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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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In the Pipeline

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April 19, 2006

Why All the Gloom?

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Posted by Derek

A recent comment asks why there's all this wailing about shrinking drug-company pipelines - how did it happen? I've gone into this topic before over the years (the blog's now over 4 years old, which I can hardly believe), but it's worth a quick summary. Here are some reasons - reasonable people can and do add more, and argue about how much importance to assign to each:

1. We used up all the easy targets. That can't be completely true, but still, there's something to it. I'm fond of pointing out that there aren't many home runs like angiotensin converting enzyme out there these days. Ah, ACE - an enzyme, of a class that we know we can inhibit with small molecules, that's right in the middle of a key pathway for a condition affecting millions and millions of people. You could say similar glowing things abouit HMG CoA reductase (the target of the statins). One of the hopes of genome sequencing and mining was that there would be some more of these out there that no one had discovered. This expectation has not aged well.

2. We know too much. There are plenty of drugs on the market that looked perfectly fine back when, but wouldn't go anywhere today. You can start with aspirin. We have so many more assays and counterscreens going now that it's a wonder anything makes it through at all.

3. We're competing against ourselves. As time goes on, and we gradually discover things that work for a reasonable number of people, we have to look harder for unmet medical needs. There aren't any perfect drugs out there, of couse, but there are still some areas which are pretty well served. The bar is (or at least should be) raised higher each time a new drug comes on the market.

4. We're left with really hard diseases. This is a corollary to the previous point. The big unmet medical needs are often unmet for very good reasons. Alzheimer's is a good example - big (and growing) market, lots of human suffering, current therapies almost completely inadequate. But getting a new Alzheimer's drug off the ground is a hideously hard task, not least because we still don't understand the disease very well.

5. Financial and managerial mistakes. It's always easy to use this as an excuse, no matter what the industry. But nevertheless. . .you can argue that some of the mergers that have taken place in the drug business haven't helped anyone much, and may well have harmed things (at least in the shorter term) through disrupted productivity. And even when the dust clears, big companies have their own set of problems.

Another mistake in this category: companies have in some cases also spent too much time searching for great big blockbusters, at the expense of potentially putting several smaller drugs onto the market. If you live by huge whopper home runs, you often die by them too, when the patent runs out.

There - those are a few I can think of immediately. What have I left out?

Comments (30) + TrackBacks (0) | Category: Drug Industry History


COMMENTS

1. Cynical Academic on April 19, 2006 11:50 PM writes...

Big Pharma companies are slowly (or quickly?) turning into Big Marketing companies. They'll do a bit of their own research and discovery, but it would be interesting to take bets on which FIPCO (fully integrated Pharma Co) first admits that it's not doing research any longer and will just license other discoveries for flogging to docs. Ooops, J&J beat us to it in some ways, although some would argue they were never really a FIPCO as much as a shampoo and baby-food company...

Pipelines are shrinking b/c the internal bars are higher as Derek points out and also b/c our short-term company mentality chases existing profits (humping current products) at the expense of taking chances.

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2. Paul on April 20, 2006 12:29 AM writes...

I think that the task of solving these tough problems always seems daunting along the way. A lot of times, once you get there, everyone smacks his head and says, "Wow...that wasn't so hard." All we need is another Pauling- or Einstein-caliber mind to open up a new field or method by showing us how we're going about it all wrong. One of these nice people usually comes around every fifty years or so.

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3. Ryan K. on April 20, 2006 4:15 AM writes...

This is the exact same thing that has been happening in the cosmetic & personal care industry (for any of you who have experience in the formulation side of things). Companies like Procter & Gamble, Unilever, and J&J have shut down almost all of their manufacturing facilities. They have transformed themselves into purely marketing companies. All formulation and manufacturing, and even wharehousing and product delivery are outsourced.

This is actually a trend happening in many industries. It's probably only a matter of time before the big pharma companies, especially given all the recent consolidation, will divest themselves of costly research & development organizations such as the one Derek works at for at the big B.

Also, it doesn't pay anymore to devote extensive research programs to areas of the market that are saturated with firmly ensconced products. This cuts off access to many highly grossing areas of the marketshare. All of the analgestic research was done 30-40 years ago, many psycological disorders almost 20 years ago, etc...

