances and partnerships with biopharmaceutical companies, involving both small molecules and biologics. According to BMS, the String of Pearls strategy has enabled BMS to expand its pipeline by nearly 40 percent. About one-third of BMS’ pipeline drugs are now biologics.

We have discussed the String of Pearls strategy, and two acquisitions that have been part of it, on this blog. These were the acquisition of Medarex (the largest of the “pearls”), and the newest acquisition, ZymoGenetics. It was MAb-therapeutic leader Medarex, now a wholly-owned subsidary of BMS, that initially developed ipilimumab.

BMS faces the expiration of patent protection for its best-selling product, the anticlotting drug Plavix, in 2012. The introduction of ipilimumab, which several analysts expect to become a blockbuster, should help mitigate the results of the Plavix patient expiration. However, ipilimumab is not likely to fully replace the lost sales due to generic competition with Plavix. Moreover, the approval of one drug–ipilimumab–does not necessarily mean that BMS’ new R&D strategy, based on the String of Pearls acquisitions and partnerships, will yield a rich series of important approved drugs in the next 5-10 years. However, ipilimumab itself is such an important drug, in terms of its path-breaking mechanism of action, its addressing unmet medical need in a fatal disease, and its likely blockbuster status.

Another melanoma drug is on the way

The Biopharmconsortium Blog has been following the development of Daichi Sankyo/Plexxikon/Roche’s PLX4032/RG7204 (now designated as vemurafenib) for about a year. We have published several articles on the drug and on related scientific, clinical trial strategy, and business issues. This targeted kinase inhibitor, which is exquisitely specific for the melanoma driver mutation B-Raf(V600E), has been in Phase 3 clinical trials, and its developers filed for U.S. and European approval in May 2011. The drug is expected to reach the market in 2012. As with ipilimumab, Plexxikon and Roche reported that a Phase 3 trial of PLX4032 gave enhanced overall survival as compared with treatment with the standard of care, dacarbazine. The companies also plan to present the results of this trial at the ASCO meeting in June.

Metastatic melanoma patients, who have had few options for treatment, will now have two new, breakthrough drugs that can give them additional months of life, and in some cases longer. However, no treatment now on the horizon will result in long-term survival. In the case of PLX4032, this is due to the development of resistance to the drug. As we discussed previously, researchers are studying mechanisms of PLX4032 resistance, and developing potential combination therapies to overcome it. A clinical trial of at least one combination therapy, in collaboration with Genentech, is planned to begin soon.

A new approach to PLX4032-based combination therapy for melanoma

Meanwhile, another approach to development of an effective combination therapy with PLX4032 comes from an unexpected source.

We had discussed a zebrafish model of melanoma, developed by Leonard Zon’s laboratory at Children’s Hospital/Howard Hughes Medical Institute/Harvard Medical School (Boston, MA), in our 2010 Insight Pharma Report Animal Models for Therapeutic Strategies. In this model, the researchers created transgenic zebrafish strains in which B-Raf(V600E) is expressed under control of the melanocyte-specific mitfa promoter. Wild-type zebrafish expressing B-Raf(V600E) in their melanocytes developed benign nevi, while those with germline mutations in p53 may develop either nevi or melanomas. This suggests these two mutations are necessary, but not sufficient, to cause melanoma. (In humans, nevi may express B-Raf(V600E), which also indicates that it is not sufficient to cause melanoma. And in human melanomas, p53 is either mutated or otherwise rendered inactive.)

Now, in the 24 March issue of Nature, Dr. Zon and his colleagues used this model to study the mechanism of tumorigenesis in melanoma. They found that early-stage embryos of the transgenic zebrafish showed abnormal expansion of neural crest progenitors, and that these progenitors failed to terminally differentiate. (Melanocytes are one of the cell types that develop from the neural crest lineage.) In adult transgenic zebrafish, melanomas develop and are positive for neural crest progenitor markers, and thus appear to retain a neural crest progenitor-like phenotype.

