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Study identifies commercialization bottlenecks

Life sciences IP suffers from pinball effect in licensing as new indications emerge

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In a perfect world of life sciences licensing TTOs may dream of, a discovery made at a university is patented and licensed to a biotech company, which continues developing it until it has established proof-of-concept in humans. Then a larger firm with the capabilities to conduct expensive late-stage clinical trials swoops in and carries the molecule the rest of the way to FDA approval and market launch.

Unfortunately this linear model, though ideal, rarely plays out in the development of new drugs. Instead, the path to market is bumpy and laden with inefficiencies — from funding gaps to lag time as license agreements are sought and made between universities and companies.

A trio of business professors from Georgia Institute of Technology recently documented what they say are significant inefficiencies in the drug commercialization process and have offered their prescription for reducing the time and cost required for a new drug to reach FDA approval – which they calculate to be 13 years on average with a price of several billion dollars. What’s needed, they say, are more initiatives that encourage the sharing of basic research during the earliest stages of development. Matthew Higgins, Jerry Thursby and Marie Thursby in Georgia Tech’s Scheller College of Business authored the paper “Bench-to-Bench Bottlenecks in Translation,” recently published in Science Translational Medicine. Their analysis looks specifically at one challenge that appears to be one of the biggest areas of disconnect in life sciences commercialization: Inefficiences that occur as inventions are passed from university to company to company for development in indications beyond those in the original patent or license. (TTT readers can access the full paper here: http://stm.sciencemag.org/content/6/250/250fs32.abstract.)

They examined the twisting commercialization paths of some 835 patents involved in 342 license deals among universities and biotech firms to see how many compounds were eventually sublicensed to a second firm for development in a new disease category. Because companies rarely share their research, a sublicense essentially resets the development timeline — a process the authors refer to as bench-to-bench translational research.

They found that 27% of the inventions appeared in a second license agreement after an initial deal between a university and a biotech firm. This could indicate that a molecule progressed in development beyond a firm’s capabilities, or was found to have potential in an area beyond the interests of the initial licensor.

But most telling of the bottlenecks in early-stage development is their finding that, of the 92% of molecules that were at the discovery/lead molecule stage when they were first licensed, 70% of those eventually sublicensed were still in the discovery stage at the time of second licensing. And the average time between first and second licensing was 3.5 years — nearly a quarter of the average time it takes a drug to go from discovery to approval.

Four in five molecules involved in a second license saw some change in disease indication with the second license. This mean that new uses for drug candidates are often discovered during the mid-stages of development.

“During the earliest stages of study and experimentation, it’s highly unlikely that an academic lab can identify all relevant disease categories an invention may serve,” the authors write. And, because institutions typically guard specific information about their early-stage programs carefully, it typically takes years for a second licensee to emerge.

Open-source may open bottlenecks

Todd Sherer, former president of the Association of University Technology Managers and current executive director of technology transfer at Emory University, notes that the body uses the same mechanisms in a lot of different places, so it’s not uncommon for drugs to have more than one potential application. “But in technology transfer, we have to market a potential drug based on where our data is, even if there may be other indications,” he explains.

But if molecules could be driven into these different disease pipelines earlier in the development process, the authors reason, significant time and money could be saved. So they propose a series of initiatives that would encourage the sharing of basic research during the discovery stage.

One suggestion they make is the creation of an open-source information clearinghouse that would house records of patents and licenses for research intended to be commercialized, which could be coupled with existing clearinghouse clinicaltrials.gov. “Reporting into the database could be required by journals and for any research that receives federal funding, and the FDA could make reporting a requirement for any molecule that a firm intends to take into clinical trials,” the authors suggest. “Such an initiative would provide clarity on which areas of research and disease indications are pursued by specific scientists and institutions and help to diminish the information asymmetries that exist in early-phase translational research.”