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4. david on April 20, 2006 7:56 AM writes...

I don't think the Big Marketing Company issue is as profound an impact as others suggest. I also think Derek is off point. It's not that all the science has been worked out--far from it. I worked at a Big Pharma company for a few years, and my observation is that three factors are responsible for the lack of research productivity:

1. Managements are not scientifically sophisticated. They come from marketing, not science (the CEO of one company started out at Kraft!), don't know what questions to ask, never mind what answers to accept, and have contempt for the consumer (whether the consumer is the physician writing the scrip or the user who takes the medicine).

2. Unwillingness to accept risk. If you invest in low-risk propositions all the time, you don't make any major breakthroughs with regard to real unmet medical needs. Hence, all the "me too" compounds.

3. "Solving yesterday's healthcare problems tomorrow". Poor focus of the R&D efforts.

Most of these problems relate to managements not performing, nothing else. Isn't it time to hold managements accountable?

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5. MikeT on April 20, 2006 7:58 AM writes...

Get more chemists involved... hint hint. It really is the FDA. When people say aspirin wouldn't be approved today, you can't expect much. Does aspirin really have side effects? I've never seen any. Maybe all those Harvard and MIT guys think alike. The pharmy companies just need some input from some chemists who think outside the famous chemist box. Maybe some coffee can cure my bad attitude.

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6. Derek Lowe on April 20, 2006 8:36 AM writes...

I think the amount spent on marketing is a symptom, not a cause. You put your money where you think you can make a greater risk-adjusted return, and if it's harder to discover new drugs, you sell the current ones harder.

And I don't mean to imply that all the science has been worked out - nowhere even close, of course. It's just that a disproportionate amount of the easy-to-apply science has been scooped up already. What's left is still huge, varied, and important, but it has a rather more chewy consistency.

As for aspirin, ask anyone in your in vivo group if a drug that causes that level of GI bleeding in animal models would make it through today. I'm not saying that it's a bad drug out there in the human population - just that it would never make it to humans now.

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7. Novice Chemist on April 20, 2006 9:00 AM writes...

How much can some of the current pipeline woes be placed on the late '90s focus on combinatorial chemistry?

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8. Demosthenes by day on April 20, 2006 9:31 AM writes...

I heard a quote a couple years ago at a Gordon Conference that has stuck with me. "The difference between a pipeline and a sewer are their contents". Lots of pipelines are acquiring a very distinct odor these days.
One of the big problems is this insane need to meet Wall St. analysts projections for what is expected of your company. This has led to companies making statements like "we're going to file X number of NDA's per year". Science doesn't work like that!! By imposing analyst implied goals versus data driven realistic goals companies are trying for quick home runs and are showing no inclination to hold out for the long term.
I don't believe that the pipelines are the problem. I believe it is the business pressures being applied from outside that are driving poor decision making.

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9. burt on April 20, 2006 9:37 AM writes...

"but it would be interesting to take bets on which FIPCO (fully integrated Pharma Co) first admits that it's not doing research any longer and will just license other discoveries for flogging to docs"

That pretty nearly describes Pfizer.

On Derek's point 2: The irony is that Vioxx is SUBSTANTIALLY safer than aspirin, but, since aspirin is way off patent, you won't see aspirin makers getting sued by sleezy ambulance-chasers like Merck is with Vioxx.

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10. LNT on April 20, 2006 9:41 AM writes...

I think Derek's point #3 is right on track. I really think that as time goes on, pharma R&D is going to get harder and harder because we've "solved" a lot of the easier and bigger problems. The treatments remaining to be discovered frequently revolve around:
1.) lower side effects
2.) better outcome in a smaller population set
In a drastic oversimplification (but I think has a great deal of truth to it): There are a finite number of conditions to treat, and we've generated moderately effective treatments for most of them. I would argue that within 25-50 years there will be very little medicinal chemistry going on because we will have reasonable treatments for most diseases.

(One exception: the ever-changing viral and bacterial infections)

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11. Reformed Pharm Chemist on April 20, 2006 9:42 AM writes...