The researchers therefore screened 2,000 compounds to identify those that act as suppressors of neural crest progenitors, without displaying toxicity. The one compound that satisfied these criteria, NSC210627, was similar to brequinar, an inhibitor of dihydroorotate dehydrogenase (DHODH), and NSC210627 also inhibited DHODH in vitro. The researchers therefore tested another more readily-available DHODH inhibitor, leflunomide (Sanofi-Aventis’ Arava). It had the same effects on the zebrafish as NSC210627 and was used for further studies.

Leflunomide treatment resulted in a nearly complete inhibition of neural crest development in zebrafish embryos, and specifically resulted in abrogation of melanocyte development both in zebrafish embryos and in Xenopus (African clawed frog) embryos. The drug’s target, DHODH, catalyzes a step in the synthesis of pyrimidine nucleotides, and thus inhibits transcriptional elongation. The researchers found that leflunomide caused specific defects in the transcriptional elongation of genes necessity for neural crest development in zebrafish. In human melanoma cell lines, leflunomide also inhibited transcriptional elongation in genes necessary for neural crest development and for melanoma growth (e.g, the Myc oncogene, which is required for both processes). Leflunomide (or its active metabolite, A771726) caused inhibition of growth both of human melanoma cell lines in vitro and in vivo in mouse xenograft models, but had little effect on non-melanoma cell lines in vitro. Combined treatment with leflunomide and PLX4032 showed even greater inhibition of growth of human melanoma cells in vitro and in vivo than treatment with either single agent.

Leflunomide is a marketed drug that is approved for treatment of moderate to severe rheumatoid arthritis and psoriatic arthritis. In these diseases, it appears to work via inhibiting the expansion of autoimmune lymphocytes by inhibiting transcriptional elongation in specific genes in these cells. Although leflunomide can have serious adverse effects in a minority of patients (e.g., liver damage), it has a generally favorable safety profile. Dr. Zon and his colleagues suggested that combination therapy of patients whose tumors are positive for B-Raf(V600E) with PLX4032 and leflunomide would be more effective than treatment with either drug alone, and that this combination therapy might help to overcome PLX4032 resistance.

Since leflunomide is already approved by the FDA, and both leflunomide and PLX4032 have been proven to be safe in clinical trials, researchers should be able to readily initiate clinical trials of the combination therapy. Dr. Zon says that he is now working toward initiation of a clinical trial of the drug combination.

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19 March 2011

For the people of Japan

By Allan Haberman, Ph.D|2011-03-19T00:00:00+00:00March 19, 2011|About Our Blog|

On March 3, 2011, we posted an article on this blog on the acquisition of Plexxikon by Daiichi Sankyo.

Then on March 11, 2001, came the 9.0-magnitude Tōhoku earthquake, followed by the devastating tsunami, with the loss of thousands of lives, and extensive damage to the infrastructure of Japan. Particularly troubling is the damage to the Fukushima I nuclear power plant, as well as several other nuclear power plants in Japan, and the uncertainty as to current and future effects of these events on Japan and its people. Also devastating is the economic loss due to the earthquake.

I cannot look at our blog post without thinking about the continuing events in Japan. Our thoughts and prayers are with the Japanese people in their hour of need.

According to a March 14 2011 news release, several employees suffered minor injuries, but all are safe. Two Daiichi Sankyo production facilities in Japan have been partly damaged by the earthquake. The company will assess the situation at these plants–especially with respect to employee safety–as power is restored. Several Daiichi Sankyo sales facilities were also affected by the earthquake, and with employee safety as its first priority, the company will work to restore operations.

The acquisition of Plexxikon by Daiichi Sankyo is on schedule to close at the end of 2011.

Meanwhile, Daiichi Sankyo announced that it would donate 100 million Japanese Yen (JPY) (approximately $1.2 million) to the Japanese Red Cross Society, as well as medical supplies, for relief efforts; it has also implemented a matching gift program for employee donations. Takeda will donate 300 million JPY, as well as medical supplies, and Eisai will donate 200 million JPY and will establish a crisis center in the Tōhoku region. Astellas and Chugai are both donating 100 million JPY.