Sherer says that although past attempts to create similar clearinghouses for IP and research information have been beneficial, he’s not overly optimistic that such a database would really have the desired impact. “One of the challenges we already have is there’s so much information available that it takes real time and expertise and luck to find all the information that’s there,” he said.

The authors add in their paper that the database could be coupled with legislation offering tax credits or extending market exclusivity for repurposed molecules, in order to make them more financially viable for companies.

Funding a higher priority

But technology transfer professionals say what’s needed first is more sources of funding dedicated to helping researchers advance promising discoveries to the proof-of-concept stage where they are more likely attract commercial partners.

“The law of the land is people will invest more money as risk gets reduced,” Sherer comments. “We’re all clamoring around for money, but you can’t get the money that you need until you’ve reduced risk.”

The National Institutes of Health established the National Center for Advancing Translational Sciences in 2011 to provide programs and resources to help researchers do exactly that. The network’s in-house chemistry, biology and pharmacy expertise, along with a network of service providers, may help make the process of developing and manufacturing a compound cheaper and quicker for companies and institutions.

Earlier this year, NCATS had its first major commercial success when Baxter International licensed a drug candidate for sickle cell disease that it had developed with AesRx researchers.

The center has programs specifically focused on rare disease and, fittingly, repurposing drugs.

The idea behind the New Therapeutic Uses program is that the pharmaceutical industry is sitting on a stockpile of compounds that either missed their target or didn’t provide an ample business opportunity for the company, but may still have potential to be repurposed. “We wanted to crowdsource these compounds, which already had rich data,” explains Lili Portilla from the Office of Strategic Alliances at NCATS.

For the pilot run of the program in 2012, NCATS rounded up more than four dozen agents from pharma companies, who contributed all the data that had been collected on the selected compounds they thought had opportunities to be repurposed. Information about the compounds was published on the NCATS website, and applicants submitted their ideas for what they thought they could do with the compounds.

Several hundred applications came in. “In some cases, the pharma company had already tried the idea; in other cases, they hadn’t thought of it,” she reports. NCATS eventually narrowed it down to nine projects that received funding to proceed. As a requirement, each funded project had to have a jointly developed project plan around the compound and an agreement in place to transfer the compound from the pharma to the applicant.

A second round of this program is in progress now, but Portilla emphasizes that the drugs involved have already had millions of dollars put into them and don’t fit the early stage drug candidates addressed in the research paper.

Michael Haag, executive director of technology management at Case Western Reserve University, likes the idea of the NCATS program but believes it would be hard to scale at an earlier stage, where it would really have potential to cut out some of the inefficiencies cited by the paper’s authors. “In the beginning stages, there’s just so much in terms of competition and confidentiality and not wanting to make things available,” he said. “I just can’t see any pharmaceutical company agreeing to that unless the government was giving them some protection and giving them incentives to do that.”

But what about gaps even earlier in the development timeline, when projects are still too new to even secure grant funding? Sherer says Emory is attempting to fill those gaps with Drug Innovation Ventures, a public/private venture that provides infrastructure and business expertise to researchers with promising projects at the very first stages. “It’s there to try to operate more like a biotech company using university funds, because no one [else] wants to invest in that space,” Sherer observes. Other universities like Drexel have similar translational research programs, but Sherer says Emory’s is “still an experiment in progress.”

Haag reports that Case Western has found another potential solution for securing partnerships early in the development process by working with a third party company that serves as an intermediary of sorts. “They go looking for these things — where you have an academic research institution like Case that comes up with new data for a model but can’t get access to the molecule,” he says. “They license those and then go deal with the bigger companies. For some reason companies seem to be more willing to work with other companies.”

Still, though, Haag said Case is trying to do what most others are, too: “We’re investing more and earlier in translational research.”

Contact Sherer at 404-727-5500 or ttshere@emory.edu; Portilla at 301-217-4679 or portilll@mail.nih.gov; and Haag at 216-368-6106 or mhaag@case.edu.


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