Re-posted from the Cross-Border Biotech Blog
By Jeremy Grushcow
As part of the Gairdner Foundation’s 50th anniversary celebrations recently, there was a breakfast panel with a lot of brainpower (even for MaRS). Cal Stiller led a discussion by David Baltimore, Phillip Sharp and Corey Goodman who between them have three Gairdner awards and two Nobel prizes.
These top-notch scientists also have truly impressive corporate expertise: Board members of Amgen, Biogen and Limerick BioPharma. They turned their attention to “unclogging the pipeline.”
David Baltimore discussed reasons we’ve seen fewer approvals:
- Higher regulatory safety barrier.
- Low-hanging fruit is gone. A lot of targets are for diseases that are not fatal in the short term, which (see #1) creates a high safety barrier. Also, he says the molecular targets are harder.
Baltimore also identified potential areas of success: a subject area (immunotherapy) and a structural area (UCLA medical center’s translational research institute).
Phillip Sharp talked about the changing structure of early stage and translational funding.
- VC is re-thinking their model, but pharmas are reaching out earlier in the pipeline with incubators and academic outreach; and there is more public funding available to move products further along the pipeline.
- Trends he identifies: personalized medicine (patient-driven with $1000 genome); and a huge role for engineers and incremental improvements.
Corey Goodman starts with some stats:
- current success rate is closer to 1 in 25, not the 1 in 10 number still cited from the 1990’s
- cost of a new drug (R&D dollars divided by successful approvals) around $3 billion.
Nevertheless, Goodman sees upside due to huge unmet medical needs, deficient pipelines and vast academic output.
Will healthcare reform plans interfere with the United States’ (hidden) subsidization of global drug development through high prices?
- Baltimore points to $80 billion pharma deal that avoided price controls, but says prices are unsustainable.
- Sharp agrees that costs can’t be a bigger part of GDP, but it’s a big bucket even at current levels and there is room for efficiencies that don’t impact reimbursement.
- Goodman says importation can’t be prevented long-term based on a safety argument, so we’ll have to deal with pricing more globally [regardless of U.S. health reform efforts].
Aren’t early-stage acquisitions still (and permanently) the outliers?
- Baltimore thinks there will be a number of early-stage transformative technolgies that yield early successes, but VC and other early funders need to be more stringent and keep an eye on the long-term potential of even very early stage products.
- Sharp thinks that academia is not well-suited to disciplined discovery, and if the policy goal is to develop more products, we’ll need structural changes in academia.
The panel wrapped up on an optimistic note. Not surprising — how can you not feel good in Gairdner season? Speaking of Gairdner season, don’t forget to check out this year’s winners.
Jeremy Grushcow is a Foreign Legal Consultant practising corporate law at Ogilvy Renault LLP. He has a Ph.D. in Molecular Genetics and Cell Biology. His practice focuses on life science and technology companies.