Where Has All The Innovation Gone?
7 CommentsBy Ed Silverman // November 10th, 2010 // 8:01 am
Long time passing? The lament is a take-off on an old Pete Seeger song, but one might get the impression the refrain is appropriate after viewing a new summary of compounds presented at the recent American Chemical Society meeting in Boston. The latest gathering yielded presentations for 58 new drug candidates but, by one reckoning, the amount of innovation on display was lacking.
Specifically, not one previously unidentified drug target was reported at ACS, which was held in August, according to Citeline Drug Intelligence, a market research firm that tracked the presentations. What was on display? Central nervous system compounds ranked highest, with 23 candidates, followed by 16 for metabolic diseases and just eight for oncology. This, by the way, stands in contrast to previous years when cancer compounds often dominated company portfolios, Citeline notes.
Interestingly, Citeline found that almost half of the CNS drugs were cognition enhancers, which was the most popular single therapeutic area for which new candidates were reported at the conference. Of these, six were beta secretase inhibitors, and although the ACS database contains 39 such compounds, the firm points out that none are currently in active development beyond Phase I.
“While the drugs themselves may be innovative, there was not a single one which was aimed against a target which drugs had not tried to utilize before,” Citeline’s Ian Lloyd writes us. “Despite the plethora of opportunities, there is a worrying lack of innovation being displayed by the industry, with some big companies exiting the CNS arena completely. There is much talk in the industry about the move towards focusing on new and innovative therapies, especially in orphan conditions, but the hard evidence is failing to match the rhetoric.”
Of course, orphan therapies are most attractive - to big pharma, at least - when such meds can target large indications with the greatest sales potential. In any event, for those wondering which drugmakers had the most to discuss at ACS, Merck presented the largest number of new candidates, with 13. And seven of these were CNS candidates. You can see the rest here.
Bad Deal
When the odds are stacked against being a winner, about 1 out of ten make it to the pharmacy shelves, the cost can be close to a billion dollars. It’s no wonder “innovation” is not there.
Who wants to invest in such a huge gamble? I have been following venture capitalist involvement and it is close to an all time low.
Big Mac
Agreed. And VCs are struggling because there aren’t enough deals around to allow them to exit their positions. Without that they can’t pay back their investors which means they aren’t attracting money into their follow-on funds, and that means fewer investments into risky early stage opportunities.
industry insider
I just came back from a Healthcare Innovation conference today at Kellogg School of Management at Northwestern University. Four important points emerged among many: 1) there are virtually no VC firms acting along that are willing to fund start-up companies today. They all want the safety of multiple firms in the game 2) VC funds take the “barbell” approach, i.e., funding is greatest at the beginning and end of a development project. These days, the majority of funding is going towards latter stages, where certainty of FDA approval is greater, 3) In the VC world, regulatory risk now ranks first or second in the decision making process as to whether to fund a new project. As the FDA becomes more risk-averse, so do the US-based VC companies. Hence, more VC money is moving off shore, where the regulatory barriers are lower, 4) the vast majority of VC money these days is “old money”, i.e. second, third and fourth rounds of financing for projects that have already received initial financing. Virtually no significant money is going towards Round A. As the VC guys put it, while they’re starting to emerge from the past few years’ “nuclear winter”, financing still remains orders of magnitude smaller than last decade.
Lana Keeton
Too bad the pharmaceutical companies have been investing all their money in promotion of block buster drugs instead of research and development. Read “Our Daily Meds” by Melody Petersen to see where the money really goes…$250 million in promotion before the drug is ever seen on the shelves.
Marketing Based Medicine does not promote any real innovation…just bottom line profits for Big Pharma.
Lack of research and development is catching up to them. May be a good thing for patients who are taking so many unnecessary meds.
Lana Keeton
truthinmedicine@bellsouth.net
cliffintokyo
It is well known by *insiders* that pharma industry plays its cards close, out of necessity, because of patent issues.
We rarely talk about our most innovative med chem projects at conferences such as this.
Mike Wokasch
First it is important to distinguish discovery research from development. Innovation usually doesn’t come from development(doing the regulatory preclinical and clinical testing process). Yet development is what most think about when talking about VC funding.
In a world looking for “get rich quick”, short-term returns on investment there is less interest, little time, and scarce resources for doing the discovery research that will be needed to find truly innovative new drug treatments. To find truly innovative new treatments a much deeper, more comprehensive understanding of human biology, pathophysiology, and molecular biology of diseases will be needed.
Pharma has the resources to support the teams of expertise and to build the multidisciplinary collaborative approaches to discovery research that can deliver these exciting new treatments. Unfortunately, these programs will take a revitalized discovery research approach at Pharma. They also will take more time and a lot more money than Pharma’s traditional “tweaking” of molecules and the “hit and miss” mentality of matching compounds with potential therapeutic targets. http://www.PharmaReform.com
industry insider
Great points, Mike. All of the low hanging, easy to discover drugs are gone. We are now orders of magnitude higher in terms of the technical challenges in drug discovery research. It is now a 2-sided coin, the regulatory risk I cited above, and now the commercialization risk, which previously was a small consideration but is now a big one because of today’s tech. challenges.
My solution is too radical to ever be adopted, but could get Discovery out of its quagmire. That is intellectual property sharing. For example, in listenting to engineering testimony on the Deep water Horizon oil spill, one of the impediments to prevention is the fact that the oil companies do not share competitive intelligence on these issues. The upshot was that companies will have to share technical information so that the entire field can advance. Same goes for pharma.