May 27 2011

Bridging the Valley of Death: Bringing New Drugs from the Bench to the Clinic


Image via hooverdambypass.org

To bring a new medicine to the stage of clinical trial testing requires on the order of $500,000 to one million dollars and then seven to ten years of clinical trials and around $800 million dollars before getting to market.  However, it is doable, and one can point to successful biotechs such as Genentech, Amgen, and Biogen – as they have all successfully brought innovative drugs to market.  Each of them successfully crossed the “Valley of Death” more than once.  The Valley of Death, within drug development parlance, is the time frame between lead compound optimization and first-in-human clinical trials.  Due to scarce funding, scores of promising new medicines have floundered and not made it through the Valley of Death.

The Council of Entrepreneurial Development (CED) Biotech Forum sponsored a recent conference on 11 May 2011 on the topic “Bridging the Valley of Death.”  There were four talks describing novel funding and drug development strategies to bring new drugs from the bench to Phase 1 clinical trials.  These ranged from traditional venture capital, for-profit alliance, non-profit alliance and the NIH.  All emphasized the virtual biotech model – instead of building infrastructure, using a network of pharmaceutical experts as consultants and contract research organizations (CROs) to move the lead compound through the Valley of Death.

A variation of the traditional venture capital model was presented by Christy Schaffer of Hatteras Venture Partners – the variation being that a venture capital fund, Hatteras Discovery, is solely dedicated to early stage ideas with close supervision by a consortium of pharmaceutical experts.  The novel idea is that this fund is dedicated solely to new biotech in the preclinical stage and that drug development experts will help to guide new drugs to a point where a Large Pharma partner may be interested.

Similar to Hatteras Discovery are venture capital funds that provide funding for medical researchers at certain institutions to develop their investigational drugs or devices from the laboratory bench to a Phase 1 clinical trial. The Partners Innovation Fund is financed by Boston’s Massachusetts General Hospital, Brigham and Women’s Hospital and outside venture capitalists to back technology and products. This new fund is a shift in university expansion, in that instead of building new hospital wings, the university is directing money flow into early development of promising new technologies developed at that hospital.

The second model was presented by Richard Basile of BioPontis Alliance, LLC.  This model is a for-profit alliance based upon the biotech sharing the intellectual property from the universities with BioPontis Alliance.  For this business model to function, the risks and rewards of sharing the intellectual property must be negotiated upfront.  Then a stable of experts in drug development, with close collaboration with the inventor from the university, will push the drug across the Valley of Death.  In one example, by working with partners from three prestigious universities, each with a patent that would not be strong enough for commercialization, there was sufficient intellectual property when combined to move forward to develop a diagnostic for lung cancer.

The third model was presented by John Didsbury of Drug Discovery Center of Innovation (DDCOI).  This model is a non-profit business model which derives funding from disease foundations and government funding sources.  Then, a consortium of drug development experts will use the funds to push new medicines into clinical trials.  This business model has more flexibility than the for-profit model for the following reasons:

  1. Rare diseases can be targeted.
  2. There is less pressure from investors to meet drug development milestones.
  3. This model is less encumbered by intellectual property issues.

The last model presented was from the NIH TRND program, an acronym for Treatment for Rare and Neglected Diseases.  In this model, the focus is on finding treatments for rare diseases that are neglected by large Pharma.  To reduce the cost of drug development, the NIH collaborates with small biotechs by providing:

  1. Funds for consultants and contract research organizations (toxicology houses and contract manufacturing organizations)
  2. NIH investigators and laboratories to conduct some of the research and development tasks.

In fact, Cato Research is involved in a pilot program with a small biotech and the NIH TRND program in testing a treatment for Sickle Cell Disease.  From Cato Research’s perspective, this model has the advantages of the energy and quick decision-making of a small biotech combined with the deeper pockets of a large biotech.

The hope is that, by using these models described above, scores of promising new medicines will be able to successfully cross the Valley of Death.  This will result in more drug candidates in Phase 2 trials; since the exit strategy of all these models described above is through acquisition of the drug by Large Pharma, this should help to strengthen the early phase drug pipeline of Large Pharma. Or these funding models  may give just enough of a boost to sustain a start-up biotech to bring their new medicine across the Valley of Death and on to the market and in the process, mature to become the next Genentech or Amgen.

This is a post by Will Lee, Ph.D. Will is the Director, Regulatory Affairs at Cato Research.