How about the lack of chemical diversity in corporate chemical banks. A company, for instance, may have 1-2 mil compounds in the file. This might be raised to 5-10 mil if you count combi libraries and other coumpounds in tiny amounts and questionable purity. So many of these compounds are based around such similar designs. Methyl, ethyl, butyl, futile is not a recipe for variety. Nor is a library that is made by treating an acid chloride with X different amines (although nature does pretty good with peptides). I think there is a real need for a wider array of new compounds.

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12. glaszlo on April 20, 2006 9:42 AM writes...

So, how come no-one is talking about serendipity and luck. Many a blockbuster are made of this. So, I can't buy the argument that only the hard diseases are left. After all, who says you need to know anything and everything about a disease before you can find a treatment. If this was the case, the current list of effective drugs would be a lot shorter. Perhaps you just need to create an environment where scientists can plug away at whatever they think could be fruitful. That way they can either be right, completely wrong or find a cure for something they did not even contemplate. Less planning, more anarchy!

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13. Palo on April 20, 2006 9:44 AM writes...

Whether pharma marketing is a symptom or a cause is merely academic. Hoewever you think it started, there's feeback. Even if it is simply a consequence of dry pipelines, the decision to go hard after selling the same thing has clear consequences on your budget, and, as many point out, when executives go that route they are in fact shying away from risk. Phramaceutical companies are not small business. They have deep pockets, they could take risks. They don't, partially, because their mission is not to bring new drugs to the market. Their mission is to make money. If marketing and lobbying works just fine to make lots of money, why take risks?

Btw, Derek, you used to get very upset with industry critics that point out that pharma is not as innovative as it claims, and that pharma spends too much on repetitive drugs. It seems to me you finally came around... :-)

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14. Kay on April 20, 2006 10:12 AM writes...

I recently heard a Wall Street guy brood over the lack of productivity in R&D and the fantastic ice-to-eskimos skill of marketing, all locked together in some of the large players. One idea that bubbled up was to strip out the R&D of one of the BigCos, then purchase 19.9% of hundreds of small fry. A model to come?

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15. Harry on April 20, 2006 10:44 AM writes...

I think a big part of the dearth of stuff in the pipelines are related to the dearth of pipelines due to the consolidation of the industry. When Megapharm Company "P" buys another firm, the first thing that happens is that about 90% of the projects in the acquired firms pipeline are cancelled and the "most promising " compounds are kept.

At the same time- the usual thing to do is to close a big chunk of the acquired research capacity and "achieve greater efficiency and synergy" LOL.

A few years later they wonder why they have a thin pipeline.

That said- a lot of the basic and early stage stuff seems to be done at either small and/or startup firms or CRO's which may partially compensate for the loss of research effort and capacity.

My $0.02- YMMV as always.

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16. MolecularGeek on April 20, 2006 12:24 PM writes...

The tendency of MegaPharm, LTD. to cancel projects and lay off R&D staff when they engulf BigDrug, Inc. is really valid, I think. It's easy for the MBA set to say "We have the Intellectual Property and that's what matters" (at least it's what they can say is reflected in the goodwill numbers they want to claime on the balance sheet). They tend to lose sight of how that IP is actually generated too often, though.

On a related note, does anyone have any good sources for historical employment figures in discovery and pre-clinical pharmaceutical research? It would be interesting to see if there are just fewer people working to find new leads and make them into something that can be put into trials than there were 25 (or 10 or 5) years ago, or if the distribution is just different. I would echo the idea that certain kinds of organizations are particularly deadly for effective R&D work, and that if the pharmaceutical industry is gravitating towards those models for other reasons, it doesn't matter how many people are at the bench making compounds or running assays if their efforts are directed into a sewer instead of a pipleline.

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17. Ab on April 20, 2006 12:26 PM writes...

When the pharma companies are tying to fill their pipelines the emphasis is always on "orally bioavailable" small molecules. This may be akin to fitting a square peg in a round hole, given the diseases and targets that are being tackled. One approach is to change the shape of the pipes if you will and think about alternative delivery methods, biologics and the like.

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18. Harry on April 20, 2006 1:22 PM writes...