Non-Japanese Big Pharma and Big Biotech companies–Merck, Abbott, Lilly, GlaxoSmithKline, Johnson & Johnson, and Amgen–are each contributing over $1 million to Japanese aid. Many other corporations outside the pharmaceutical industry have pledged donations for Japanese relief.

The Japanese and American Red Cross, as well as many other secular and religious relief agencies, are assessing the situation in Japan and requesting donations.

Meanwhile, the Japanese people are behaving admirably in this crisis. There has been little or no looting or profiteering, and there is a sense of national cooperation. The resilience of the Japanese people, and their engineering skill and experience in rebuilding from previous disasters, will contribute mightily to Japan’s ability to rebound from this devastating earthquake and tsunami.

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Addendum, March 27, 2011: See the news article in the 22 March 2011 issue of Nature, entitled “The meltdown that wasn’t”. According to this article, the operators in unit 1 of the Fukushima Daiichi nuclear power station acted competently and courageously in dealing with the effects of the earthquake and tsunami on the reactor on 11 March, 2011. They averted a catastrophic full meltdown of the reactor, and their actions also provided a model for stabilizing the other two reactors at the station.

Radiation exposure due to the Fukushima nuclear accident continues, however, as do the other effects of the earthquake and tsunami on Japan and her people.

For Nature’s full coverage of the continuing story of the Japanese earthquake and nuclear crisis, see http://www.nature.com/news/specials/japanquake/index.html.

3 March 2011

Plexxikon acquired by Daiichi Sankyo

By Allan Haberman, Ph.D|2011-03-03T00:00:00+00:00March 3, 2011|Cancer, Drug Development, Drug Discovery, Personalized Medicine, Strategy and Consulting|

On March 1, 2011, Plexxikon, Inc. (Berkeley, CA) announced that it has agreed to be acquired by Daiichi Sankyo, Japan’s third-largest pharmaceutical company, via an all-cash purchase. Under the merger agreement, Daiichi will pay $805 million up-front to purchase Plexxikon. Near-term milestone payments associated with the approval of Plexxikon’s lead drug candidate PLX4032 could total an additional $130 million.

The main driver for the merger is Plexxikon’s lead drug, PLX4032, for the treatment of metastatic melanoma. Plexxikon and its development and commercialization partner Roche/Genentech expect to file for U.S. and European approval of PLX4032 this year; the drug is expected to reach the market in 2012. By acquiring Plexxikon, Daiichi will gain the right to co-promote the drug in the U.S. with Genentech. PLX4032 is a novel oral drug that specifically targets B-Raf kinase carrying the V600E mutation, which is present in the majority of human melanomas.

We have been covering the development of PLX4032 on the Biopharmconsortium Blog. Our most recent article, “Phase 3 trial of targeted anticancer drug PLX4032/RG7204 shows overall survival benefit in melanoma patients”, was posted on January 23, 2011. That article, which discusses the successful Phase 3 trial of PLX4032 (which Roche has designated as RG7204), includes a list of links to our earlier articles. The Phase 3 trial showed that treatment with PLX4032 gave enhanced overall survival as compared with dacarbazine (the standard of care) in previously untreated metastatic melanoma patients carrying the B-Raf(V600E) mutation. Although previous studies showed tumor shrinkage and enhanced progression-free survival (by approximately seven months) in the majority of PLX4032-treated patients as compared to dacarbazine, this is the first report that PLX4032 give enhanced overall survival.

PLX4032 is a personalized medicine, which Plexxikon has planned to pair with a companion diagnostic, developed in partnership with Roche Molecular Diagnostics. The DNA-based companion diagnostic will identify patients whose tumors carry B-Raf(V600E). The companies plan to launch PLX4032 together with the companion diagnostic, so that oncologists can readily identify patients who would benefit from treatment with the drug.

