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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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April 28, 2010

Pfizer's Future: Biotech Followups

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Posted by Derek

The Wall Street Journal has an article detailing some of Pfizer's plans in the biologics area: stepping in with second-generation versions of current winners from other companies. New versions of Rituxan and Enbrel are in the works, with the improvements mostly coming in how often the drugs need to be given.

They're not alone in this - Merck has announced that they're going to go after the same sorts of markets. And I can see the business rationale, since the original products have been such huge successes. But these new versions are going to be different enough that they're certainly not "biosimilars" or "biogenerics" - they're new substances, which will require their own complete safety/efficacy clinical workup. And by the time they get to market, some of these may be up against (or close to being up against) lower-cost versions of the original therapies, so the insurance companies are going to have to see some real benefit before they switch away.

So while some of these may well work out, not all of them will. It looks like a worthwhile thing to try, but it's not a sure road to riches. That's the thing about this industry these days - all those roads appear to be blocked off and plastered with "Detour" signs. . .

Comments (25) + TrackBacks (0) | Category: "Me Too" Drugs | Drug Development | Drug Prices


COMMENTS

1. Hap on April 28, 2010 12:51 PM writes...

1) Won't the original companies also be looking to make those kind of improvements? Furthermore, unless Pfizer has broad technologies to improve those characteristics, the original companies are likely to be better at it than they are. The targets are validated by the original successes, which should help with testing and approval, but you're almost starting with guaranteed competition.

2) These are the kinds of therapies that seem most susceptible to either government or insurance company cost-containment strategies - even if they are effective at what they do, they may not be able to make enough money, because unless there's strong data, most of the potential market won't be able to buy them. In addition, the "sell! sell! sell!" model of pharmaceutical sales has probably compromised their good will badly enough that they are unlikely to be able to command extra for their follow-on (or have larger market share at the same price) compared to their competitors.

I guess it's a good place to start to get biologics experience, but in the long run, it doesn't sound like all that good a strategy. Alternatively, if they are developing generally applicable technology for drug delivery, that would help, but they could apply that as well to their current products.

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2. PharmaHeretic on April 28, 2010 1:10 PM writes...

You did not expect them to support real innovation, did you?

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3. barry on April 28, 2010 2:04 PM writes...

anything that comes with a guaranteed outcome isn't research.
As long as Big Pharma is run by people who came from Marketing, it's going to live on products acquired from outside.

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4. RandDChemist on April 28, 2010 2:40 PM writes...

Innovation: FAIL

Isn't this admitting the way they do things isn't working?

Who get's blamed? The people doing the work.

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5. anchor on April 28, 2010 2:47 PM writes...


We do not know if the new business model (biologics) is going to pay off any time soon. There are too many variables here (FDA, insurance and of course clueless managers/leaders). If all follows Pfizer business model then we have a blind leading the blind. Been there and done that.

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6. barry on April 28, 2010 2:52 PM writes...

despite the MorganStanley analysis that sees all the ROI potential in Mergers and Acquisitions, Merck et al. were the most profitable and most admired companies in the U.S. back when they were doing small-molecule research. The last fifteen years of mergers and acquisitions hasn't proven to be better.

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7. Hap on April 28, 2010 3:00 PM writes...

Maybe you need to hang out with Generex's investors more often. The money's going to be rolling in! It CAN'T FAIL!

Alternatively, maybe that aphorism about insanity being to do the same thing repeatedly and expecting a different result hasn't percolated through their management yet. I thought they had drugs for that.

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8. absolutely on April 28, 2010 4:22 PM writes...

All of the big guys have this best in class strategy. It is being hailed as the saviour of big pharma through improved ROI etc but not everyone can be best in class - there will only be one winner in every contest and many many losers. Lets face it in same cases there will be no winners at all!

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9. researchfella on April 28, 2010 8:16 PM writes...

What's all the complaining about? This is what most pharma research is all about: multiple companies working on the same, most promising biological targets, pathways and strategies. And there's nothing wrong with multiple products coming to market that work by the same mechanism. There are multiple cases of the "first-in-class" drug not ending up being the "best-in-class" drug. And different drugs that act against the same target work somewhat differently for different people, which is why there's a huge market for so-called 'me-too' drugs. What's your favorite NSAID? Or your favorite statin?

It seems like there's almost nothing except negativity and whining on this blog lately. I recognize that these moves by Pfizer and Merck aren't likely going to create many, if any, chemistry job openings. But why isn't an announcement about a couple of pharma companies expanding into new areas being met with praise and at least a little bit of celebration?

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10. Cellbio on April 28, 2010 9:35 PM writes...