When I was at Informex in Las Vegas a couple of years ago, I listened to a keynote address by some "Futurist" about how the "paradigm" was changing, small molecules were out the door, biologics and large molecules were the wave of the future, how 3/4 of us won't be here in 2 years, etc, etc. He was, no doubt, highly paid to tell large companies what to expect.

Practically every prediction that he made (assuming I remember them correctly- I have to admit I thought it was so much BS at the time I really didn't pay close attention) was wrong.

If these were the sorts of assumptions that upper management all across the industry was basing their business plans on, I'm not too surprised that things aren't working out exactly as expected.

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19. Chrispy on April 20, 2006 3:34 PM writes...


We're a bunch of whimps now -- that's the problem. How often have you heard "kill early, kill cheaply" of drug development? Vioxx, IMHO, should never have been yanked -- I'm gonna damn well wish I had it as an option when I'm old and arthritic. We also presume too much -- how often have you seen libraries of compounds pared down to those which conform to Lipinski's rules of five? Any time you see that, people, I urge you to bring up cyclosporin, an 11 amino acid cyclic peptide with 28% oral bioavailability.

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20. Sebastian Holsclaw on April 20, 2006 3:38 PM writes...

"As for aspirin, ask anyone in your in vivo group if a drug that causes that level of GI bleeding in animal models would make it through today. I'm not saying that it's a bad drug out there in the human population - just that it would never make it to humans now."

Our idea of risk/reward seems deeply skewed to me.

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21. Anonymous on April 20, 2006 5:05 PM writes...

Hm, I wonder if the dry pipeline is only in big pharma pursuing small molecules. I used to work at Genentech until recently, and they had way too many molecules (and very good ones at that), that they couldn't even develop all of them. It was murder trying to get a molecule to IND because there were so many other fantastic NME's competing for the slots.

If we look around and count up not just the small molecules but also antibodies, antibody mimetics, vaccines, viruses, aptamers, RNA based therapies, etc. are there more or fewer promising molecules in the pipeline for the industry as whole?

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22. Paul Hughes on April 20, 2006 11:02 PM writes...

Science careers not attractive "relative" to others.

Nobody seems to mention the fact that we are reaping the rewards of making science a particularly unattractive career choice for the very best.

Sure you will always get people doing PhDs. But its the "quality" of the people doing PhDs that matters. Its the top 1-5% that make a diffence.

My hypothesis is these people no longer pursue science and bioscience careers. Its hard relative to other careers to get started, its not prestigious anymore, nor financially rewarding, nor the cutting edge (the WWW and internet startups were cutting edge for the 90s). Im not sure what is cutting edge now....not being outsourced perhaps.

These are the superstars that historically have provided the insight and brilliance to make "jumps" forward........unfortunately most are now or nearing retirement in big pharma and there is no new pipeline of talent coming through.

Pipeline trouble due to talent trouble.

That my opinion FWIW.

Permalink to Comment

23. Kay on April 21, 2006 6:44 AM writes...

Dear 21. Anonymous,

I think the issue revolves around the fact that many many shots on goal lead to few registered drugs. There is no shortage of small molecules at the early stage, but attrition kills so many. One could speculate that lousy assays kill good compounds before they reach the clinic and that lousy assays don't protect companies from clinical failures.

Why so many lousy assays? Job security and group think?

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24. secret milkshake on April 21, 2006 6:35 PM writes...

I think the problem is combination of dishonesty of management, idiocy of investors and the slow business cycle.

When it takes at least 10 years from the research idea to the approved product, you can have a lot of overpaid bullshit-spewing management people for the ride. The investors look for these people to make wonderfull promises of short term gain.
"We need to have at least a billion-a-year drug to develop" or "We need to kill projects early" or "We need to reduce late-candidate attrition rate" or "We need to introduce 4 new drug clinical candidates per year" is just feel-good blather. People that say this stuff are not serious. What guys like these are good at is actualy covering their asses and taking credit for somebody-else success. Like in NASA bureaucracy, if there is disconnect between balooney told by the top guys (to satisfy the investors, the headquarters, etc.) and the reality in the lab, the top guyw will discourage the comunication of disagreable news. (like "we will not have a clinical candidate by the end of year because this would mean completed long-term high dosing studies which we have not even planed because we do not have a good scale-up and purification procedure and we have not done even preliminary tox on few animals to determine if this chosen compound is realy good"). They won't listen so that they can be more "honest" and repeat their bull to their superiors and to investors.