In acquiring Plexxikon, Daiichi also gains a pipeline that includes the kinase inhibitor PLX3397, which is in Phase 1 safety studies, with Phase 2 studies planned in metastatic breast cancer, and PLX-204, an oral PPAR alpha, gamma, and delta partial agonist that is In Phase 2 clinical trials in type 2 diabetes.

Daiichi will also gain Plexxikon’s drug discovery and development technology and strategy. We discussed how Plexxikon used its proprietary scaffold-based drug design technology platform to discover PLX4032, in our March 10, 2010 article on this blog. Daiichi says that it plans to “provide a high degree of independence to the Plexxikon group to support their continuing success,” and to leverage Plexxikon’s technology platform to discover and develop newer drug candidates.

Daiichi’s purchase of Plexxikon is part of a recent trend, in which the leading Japanese pharmaceutical companies have been investing in oncology R&D in the United States. Two of these investments were large acquisitions. In 2008, Takeda acquired Millennium Pharmaceuticals (Cambridge, MA) for $8.8 billion; Takeda operates its acquisition, renamed Millennium: The Takeda Oncology Company, as a wholly-owned subsidiary. Astellas acquired OSI (Melville, NY) for $4 billion in 2010; OSI also operates as a wholly-owned subsidiary. Both of the acquired companies boast large-selling drugs–Millennium’s Velcade (bortezomib) and OSI’s Tarceva (erlotinib) (which is partnered with Genentech/Roche).

The Japanese pharmaceutical companies aim to utilize U.S. innovation to compete in the lucrative global oncology market, which analysts project will expand 12 to 15 percent per year, reaching as much as $80 billion by 2012. In contrast, annual sales growth for Japanese pharmaceutical companies is projected to average 1.4 percent from 2009 to 2015. Overseas investments by Japanese companies are also being driven by a strong yen; the yen gained 8 percent gain over the dollar during the past year.

Some analysts believe that Daiichi paid too much for Plexxikon, and that even with the Plexxikon acquisition, Daiichi will not be very competitive in oncology with Takeda and Astellas, each of which acquired much larger U.S. oncology companies. Moreover, Daiichi has other issues to deal with, such as slow sales for its oral antiplatelet agent Effient (Prasugrel) (codeveloped with Lilly, and approved in 2009), which Daiichi hoped would be a blockbuster drug. Moreover, Daiichi’s majority-owned Indian generic drug company Ranbaxy has experienced a fourth-quarter loss due to rising operating expenses.

In addition to its acquisition of Plexxikon, Daiichi is also codeveloping (with ArQule, of Woburn MA) ARQ 197, a c-Met kinase inhbitor; this compound is in Phase 3 clinical trials in non-small cell lung cancer (NSCLC). Daiichi also acquired German oncology firm U3 Pharma (Martinsried, Germany) for $235 million in 2008. U3 Pharma (which operates as a wholly-owned subsidiary of Daiichi) is developing MAb-based anticancer therapies. Daiichi also, in 2007, licensed Japanese development and commercialization rights to Amgen’s MAb drug denosumab. Denosumab, marketed as Xgeva, was approved in the U.S. in 2010 for prevention of skeletal-related events in patients with bone metastases of solid tumors.

Will the acquisition of Plexxikon help Daiichi to compete in the worldwide oncology market, with its Japanese rivals and with other pharmaceutical companies? Only time will tell. PLX4032 is an exciting, breakthrough medicine that is likely to be approved in 2012. Moreover, if Daiichi allows Plexxikon the freedom to innovate and invests in its R&D activity, and if it can also harness Plexxikon’s technology platform to discover and develop novel drugs across different therapeutic areas, the Plexxikon acquisition may prove to be a major competitive advantage despite its small size.

