In Style, but... Out of Reach, Pt. 2

Image: Erica P. Johnson Pharmacogenomics holds the promise of delivering safer, better designer drugs--and profits--to pharmaceutical manufacturers. But the technology also poses a challenge to the industry's current, highly successful business model that relies on one-size-fits-all blockbuster drugs. For small biotech companies and large drug manufacturers alike, pharmacogenomics remains only one component of genome-based research and consumes only a small part of the $30 billion (US) in annual pharmaceutical research and development funding, according to the Pharmaceutical Research and Manufacturers of America (PhRMA). "It's an area where we are seeing movement, but it's not there yet," says Gillian Woollett, associate vice president for biologics and biotechnology at PhRMA. Scott Rakestraw, executive director of Orchid GeneShield, a unit of Orchid BioSciences in Princeton, NJ, says, "The main issue with pharmacogenomics from a business perspective is there is not any large demand." He compares pharmacogenomics today to the personal computer in the early 1980s. It was not until several years later, when new software applications were developed, that the personal computer took off. "The killer app[lication] has not yet been identified for pharmacogenomics." So far, corporate research using pharmacogenomics has centered largely on improving drug safety. Going forward, the technology is expected to be used increasingly to link diagnostics and therapies. Ultimately, industry executives say, pharmacogenomics will be used in early-stage research that may yield a significant number of better drugs only a decade or more from now. "Whatever way you want to look at it, pharmacogenomics is a trend that is growing strong and stronger and cannot be turned around," says Toni Schuh, chief executive of Sequenom in San Diego. Robert Toth, senior portfolio manager of the medical technology fund at EGM Capital, a San Francisco hedge fund, says the industry has some disincentives to invest in the technology. For drugs currently on the market, pharmacogenomics testing could only reduce the number of patients using a particular drug. When it comes to new product development, pharmacogenomics might also reduce the population recommended for a new drug, eroding big drug companies' ability to sell the huge, billion-dollar blockbuster drugs that support their massive research and marketing operations. "In fact there has been some negative lobbying taking place behind the scenes of the pharmaceutical companies that would slow down the adoption of this technology," Toth says. DESIGNING THE FUTURE Long term, Toth sees potential. Early identification of a genetic disease can lead to patients using a drug for many more years, thus increasing sales. And some drugs may be developed for lifelong use as prophylactics against genetic disease. "Ultimately I do believe that pharmacogenomics will be an integral component of this sector," Toth says, "but it is not at the forefront of people's minds. When they think about the technology, it's still in such an infant stage." Bristol-Myers Squibb has been using pharmacogenomics in early-stage research for three years, says Nic Dracopoli, vice president of clinical discovery technologies. "It evolved from something that needed to be watched to the point where you're seeing it increasingly involved in early development of compounds," he says. "If you take a slice of the pipeline at any major pharmaceutical company there will be relatively little involvement in the late-stage compounds. But in the early stages, in discovery and early clinical phases, it is much more significant." Dracopoli says the tools are useful in eliminating compounds early on because of safety and toxicity concerns. That saves time and money. Still, he adds, there is little business incentive for drug companies to use these tools on drugs that are already on the market. "But for new compounds that we're developing, clearly there are third-party biotech companies with the same opportunities," Dracopoli says. "If you don't do it, somebody else will do it." If pharmacogenomics can increase efficacy and get drugs past regulatory hurdles--the supreme goal of any drug company--it will translate to the bottom line. Better efficacy can also justify higher pricing, he says. Ruth March, head of the development genetics group at AstraZeneca's research campus in Cheshire, UK, says she has heard concerns in the industry about pharmacogenomics' potential effect on blockbuster drugs. "That is a reaction you do get from some people," she says. "We are trying to use genetics to support the development of drugs that will work for everyone. But when you have some patients with a particular type of disease, pharmaceuticals developed using genetics should be no threat to anyone. Patients and pharmas want drugs that work." SNP ACTION Pharmacogenomics research is benefiting from an industry-wide effort to map single nucleotide polymorphisms (SNPs). Britain's Wellcome Trust contributed $14 million (US), and 13 drug and technology companies contributed a total of $30 million to the SNP Consortium, which has mapped nearly 1.5 million SNPs and placed them in the public domain. The public placement allowed the consortium to block other researchers from putting intellectual property claims on individual SNPs. "It was definitely well worth the investment," says March, whose firm is a member of the consortium. "Research which previously would have taken us several months to complete can now be completed in a few hours. To those scientists in the lab, it is making a huge difference." Companies involved in pharmacogenomics say insurers have indicated their products will likely be reimbursed because they may help cut down on healthcare costs. GeneShield is focusing on adverse drug reactions which Rakestraw says result in 50,000 deaths and $10 billion in wasted health care spending each year. The company is about to roll out a product that for less than $200 will test patients' genetic makeup against a range of drugs to determine which is best for each individual. Photo: Courtesy of Curagen Corp Michael McKenna CuraGen uses pharmacogenomics to screen compounds for safety and toxicity early in the drug development process, says Michael McKenna, vice president of collaborative research at the New Haven, Conn.-based biotechnology company. McKenna says pharmacogenomics is only a part of the company's $200 million investment in a wide range of tools including gene expression and proteomics. "None of these problems come down to a single technology. You have to rely on an integrated platform." McKenna says companies ultimately may be forced into greater use of pharmacogenomic technology. "The FDA is seriously considering how this type of information is relevant to the classical indicators in clinical development," he says. "I wouldn't be surprised if some of these tools are mandated in two to three years." Long adds "I genuinely think pharmaceutical companies want to do the right thing. They want to develop a good drug, but they don't want to add more hurdles. Nobody wants more paperwork." Susan Warner (swarner@comcast.net) is a freelance writer in Philadelphia.

In Style, but... Out of Reach, Pt. 2

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