Then, nearly year later, they say "unforeseen complications and delay in later-stage animal studies" but realy what this was all about was wishful thinking and bullshit.

On related subject: Pfizer-Pharmacia merger was supposed to generat "synergy savings" 2 billions a year. These savings did not came from reduced sales force, I can tell you that.

It is merger-megalomania of management types that drives these deals. The only winner of these mergers is their mega-careers. The combined market share of companies typicaly declines after the merger. They usualy pick up projects that are close to completion but run the rest to the ground. Well, then complain about pipeline, if you do this. The problem is, nobody from investors will call these managers to responsibility, it is difficult to pin down the poor pipeline to the merger-induced damage from 5 years ago.

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25. Dave on April 21, 2006 9:42 PM writes...

Kay, spoken like a true chemist!

Don't blame the messenger for telling you that the compounds you've made are garbage. You medchem guys love to make compounds that are easy to make regardless of whether or not they're the most likely to show efficacy. Combi-chem guys are cut from the same mold in that they'll typically choose to make the more synthetically-tractable library rather than the most diverse/biologically-relevant library.

You chemists need to accept the fact that the days of just showing up at work and making compounds for the fun of it are over.

The future lies in biologics in the near term and cell-based therapies, siRNA and the like, and alternative small-molecule utilizing platforms in the long term.

I'd predict (along with many other smarter individuals who've already voiced their opinions) that the number of new, blockbuster, conventional small-molecule therapeutics to achieve commercial viability in the next 20 years will be half that or less than the number of successful drugs of the prior 2 decades.

Anonymous 21, I worked for G-tech from '97-'99 and hold the company in very high regard. Many, many brilliant scientists there some of whom I'm still in contact with...

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26. Kay on April 22, 2006 6:40 AM writes...

Dave, I am a biologist!

Many of our assays (tox, ADME, etc) are known to be non-predictive. We use them because of momentum (Lipinski-think) and because we must do something in order to say that we did something (tox). Workers take the results too seriously, and they actually make go/no go decisions based on discredited assays. We are pounding ourselves into the ground.

I agree that the fun days are over. I think that small molecules have plenty of runway remaining, however.

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27. Dave on April 22, 2006 9:44 AM writes...

Kay, my apologies.

I didn't say that the runway was up for the small molecule modality, just that it's a whole lot shorter now and is probably shorter than that of other modalities.

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28. Dave on April 22, 2006 11:17 AM writes...

For an intriguing glimpse at the future, check out:

http://www.cellectis.com/genome.html

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29. anon IP lawyer on April 23, 2006 4:25 PM writes...

Had to chime in here. An IP lawyer talks to everyone and looks at the documents, so here's my take: We have met the enemy and it is us.

Way back in the '80's I worked as outside counsel to biotech start ups in La Jolla. I asked the researchers who were big Pharma refugees why they left the steady paycheck world for a beautiful suite in the General Atomics building (inside joke for those who know). The answer: the culture of "NO". If management said "no" they were correct 100% of the time. If they said "yes" they were wrong 50% of the time (broadly speaking, you get the drift).

So why was there free-floating fear of being wrong? Answer: quarterly profits, making the numbers. Mebbe laziness, or b-school, who knows. But it was fear of spending a bunch of money and not making the numbers.

Now if the late '80's had more "yes's", there would have been more pipeline in the late '90's, my guess.

Wall street has caused a breeder reactor of fear of responsibility for being wrong. Who is "Wall Street?" Investors. Like me, maybe you all, who have 401K's or retirement investments.

Thanks for the blog -- Anon

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30. S Silverstein on April 25, 2006 6:12 PM writes...

One thing you missed: I think pharma has become quite a bit inbred.

HR departments and managers have so micro-specified qualification for positions, and also often require "5 years of experience" doing what the job already calls for, such that there is little new creative blood entering the industry.

Cross-disciplinary expertise is also not sought. See for example this summary of statements from Gartner in their "Life Science Manufacturers Adapt to Industry Transitions" report.

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