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16 February 2011

Pfizer makes massive R&D cuts, and exits RNAi and regenerative medicine therapeutics

By Allan Haberman, Ph.D|2018-12-03T23:50:24+00:00February 16, 2011|RNAi, Stem Cells, Strategy and Consulting|

Piwi-siRNA base pairing. Source: Narayanese http://bit.ly/eEtQQR

In our November 23, 2010 blog post, we discussed Roche’s November 2010 R&D cuts, especially its decision to discontinue R&D in RNAi therapeutics. This had followed closely on the October 2010 publication of our report RNAi Therapeutics: Second-Generation Candidates Build Momentum (Insight Pharma Reports, Cambridge Healthtech Institute). Our report included a discussion of Big Pharma efforts in therapeutic RNAi R&D, specifically including Roche.

Now a second Big Pharma with a significant internal therapeutic RNAI R&D project area covered in our report, Pfizer, announced on February 1, 2011, that it was exiting therapeutic RNAi R&D. This was a small part of a global R&D restructuring plan aimed at saving the company $1.5 billion. The new R&D cuts at Pfizer will eliminate an estimated 3500 jobs worldwide, and will close Pfizer’s large R&D facility in Sandwich, U.K. (eliminating 2400 jobs) and eliminate 1100 jobs at its large R&D facility in Groton, Connecticut.

In addition to exiting RNAi therapeutics research, Pfizer is also discontinuing most of its regenerative medicine research. Both research groups are located at the company’s Memorial Drive laboratory in Cambridge, MA, which will be closed, resulting in approximately 100 layoffs.

Other areas to be discontinued include allergy and respiratory medicine and internal medicine (located in Sandwich), and antibacterials (located in Groton). Pfizer will focus its R&D efforts in neuroscience, cardiovascular, metabolic and endocrine diseases, inflammation and immunology, oncology, and vaccines. The company will create new units in pain and sensory disorders, biosimilars, and Asia R&D. Pfizer’s regenerative medicine group in Cambridge, UK (which had been focusing on development of preclinical embryonic stem (ES) cell-based ophthalmology therapies, in collaboration with the University of London) will be folded into the new pain and sensory disorder research unit.

Although Pfizer will be closing the Memorial Drive laboratory in Cambridge, MA, it intends to expand its R&D efforts in Cambridge/Boston, creating an estimated 450 new jobs. Cardiovascular and neuroscience units will be moved from Groton to a new facility (yet to be acquired or built) in Cambridge/Boston. Pfizer will also maintain its manufacturing and research facility in Andover, MA, which specializes in biologics. Pfizer plans for its R&D units in Cambridge/Boston to interact more intensively with the local biomedical research and entrepreneurial community.

Pfizer’s Sandwich laboratories have long served as the company’s center for small-molecule drug discovery. Researchers at Sandwich discovered such drugs as the erectile dysfunction treatment Viagra, the blood pressure medicine Norvasc, and the antifungal Diflucan.

According to company spokespeople, it is possible that Pfizer might partner, out-license, or spin off some of its discontinued research programs. And some venture capitalists also expect to see new biotech companies emerge, at least from the Sandwich site.

This latest Pfizer R&D restructuring is on top of the 15% of its 128,000 employees Pfizer laid off over the past two years after its acquisition of Wyeth. In late 2009, the company said it was closing six of its 20 research sites as it reduced its R&D operations by 35%. A major factor in the latest round of layoffs and facility closings is the impending loss of patent protection (in Novemer 2011) for Pfizer’s largest-selling drug, the cholesterol-lowering agent Lipitor (atorvastatin). This is coupled with Pfizer’s R&D productivity deficit, and resulting inability to bring enough large-selling drugs to market to maintain its growth.

According to Pfizer’s new CEO, Ian C. Read, “The most fundamental question that Pfizer has to fix is our innovative core. This [restructuring] is the start of fixing that in a way that will give us consistent productivity in our innovation.” Read further says that the company’s goal is to stop putting resources into high-risk areas that provide a low return on investment or where Pfizer lacks the expertise to compete.

