In a blog published by Harvard Business School, Scott Anthony discussed Novartis’ R&D strategy as an example of “disruptive innovation”.
Scott Anthony is president of Innosight, an innovation consulting, training, and investment firm. Innosight’s founder, Harvard Business School professor Clayton Christensen, is the originator of the concept of “disruptive innovation”. A disruptive innovation is an innovation that improves a product or service in ways that the market does not expect. An example is desktop publishing versus traditional publishing, or the automobile versus the horse and buggy.
In his blog post (dated June 18, 2009), Mr. Anthony cites the focus of Big Pharma on developing blockbuster drugs that target the largest disease conditions. This strategy has become increasingly ineffective, due to efficacy and safety failures despite every-larger R&D budgets. In contrast, he states that Novartis is attempting to develop the most effective drugs via an understanding of the mechanisms of a disease condition, no matter how small. These effective drugs can then be tested against larger indications, and may eventually become blockbusters.
We also discuss Novartis’ R&D strategy, in our new book-length report on improving the productivity of drug development, Approaches to Reducing Phase II Attrition, published in May by Cambridge Healthtech Institute.
Novartis’ drug discovery and development strategy is based on biochemical pathways. For example, Novartis researchers note that in many cases rare familial diseases are caused by disruptions of pathways that are also involved in more common, complex diseases. The researchers therefore develop drugs that target these pathways, and obtain proof-of-concept (POC) for these drugs by first testing them in small populations of patients with the genetic disease. Drugs that have achieved POC may later be tested in larger indications that involve the same pathway.
The first drug that Novartis has been developing using this strategy is the interleukin-1β inhibitor Ilaris (canakinumab). The company conducted its first clinical trials in patients with cryopyrin-associated periodic syndromes, (CAPS), a group of rare inherited auto-inflammatory conditions that are characterized by overproduction of IL-1β. In June 2009, the FDA approved Ilaris for treatment of CAPS. Novartis is currently testing Ilaris in more common diseases in which the IL-1β pathway is thought to play a major role, including rheumatoid arthritis.
In our report, we discuss Novartis’ strategy as part of a more general discussion of biology-driven drug discovery (i.e., drug discovery based on understanding of disease mechanisms), and of other strategies to reduce pipeline attrition.
Despite Mr. Anthony’s identification of Novartis’ strategy as an example of a novel “disruptive innovation”, biology-driven drug discovery and even pathway-based drug discovery is not a new strategy. For example, most biologics (mainly developed by biotech companies, with Genentech being the best example) have been developed via biology-driven R&D. Kinase inhibitors for treatment of cancer have been developed via pathway-based strategies, often utilizing years or decades of academic research on signaling pathways in normal and cancer cells. Novartis’ Gleevec (imatinib) is an example of such a kinase inhibitor—it was the example of Gleevec that led Novartis to adopt its pathway-based strategy in the first place.
Biology-driven drug discovery and development, whether practiced by Novartis or by other companies such as Genentech, is aimed at developing effective drugs as Mr. Anthony says. Moreover, leading biologics (e.g., Avastin, Humira, Rituxan, Enbrel, Herceptin) are now on track to be the biggest-selling drugs in 2014, according to the market research firm Evaluate Pharma.
Thus biology-driven drug discovery and development has become a commercial success for many companies, not just for Novartis.
We at Haberman Associates have been advocates of biology-driven drug R&D for over a decade, long before anyone labeled it a “disruptive strategy”. Rather than being a novel, disruptive strategy, it is a fairly old strategy that most large pharmaceutical companies bypassed in favor of industrialized drug R&D based on genomics and high-throughput screening. However, the latter strategy has been generally ineffective, and Big Pharma has had to turn increasingly to biology-driven biotech companies as sources of innovative drugs. Now Novartis’ pathway-based strategy is showing considerable success in building that company’s pipeline, and Roche is integrating itself with Genentech to become a biotech company that is a member of the Biotechnology Industry Organization (BIO) rather than the Pharmaceuticals Research and Manufacturers of America (PhRMA).
The case of biology-driven drug R&D is an example of how a largely overlooked older strategy may become disruptive, when applied in the right way. Are there overlooked strategies and technologies that might become the basis of your company’s R&D success?
As the producers of this blog, and as consultants to the biotechnology and pharmaceutical industry, Haberman Associates would like to hear from you. If you are in a biotech or pharmaceutical company, and would like a 15-20-minute, no-obligation telephone discussion of issues raised by this or other blog articles, or of other issues that are important to your company, please contact us by phone or e-mail. We also welcome your comments on this or any other article on this blog.
There have been a lot of new papers on stem cells in leading journals recently. Stem cells made the covers of the 26 June issue of Science and the 2 July issue of Nature, and both issues contained special sections on stem cells.
Note especially the review by Shinya Yamanaka of progress in the field of induced pluripotent stem cells (iPS), a field that was first developed by his laboratory.
In that article, Dr. Yamanaka discusses hurdles to efficient iPS cell generation, ways by which these hurdles may be overcome, and the great potential of the field once this is accomplished. This is an example of the need to develop enabling technologies to move a technologically immature field up the development curve, as discussed in our earlier post.
Both the Science and Nature issues also discuss regeneration in such animals as planarians, fish, and salamanders. This is a favorite subject of many biologists. The Science article considers the implications of molecular and cellular studies of regeneration in these organisms for wound repair in humans.
