Friday, June 10, 2011

DOTW: School's (Still) In For Pharma

School's out for summer here in California, but not forever. As this week's tie-up between Pfizer and prominent hospitals and unis in Boston reminds us, big pharma seems keen on continuing education.

The goal, as we told you in this February IN VIVO feature, is to increase access to innovative R&D, via externally-sourced partnerships with leading academics, generally around risky areas, where the unmet need is high and the biological understanding is nascent (think Alzheimer's, treatment-resistant depression, obesity).

Pfizer isn't the only big pharma doing these types of deals (J&J, AstraZeneca, GSK, Bayer, and Sanofi are all touting their prowess in linking with top minds) but it has been among the most aggressive in the industry, both in terms of the pace of its deal-making and the money it's willing to spend.

On June 8, the big pharma revealed the latest in its Centers for Therapeutic Innovation program, a $100 million, 5-year collaboration with 8 Boston-area unis and hospitals that follows just months after similar tie-ups in San Francisco and New York. In announcing the deal, Pfizer made it clear Boston will become its official CTI hub (with offices on the Longwood Medical Campus, within spitting distance of academic researchers), even as the group anticipates setting up 5 additional spokes in cities in the US and elsewhere around the globe.

According to "The Pink Sheet" Daily, with an estimated 40 staffers on the Longwood Campus, the new CTI will employ twice as many Pfizer professionals as the exploratory UCSF arrangement when it got started last fall, and more than the 25 now working diligently in NYC. These industry execs are supposed to establish direct relationships with specific scientists, in the same way that VCs often reach out to academics or docs -- to identify research that could lead to viable commercial products. A joint pharma/academia steering committee will ultimately choose the projects eligible for Pfizer's $20 million annually.

The question of course, is will these CTI deals provide Pfizer with the necessary innovation to revitalize its "innovative core", even as senior industry execs continue to define what that exactly means. At around $100 million a pop, these deals are real money, even if the company is hedging by limiting the amount it doles out in one go. Certainly the amount of people power devoted to managing the alliances --85 and rising-- ain't nothing.

Pfizer, of course, loses its Lipitor juggernaut later this year, and has been increasingly looking for ways to cut costs. Two weeks ago, it revealed it was streamlining its outsourcing, looking to Parexel and Icon, to become its preferred CRO providers. This week, WSJ broke the news that the big pharma was looking to cull another $1 billion, mostly via reducing administrative costs.

Some have argued these CTI deals are a relatively low-cost way for Pfizer to get access to exciting R&D. And we certainly get the fact that individually these alliances are small money for a company with Pfizer's current cash flow. Thing is, with Lipitor going off patent that cash flow will dry up (at least a little). That means Pfizer's Jose-Carlos Gutierrez-Ramos and Anthony Coyle, who spearhead the CTI initiative, will have to justify why spending roughly $160 million of R&D money annually (assuming all 8 CTIs are up and running by year's end w/o making an attempt to incorporate management costs) is better than inking multiple development deals with biotechs --or even VCs. After all, why not take a page from Lilly's FIPNET playbook and try something like that group's mirror fund?

In other words, for the money Pfizer is ponying up, it's got to ensure it's getting more than a GED (aka generally excellent discovery) -- in the form of actual pipeline. And there's where the potential problem arises. As is true for the other CTI arrangements, the Boston deal is structured as an opt-in: there is no quid pro quo that mandates the unis participating will steer a certain number of researchers to accepting the Pfizer dollars.

As such, there is the risk that investigators with top-notch ideas may seek alternatives -- either venture capital or additional grants or heaven, forbid, competing big pharma -- to finance their early stage science. That of course would leave Pfizer with access to second-tier projects -- and really, what good does that do the big drug maker? Indeed, when reporting the IN VIVO feature, one industry source opined (off the record, of course) that in certain cases academic centers are placing an unrealistic premium on their IP, without putting enough of their own skin in the game.

Pfizer execs know the risks, telling IN VIVO "it's up to us" to create the conditions under which the CTIs can be successful; and with a majority of VCs pulling back from funding early new ideas to baby existing portfolio cos and a very limited supply of federal grant money, this may be as good a time as any to head back to school.

Whether the results ultimately create the next wave of Pfizer innovation...well that's an experiment that doesn't fit nicely into an academic calendar year. And one crucial element may be whether Pfizer execs --especially Coyle, Pfizer's CTI architect and head of R&D Mikael Dolsten have the stamina to see the program through the inevitable ups and downs.

As we wait for the next CTI deal and news of projects financed from the ongoing NY, SF, and Boston efforts, we've sharpened our pencils and cracked open our notebooks to bring you another installment of ...

Selecta/Juvenile Diabetes Research Foundation: Selecta Biosciences and the Juvenile Diabetes Research Foundation will collaborate to bring an experimental tolerogenic vaccine for type 1 diabetes through preclinical proof-of-concept. In an arrangement announced June 9, JDRF will provide undisclosed milestone-based financial support to Selecta’s efforts to produce a vaccine that specifically targets the antigen which causes type 1 diabetes. JDRF’s Industry and Development Partnership Program has provided roughly $75 million in funding for diabetes research at 32 companies since 2004. The Selecta collaboration involves staged objectives beginning with creation of a work plan for the identification of a clinical candidate, the biotech says. JDRF will also provide "insights and expertise", which could be extremely helpful given the high-risk nature of the endeavor. (Recall just last week J&J parted ways with the biotech Diamyd, which has a Phase III vaccine for Type 1 diabetes called GAD65.) Selecta's therapy aims to stop a patient’s autoimmune response to Type1 diabetes-causing antigens, thereby blocking disease progression. The vaccine actively eliminates or inactivates T cells that cause beta-cell destruction while at the same time increases the number and function of beneficial T cells. In addition to diabetes,the biotech also is working on vaccines for preventing and treating diseases in half a dozen other therapeutic areas, including infectious diseases (universal flu, pneumococcus bacterial infection, malaria), oncology (universal human papilloma virus and prostate cancer), and smoking cessation. —Joseph Haas