Pfizer’s exit from RNAi and regenerative medicine: the issue of technological prematurity

The RNAi therapeutics research and biotech company community, is as expected focused on Pfizer’s discontinuation of its efforts in this area. Even the New York Times has echoed this emphasis, with an article that is marred by several erroneous statements. [For example, in humans the RNAi pathway, although one of its functions is defense against viruses (as stated in the article), is mainly involved in a fundamental process of cellular regulation, principally via microRNAs.] Pfizer’s exit from the RNAi therapy field comes on the heels of the discontinuation of therapeutic RNAi research at Roche, and of Novartis’ termination of its 5-year partnership with Alnylam. According to Dirk Haussecker’s RNAi Therapeutics blog, Big Pharmas have decided to exit internal development of RNAi technologies and drugs, and to wait to partner with or acquire RNAi specialty companies as their RNAi therapeutics programs yield meaningful clinical results. (Even Pfizer already has two external RNAi collaborations, with Quark and Tacere.) Dr. Haussecker himself plans to blog less, and only resume blogging as clinical results come in.

Despite this focus on Pfizer’s RNAi discontinuation by RNAi researchers and some journalists, Pfizer’s exit from RNAi therapeutics R&D is a small part of the company’s restructuring. It should therefore be put into the context of the strategic intent of the company’s restructuring as a whole. From our point of view, it is significant that Pfizer is discontinuing not only RNAi therapeutics R&D, but also regenerative medicine R&D.

The very first article on this blog, dated July 13, 2009, is entitled “RNAi, embryonic stem cells, and technological prematurity”. Both RNAi therapeutics and ES cell research (the latter of which includes induced pluripotent stem cells as well as ES cells per se, and which is the basis for Pfizer’s regenerative medicine R&D) are technologically premature, or at the very least very early-stage technologies. (Regenerative medicine based on adult stem cells is also technologically premature.) As the New York Times article–among others–points out, monoclonal antibody (MAb) therapeutics took 20 years from the time of the discovery of MAbs to achieve market success, and RNAi therapeutics might have a similar timeline. So might regenerative medicine based on stem cell technology.

However, a premature technology is not simply a technology that takes a long time to be translated into successful products. It is a technology that requires development of enabling technologies to overcome hurdles to development, and to move the technology up the development curve. MAb therapeutics represented a classic case of a premature technology. We discussed the history of the MAb therapeutics field in our September 28, 2009 blog article. Successful enabling technologies for MAb therapeutics began to be developed in the early 1980s, by biotechnology companies and by academic laboratories. Some of these companies eventually became leaders in the MAb field.

Arguably the most successful MAb development company, Genentech, developed enabling technologies in collaboration with academic researchers beginning in the early 1980s. But Genentech’s first MAb products, the highly successful antitumor agents Rituxan (codeveloped with Idec) and Herceptin, did not reach the market until 1997 and 1998, respectively. Roche purchased a majority stake in Genentech in 1990, when Genentech needed an infusion of capital to complete clinical development of its MAb products. In 2009, Roche moved to fully acquire Genentech, which now operates as a wholly-owned subsidiary. Most of the other leaders in the MAb therapeutics field were acquired by Big Pharmas or Big Biotechs in the late 1990s, after the MAb field became successful.

The take-home lessons for RNAi therapeutics and stem cell-based regenerative medicine R&D are that enabling technologies are necessary to move these fields up the technology development curve as well. In the case of RNAi therapeutics, specialty biotech companies in that area have been busy working on such enabling technologies, in two principal areas–design of the oligonucleotide molecules themselves, and delivery technologies. With respect to oligonucleotide design, certain types of chemical modifications enabled researchers to develop siRNAs (small interfering RNAs) that do not trigger an innate immune response. The immunogenicity of early siRNA drug candidates was a significant hurdle to the development of siRNA therapeutics. The New York Times article sounds as if the problem of immunogenicity of siRNAs has not been overcome, which is not true.