Researchfella

From what I read, this is much less about moving into new research areas and more about making investments into developing new entities with modest improvements of currently effective drugs, hence an investment with a better chance of success.

Or at least a perceived better chance. My personal opinion is this is closer to a retread of small molecule strategies, which could, as you point out, produce entities with real differentiation. With biologics, it is much less likely to produce profound differences, but rather create a work around to patent expiry, onerous deal terms, or provide a marketing angle.

I am skeptical this will hit the mark, as regulatory agencies and payors will likely not see the rationale, or pay for modest improvements when safe effective meds meet the need. The EU will likely lead the way, but US markets will follow and follow-on biologics are more likely to be cheaper versions of existing meds than PK improvements.

So, as a researchfella, what is there to be encouraged about? This is serving already served markets, taking investment dollars away from addressing unmet need, and is damn boring unless you like reducing a research portfolio to an NPV.

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11. Jose on April 28, 2010 10:25 PM writes...

Researchfella- I think most of the vitriol here is due to the fact that pharma mgmt keep jumping to the next big thing like a grasshopper with ADD, with no evidence-base or rational design process. And that, in turn threatens the long viability of everyone's careers. Which tends to make people grouchy.

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12. Steve Brand on April 29, 2010 6:44 AM writes...

I agree with researchfella. Pfizer's announcement shouldn't suprise anyone, and to my mind is a natural progression. This is the me-too business model of big pharma, which still seems to work well enough. The fact that this model is applied to large proteins as opposed to small molecules is (largely) irrelevant. Just how different biologicals need to be in order to be 'novel' is the most interesting facet of all this.

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13. Ed on April 29, 2010 7:16 AM writes...

Well, there are all kinds of tricks that can be pulled with biologicals that have no parallel in small molecule discovery - e.g. humanized/fully human, glycosylation/fucosylation, pegylation, antibody-drug conjugates - and this is even before you even start considering nanobodies/domain antibodies.

Scorn from some for a lack of innovation on this front is misguided I feel. Maybe all the chemistry critics out there have already invented a non-immunogenic, reliably biodegradable, readily synthesized PEG substitute?

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14. Newbie on April 29, 2010 9:08 AM writes...

Maybe they should make inhaled biologics.

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15. Hap on April 29, 2010 9:18 AM writes...

Well, I'm pretty certain that if Pfizer had such technology, they wouldn't be touting a "follow-on" strategy, since such a strategy would obviously be ground-breaking. So we can safely eliminate that option, unless you know something that neither people here nor Pfizer seem to know. Small-molecules tend to be different at their core - they are different chemical entities, and since they're likely looking at small portions of their targets, there's lots of room for changes in function with structure (hence why "me-toos" with small molecules are sometimes not). Proteins have to find the same target - anything that changes their binding to target will probably make them ineffective. You can make them last longer and less immunogenic, but they have to retain their identities or they probably won't work. They can't really change the drug, and they probably don't have the leap in technology you complain we disrespect, so where's the innovation?

People can innovate gradually, by incorporating modifications that help improve a drug, but as with small molecules, they probably won't get money unless there's a significant benefit. Since the protein drugs are nongeneric for so long (why the investment) and expensive to start with in most cases, people probably aren't going to buy them they way they might buy alternative ulcer or erectile dysfunction meds, and insurance companies aren't going to want to make a committment to paying for them unless there's a lot of benefit. So you either have to make big leaps or spend lots of money for a small potential market. What about that strategy sounds like a good idea?

If random chemists can punch holes in a business idea, it can't be all that good.

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16. John on April 29, 2010 10:15 AM writes...

I think its important to remember two things here.

The first is that there is no such thing as a "biogeneric". Both US and EU regulations require extensive clinical evaluation of what the regulatory authorities refer to as "follow-on biologics" rather than biogenerics, and several have failed in clinical trials. As a result of this, most follow-on biologics sell for 75% or more the price of the originator drug. There is no steep price fall off in these cases as in the case of a small molecule going generic.

The second is that the science of biological therapies, at least in the case of antibodies, is still very early stage. Why have so few anticancer antibodies made it to market? Because most of them don't work. Antibody dependent cell mediated and complement-medicated cytotoxicity are not all that great by themselves. There is all kinds of work that can be done here with respect to increasing the engagement of the Fc region with it relevant receptors, tethering cytotoxic payloads and increasing penetration into the tumor with lower molecular weight non-antibody scaffolds. So innovation is not just about finding new biological targets.

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17. Tuck on April 29, 2010 10:42 AM writes...