Lilly/Synthes: In an unusual venture, Eli Lilly and the orthopedics manufacturer Synthes have formed a long-term world-wide collaboration for the development and commercialization of bone-healing therapies. The companies will jointly develop new treatments for fractures and use in orthopedic trauma, spine, craniomaxillofacial and reconstructive procedures. The deal covers compounds ranging in stage from pre-clinical to clinical, which Lilly can license to Synthes as part of the arrangement. Lilly would not specify the compounds and financial details of the collaboration weren't disclosed. Drug-device development collaborations are common, but the extent and expected duration of this one appears to be unusual. While the companies wouldn’t specify a termination date, Lilly executives said it is designed to last at least 10 years, long enough for compounds in early-stage development to reach commercialization. More unusual is the worldwide co-promotion, in which Synthes, which is the world’s leading orthopedic trauma company, will promote to orthopedic surgeons Lilly’s Forteo, an $830 million in sales osteoporosis drug. Such drug-device commercial partnerships have a rocky history and are difficult to execute. The timing of the deal is also noteworthy, as Synthes is in the process of being acquired by Johnson & Johnson for $21.3 billion. Both Synthes and Lilly have pressing strategic reasons for pursuing the deal, though. Synthes has not been at the forefront of an orthopedic industry trend to incorporate biologics into the product mix; Lilly, for its part, has played a leadership role in its industry in exploring innovative partnerships to help fund its drug development, although it has not worked at this level before with a device company. --Wendy Diller

Merck/Roche: ASCO wasn't a huge focus for Merck this year beyond a presentation with long-time partner Ariad tied to Phase III data for the mTOR inhibitor ridaforolimus. However, as the meeting was winding down, the big pharma announced it had formed a collaboration with Roche focused on the development of companion diagnostics to accompany Merck's pipeline of investigational cancer therapies. It's the second non-traditional alliance Merck has struck with Roche in the past month: recall in May, just after winning approval for Victrelis, the big pharma signed on Roche as a marketing partner in an attempt to cut Vertex and it's Incivek out of the Hep C protease inhibitor horse race. The alliance announced this week is aimed at the other end of the spectrum: according to the June 7 press release, Roche Diagnostics will provide Merck access to validated standardized assays, as well as expanded use of the AmpliChip p53 test, to better identify patients suitable for inclusion in ongoing/planned clinical trials. Financial details of the collaboration weren't disclosed, nor did Merck give any indication of which products now under development would be candidates for companion test development. Including vaccines, Merck has a stable of roughly two dozen oncology products in its pipeline, according to Elsevier's Inteleos database. Beyond ridaforolimus, late stage assets include an insulin-like growth factor 1 inhibitor called dalotuzumab and a cyclin-dependent kinase inhibitor, dinaciclib. Earlier stage, the big pharma also has a PARP inhibitor, a MEK inhibitor, and an aurora kinase blocker, all of which are are targets of avid interest for biopharmas. (Last week, Pfizer outlicensed its PARP inhibitor, which like Merck's lags significantly behind Sanofi's Phase III iniparib.) Pharma companies are increasingly talking about the need to use companion tests in oncology --and in some cases they are walking the talk (think Pfizer's crizotinib or Plexxikon/Roche's BRAF inhibitor in melanoma). But even as they see greater need for accompanying diagnostics, with the exception of Roche, Abbott, and Novartis, biopharmas haven't seen a need to develop the testing capabilities in-house, with partnering the preferred way to access the myriad technologies now being developed. --EL

Merck/Intercell: Two long-time partners announced that they have terminated studies of a Staphylococcus aureus vaccine, as Merck elected to discontinue trials on Intercell’s late-stage prophylaxis V710. Merck’s decision followed a unanimous recommendation from an independent Data Monitoring Committee, which determined that the vaccine is unlikely to show statistically significant clinical benefits, based on interim results of a Phase II/III trial. Enrollment in the trial was suspended following the DMC’s initial recommendation in April. The DMC also flagged a safety concern, citing increased likelihood of mortality and organ failure compared to patients receiving placebo, although follow-up assessments indicated the safety risk was not statistically significant. Merck, which had committed to clinical development as well as manufacturing and marketing of V710, expects to present more detailed results of the study soon. Intercell would have been due milestone payments and royalties of unspecified size had the trial continued and the drug been approved. Merck and Intercell first announced in 2001 that they would collaborate to develop bacterial vaccines; the partnership was extended in 2004, and expanded to include a Group A Streptococcus vaccine in 2006. S. aureus is the most common hospital-acquired bacterial infection, and about 50 percent of cases are antibiotic-resistant. – Paul Bonanos

Image courtesy of flickrer MrPhilDog via a creative commons license.


Anonymous said...

CTI is all smoke and mirrors. It gives the appearance that Pfizer is doing something about their pipeline. Academics aren't interested in discovering drugs, they want to publish papers and win grants. Certainly they can't meet the deadlines that are imposed in a drug discovery environment. Gutierrez-Ramos and Coyle will be long gone with their fat severances well in advance of CTI being exposed as a waste of resources. Just a couple of vultures extracting their pound of flesh from the Pfizer carcass.

Anonymous said...

Totally agree, almost a year later and the word from my Pfizer sources is that the CTI model stinks with targets from the dark ages and in-fighting and absence of collabaration the normal.