Ironically, the article quotes Arthur Krieg, the head of the RNAi group at Pfizer, in support of this contention. But although Dr. Krieg did the studies quoted in the article that showed the extent of the problem of immunogenicity in early siRNA candidates, he himself is one of the researchers who developed means to overcome this problem. Dr. Kreig came to Pfizer via the company’s 2008 acquisition of Coley Pharmaceuticals, where he was the head of R&D. Coley was focused on developing RNA-based immunotherapeutics, so Dr. Kreig is a leader in the field of RNA-mediated immunogenicity. As a result of the Coley acquisition, Pfizer has been developing oligonucleotide vaccine adjuvants, which are now in Phase III trials and have been licensed to GlaxoSmithKline.

Even when enabling technologies that ultimately prove to be successful have been developed, it typically takes many years before this produces promising clinical results, let alone approved drugs. The example of Genentech, which developed its patented MAb enabling technology platform in the early 1980s, but produced no marketed drugs based on that technology platform until the late 1990s, is illustrative of this point. (Of course, the long timeline to produce any marketed drug, from initial drug discovery to approval, is a large part of the reason for this time gap.) Therefore, any company that undertakes to develop products based on an exciting, but premature, technology must be both highly creative and very patient–and have patient capital behind it. An infusion of capital as such a company moves into the clinical phase–as with Roche’s 1990 equity investment in Genentech, helps as well.

The reward for companies that develop products based on a premature technology is that such a company may become a leader in an important new area of technology, with a large market. However, the risk of undertaking such a course of action is high.

As we discussed in our 2010 RNAi therapeutics report, Big Pharma was interested in getting into RNAi therapeutics, despite the field’s risks, in part because of its past experience with MAbs and other biologics. Because Big Pharma companies had failed to get into the now highly successful biologics field early, acquiring a major stake in that field had been expensive. Seeing the promise of RNAi therapeutics, Big Pharmas were therefore eager to get into RNAi therapeutics early, in the hope of capturing a commanding position in the field once drugs reached the market.

However, with any RNAi drugs still far in the future, and with their increasing short-term pressures, Big Pharmas have been losing the needed patience to continue with a technologically premature field like RNAi therapeutics. Therefore. their interest has been cooling. As (according to the New York Times article) Klaus Stein, head of therapeutic modalities for Roche, said, “I have no doubt that at a certain point in time RNAi will make it to the market….[but] when we looked into this, we came to the conclusion that we have opportunities that have higher priorities.”

Meanwhile, R&D and dealmaking continues in the small RNAi and microRNA specialty companies. For example, on February 3, 2010, it was announced that RNAi specialty firm Marina Biotech (Bothell, WA) entered into an agreement with Swiss biotech development group Debiopharm to develop and commercialize Marina’s preclinical RNAi-based therapy for bladder cancer. The deal is worth up to $25 million to Marina, based on predefined R&D milestones and royalties on the sales of products resulting from the agreement. Also in February 2010, Marina raised $5.1 million in a new public offering, and plans to use the proceeds to fund development of a drug candidate for familial adenomatous polyposis (FAP).

Preclinical and clinical studies are also continuing at such leading RNAi or microRNA therapeutics companies as Alnylam, Tekmira, Quark, RXi, Silence, Calando, Dicerna, Regulus, Santaris, and miRagen. If and when the products of these companies reach late-stage trials or commercialization, Big Pharmas may have to partner for or acquire these products or companies on a similar basis as for biologics in the last decade. A key question is whether the RNAi/microRNA therapeutic sector can raise enough capital to fund its R&D, now that several Big Pharmas’ exit from the field appears to have dampened investors’ interest.