The July/August issue of Technology Review also has an article on stem cells, which emphasizes iPS technology.
The article also discusses companies that are attempting to commercialize the infant field of iPS technology, especially California start-up iZumi Bio, which since publication of the article has merged with Pierian to form iPierian. iPierian is focusing on using iPS cells for drug discovery, by creating disease models based on iPS cells derived from patients with such diseases as Parkinson’s disease, spinal muscular atrophy and amyotrophic lateral sclerosis.
RNAi, embryonic stem cells, and technological prematurity
During the Bush administration, the US scientific community, numerous biotech companies, “disease organizations”, many politicians, and families affected by diseases such as juvenile diabetes, spinal cord injuries, and neurodegenerative diseases, deplored the administration’s restrictions on use of Federal funds for human embryonic stem (hES) cell research. Many predicted that countries with fewer restrictions, such as the UK, would far outdistance the United States in stem cell research, and in its applications to regenerative medicine.
In March of this year, the new Obama administrations lifted many restrictions on hES cell research. However, it is clear that the US did not significantly fall behind countries that did not have the Bush-era restrictions in place during the past eight years. Why not? It is because hES cell research constitutes a scientifically premature technology.
A field of biomedical science is said to be scientifically or technologically premature when despite the great science and exciting potential of the field, any practicable therapeutic applications are in the distant future, due to difficult hurdles in applying the technology. Thus researchers in countries not hampered by the former US restrictions were unable to capitalize on their “head start” as was feared.
On January 22, I gave a presentation at the Center for Business Intelligence (CBI) conference “Executing on the Promise of RNAi” in Cambridge MA. My presentation, “The Therapeutic RNAi Market – Lessons from the Evolution of the Biologics Market”, compared the field of monoclonal antibody (MAb) drugs to that of RNAi drugs. Despite the high level of investment in therapeutic RNAi, the formation of numerous biotech companies specializing in RNAi drug development, and the strong interest of Big Pharma in the field, there is still not one therapeutic RNAi product on the market. Researchers also see significant hurdles to the development of RNAi drugs, especially those involving systemic drug delivery. As a result, many experts believe that therapeutic RNAi is scientifically premature.
MAbs currently represent the most successful class of biologics. However, the therapeutic MAb field went through a long period of scientific prematurity, from 1975 through the mid-1990s. Several enabling technologies, developed from the mid-1980s to the mid-1990s, were necessary for the explosion of successful MAb drugs, from the mid-1990s to today. Similarly, many companies and academic laboratories are hard at work developing enabling technologies to catalyze the development of the therapeutic RNAi field. Among researchers active in developing these enabling technologies were several speakers at the CBI conference, from such companies as Alnylam, RXi, Dicerna, Calando, miRagen, Santaris, and Quark.
With respect to hES cells, researchers (including American researchers) have been hard at work on developing enabling technologies to move that field up the technology development curve. Notably, within the last three years, researchers in Japan, the US, Canada, and other countries have developed the new field of induced pluripotent stem (iPS) cells. This field is based on a set of technologies in which adult cells are reprogrammed, via insertion of four (or fewer) specific genes, into pluripotent cells that resemble embryonic stem cells. This approach not only gets around many of the ethical objections to the use of embryo-derived hES cells, but also potentially puts stem cells into the hands of many more researchers, who do not have ready access to human embryos. Moreover, iPS technology has the potential to enable researchers to construct patient-matched stem cells for cellular therapies, thus eliminating the prospect of immune rejection of transferred cells.
The iPS cell field was reviewed in a News Feature in the 23 April 2009 issue of Nature. As discussed in this review, researchers have been concentrating on developing the technology, for example reprogramming cells by using non-integrating or excisable vectors, or even with no inserted genes at all (e.g., combinations of small-molecule drugs and proteins). One researcher, Rudolf Jaenisch of MIT and the Whitehead Institute, said in the article that research in the iPS field has so far been all about technology. At some point in the near future, Jaenisch believes that the field will shift to considering scientific questions such as mechanisms of reprogramming and of cellular differentiation and dedifferentiation.
A few potential hES cell-based therapies are making their way to the clinic. In January, Geron announced that the FDA had cleared the company’s Investigational New Drug application (IND) for human clinical trials of an hES cell-based therapy for spinal cord repair. Pfizer, in collaboration with researchers at University College, London, is working to develop a hES cell-based therapy for age-related macular degeneration (AMD), a leading cause of blindness. This will involve treatment of patients with retinal pigment epithelial cells derived from hES cells. The researchers anticipate beginning clinical trials within two years. Especially in the case of the hES-based spinal cord therapy, many researchers see major pitfalls, which may result in clinical failure. This situation is typical for initial applications of an early-stage or premature technology.
Early-stage or premature technologies often still have great value in the research laboratory, including enabling research breakthroughs that can lead to new therapies. For example, MAb technology, even in its earliest days, enabled researchers to discover receptors that are key to the activity of cells of the immune system and of tumor cells. This resulted in enormous breakthroughs in immunology and in cancer biology, with eventual applications to the development of successful anti-inflammatory, anti-HIV/AIDS, and anti-tumor drugs. RNAi technology has become a mainstay of target validation and pathway studies in drug discovery. Similarly, researchers expect that hES cell technology—and especially iPS cell technology—will provide breakthrough tools for drug discovery researchers. This may well happen far in advance of the development of hES/iPS-based cellular therapies.