I can appreciate the general rationale, but knocking off Rituxan? Lots of competition in the CD20 space already . . .

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18. Hap on April 29, 2010 10:50 AM writes...

But aren't all these effectively new strategies, or significant modifications of old ones? The product biologics won't effectively me-toos, because they'll be substantially different - but their development also doesn't mitigate any risks (and don't provide any sort of learning curve for entry into biologics). That also helps in part the business aspect, but only if they can show useful changes in properties.

So, they could be trying to get lots of innovation by developing better biologics, and there's lots of work to be done and knowledge to be gotten by them. The bad news is that that approach still comes with lots of risk and depends on drug discovery capabilities that they appear to be disassembling. Instead of being unoriginal, it's risky. I guess that's something.

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19. John on April 29, 2010 11:46 AM writes...

What I find fascinating about this area is the long term implications of perpetual "semi-exclusivity" for biologicals on healthcare spending and the future economics of the pharma industry.

The technical and regulatory barriers to entry for follow-on biologics are high enough to prevent the commodity pricing that occurs with patent-expired small molecules to ever really kick in, as there will always be only a handful of suppliers for each biologic. So we could see a real resurgence in pharma revenue 8 - 12 years out, with new drugs coming on line and the old ones never really going off line. Depending on the level of restraint the companies show on pricing, this may or may not lead to price controls.

Imagine a world in which Pfizer effectively had perpetual exclusivity on Lipitor.

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20. Dr. Manhattan on April 29, 2010 12:11 PM writes...

"Maybe they should make inhaled biologics."

Sure. Be sure to ask Pfizer about Exubera (inahled insulin) and how well THAT went...

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21. toxchick on April 29, 2010 1:07 PM writes...

Interesting post, but I don't agree about your take on generic biologics. Having worked at a company that was in the biosimiliar market, I am completely unconvinced that the FDA will approve any biosimiliars (especially proteins). I don't think there will be lower cost generic versions of the biologics anytime soon. For me, the nail in the coffin of biosimiliars was the FDA's decision not to approve Genzyme's scale up of Myozyme, but to instead require it to be developed as a new drug. If a protein is that different just from a scale-up--same company, same people, same cell line, access to all the previous data--no one will get something approved as an interchangeable biologic starting from scratch.

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22. Anonymous on April 29, 2010 3:23 PM writes...

Arguing that the FDA won't approve biosimilars is fine from a scientific point of view but surely assumes that the FDA won't buckle under political pressure. And I'm afraid the USA isn't the whole world. I'm pretty certain the regulators will work out ways for generics to be given a way in - but there may be a year or two's grace before it happens. But happen it will, and then all these new biologic business models will be washed down the plug hole.

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23. John on April 30, 2010 8:05 AM writes...

Sandoz Omnitrope is a US approved follow-on biologic to Pfizer's human growth hormone product Somatropin. For most biologicals there is no regulatory path for a follow-on product in the US, but Somatropin is unusual in that as one of the first biopharmaceuticals it was approved under the Food, Drug and Cosmetics Act (NDA pathway).

Most biologicals are approved via the provisions of the Public Health Services act (BLA pathway), to which the Hatch Waxman amendments providing for an Abbreviated New Drug Application pathway do not apply.

If memory serves, the recent healthcare reform bill contains provisions for follow-on versions of BLA drugs, but maybe someone can help me out here and jog my memory as to the details.

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24. petros on April 30, 2010 9:03 AM writes...

John's initial point is highlighted by Amgen's success in blocking any recombinant EPO product, other than its own, from the US market until 2015 despite epotein alfa having been launched in 1989.

A series of court cases have seen it block both sanofiaventis and Roche's attempts to introduce different and, in Roche's case, improved products from the US patent becuase of the family of process patents held by Amgen.

And yes the just passed bill (sponsored by Hatch) does enable the approval of biosimilars, with 12 years market exclusivity

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25. David Formerly Known as a Chemist on April 30, 2010 2:48 PM writes...

I read the WSJ article with amusement. It's odd that a company would adopt, as a major component of their strategy, the concept of "making better versions of someone else's product". The problems with that:

1. Easy to say, obviously very difficult to do (or else everyone would already be doing it).
2. PFE has very limited experience in developing biologics. PFE seems to be equating their consumption of Wyeth's vaccine expertise with deep experience developing monoclonal antibodies.
3. Big pharma believes they'll keep the cash flowing by making and marketing high-cost biologics that have much higher barriers to generic competition. The health care market can only absorb a limited number of these products at current price levels. If biologic products become more of a mainstream treatment option, prices will need to drop significantly.

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