Pfizer’s restructuring strategy as a whole

As for Pfizer’s restructuring as a whole, we discussed the Big Pharma strategy of attempting to deal with loss of revenues from aging blockbusters and the lack of R&D productivity via megamergers, restructuring, and outsourcing in our February 19, 2010 blog post. Earlier megamergers, such as Pfizer’s acquisitions of Warner-Lambert in 2000 and of Pharmacia in 2002, followed by restructurings, enabled Pfizer to acquire blockbuster products (including Lipitor) and to realize significant cost savings from staff reductions. However, the continuing lack of productivity in R&D and the looming patent expiration of Lipitor and other large-selling drugs, motivated Pfizer management to enter into yet another megamerger, with Wyeth in 2009.

However, the Wyeth acquisition has not altered Pfizer’s fundamental issues. R&D productivity remains low, and Pfizer is the Big Pharma company that is most affected by upcoming patient expirations. Patent expirations are expected to expose approximately two-thirds of Pfizer’s total sales to generic competition over the next three years. This is mainly due to Pfizer’s dependence on revenues from Lipitor.

Meanwhile, Pfizer is maintaining its stock price not only by R&D retrenchment, but by spending $5 billion to buy back its own stock. The combination of cutting R&D and stock buy-backs is popular with investors. As of February 4, Pfizer’s stock was up 5.2% since the February 1 announcement of the R&D cuts and stock buy-back. In contrast, Merck’s new CEO Ken Frazier said on February 3 that that company would not make the cuts necessary to meet its long-term earnings forecasts. Instead, it would focus on investing in pharmaceutical R&D to drive future growth. Merck’s stock dropped 2.7% that day. However, Pfizer’s stock buy-back and R&D cuts only provide temporary relief, since they do not alter the fundamentals.

Meanwhile, the “other Merck”, Merck KGaA (Darmstadt, Germany), is expanding its R&D. This includes expansion of the company’s facility in Billerica, MA, where it will hire about 100 new researchers, doubling its staff. The Billerica R&D team will focus on discovery and development of new agents for cancer, neurodegenerative diseases and infertility.

As for Pfizer’s exiting the therapeutic areas of allergy, respiratory medicine, and internal medicine, it makes sense for a company to terminate programs that have not been productive. However, which areas to cut will vary by company. For example, in our February 19, 2010 blog post, we mentioned that GlaxoSmithKline (GSK) had eliminated its R&D in depression, anxiety, and pain. In contrast, Pfizer is building a new unit in pain and sensory disorders.

The main issue, however, as Pfizer’s CEO Ian Read said, is for Pfizer to fix its “innovative core”. The restructuring may help by freeing resources that had been devoted to low productivity therapeutic areas, and to high-risk/low-return areas. However, the cutbacks will not fix Pfizer’s low R&D productivity in any fundamental way.

As with other Big Pharma companies, Pfizer needs to fundamentally rethink its R&D strategy, and move towards the types of “smarter R&D” and partnering discussed in our December 3, 2010 blog article, and in the one-page article by GSK CEO Andrew Witty referenced in that article. This does not mean copying other companies’ “smart R&D” strategies, even Novartis’ or Roche/Genentech’s strategies that have been the most successful. It means developing a new R&D and partnering strategy specific for Pfizer, based on the fundamentals of what has worked in R&D in the past ten years or so, and building on Pfizer’s R&D assets. (Given the fast-changing nature of biomedical science and technology, as well as of the pharmaceutical and health care business landscape, even companies like Novartis and Roche/Genentech need to keep honing their R&D and partnering strategies.)

As we stated in our December 3 2010 article, this revamping of R&D strategy may well enable Pfizer to achieve additional cost savings. However, such selective R&D budget cuts would not impair the ability of the company to successfully discover and develop new, medically-significant drugs as across-the-board cuts tend to do.

Pfizer’s decision to concentrate its R&D facilities in research hubs such as Greater Boston, and to mandate that its researchers interact more intensively with academic and biotechnology researchers and entrepreneurs located in these hubs, can facilitate moving towards a “smarter R&D” and partnering strategy. We in the Boston area welcome Pfizer researchers and executives who will be moving here, and hope that we can work with Pfizer to help facilitate its R&D success.

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