The Oncology Revolution: Feb 28 event at Harvard Medical School

I attended an excellent oncology event at Harvard Medical School recently, organized jointly with TiE Boston’s Lifesciences & Healthcare Group (which I co-chair) and the Harvard Biotechnology Club. The event was organized by Pushwaz Virk, Anna Chodos and Kanchan Mirchandani, with support from Jugnu Jain. There were several presentations, and a panel discussion. The presenters and panelists included:

• Steven Tregay, Managing Director, Novartis Option Fund
• Mara Aspinall, President, Genzyme Genetics
• George Demetri, Director of the Ludwig Center, Dana-Farber Cancer Institute
• Elan Ezickson, Chief Business Officer, AVEO
• Mike Boss, Chief Business Officer, Xanthus Pharmaceuticals
• Janina Longtine, Chief of Molecular Diagnostics, Brigham and Women's Hospital

I’ve provided highlights from some very informative presentations, discussions and Q&A.

Thanks to our understanding of oncology, the 5-year survival rates in cancer have improved to 70%. Targeted therapeutics represent 66% of revenues (even though they represent only 40% of all drugs on the market).

• 2001: 15% drugs were targeted therapeutics
• 2006: 40% drugs were targeted therapeutics
• 2010: 60% drugs are going to be targeted therapeutics

Sidney Taurel, Chairman & CEO of Eli Lilly believes that targeted therapeutics can significantly drive up market share. Without compannion diagnostics, a cancer drug's market share would likely remain at 10-20% of a larger base. With companion diagnostics, the market share can rise to 80-95% of the nice; and provide 200-400% more revenues from the product depending on the niche covered.

There are currently 60 clinical trials for products that are already on the market in oncology that are recruiting for biomarkers. So interest in biomarkers is clearly growing.

However, the discovery process in Oncology is high-risk. Of all the oncology drugs that go into clinical trials, failure rates are high. Unfortunately in oncology, failure rates are high at Phase 2 and 3, which means a lot of money has to be spent before efficacy can be proven. To counter this risk, startups should go after multiple cancers at the same time, thereby improving their possible outcomes. However, ”Patient targeting continues to be a black box.”

• Phase 1: 60% success (move to next phase)
• Phase 2: 30% success (move to next phase)
• Phase 3: 40% success (move to next phase)
• Regulation: 70% success (move to market)

Oncology is a crowded marketplace with hundreds of drugs in development. Competition is intense, but that should not dissuade innovators and researchers. Genentech, the 800-lb gorilla in oncology drugs was in trouble not too long ago. Genentech raised $35MM in 1980, and produced four products since then. 1996 – Rituxan approval (was discovered at Idec), 1998 – Herceptin, 2004 – Avastin and 2004 – Tarceva. Two of Genentech's blockbuster drugs weren't even discovered there. So focus on the size of the market opportunity and the large unmet need.

There was a good discussion around standardization of diagnostic tests and innovation. One panelist said that even if Her 2 was arguably not the best antibody for Herceptin, it was the first. Instead, Fish tests may be better (in-situ hybridization) but these remain hard to implement and read. The panelists cautioned that the diagnostic should not be tied to the drug too early, or patients end up with sub-optimal tests with little innovation.

There is a problem with companion diagnostics. There is no standardization in the labs. When companies say – “Look for a 3-log reduction”, no one does it because they don’t know what this really means. The tests are not repeatable. RNA degenerates fast, so tests that involve RNA cannot be transported far. There is no input from industry on standardization of these tests. This makes it hard to scale. Pharma and diagnostics companies should focus efforts on creating standards at the labs. Home brews in particular should be treated with caution. Secretary of HHS says that there should be some oversight. ASCO/CAS said that Her2 Testing standards need to be adopted. Everyone in the industry is adopting the tests; need to drive standardization in the way people understand and use them.

The good thing is that we’re finally getting smart about discovery in cancer. Biopharma is one of the last things that America does well. In fact, we can tell now if we’ve hit the tumor target with six hours; this is real innovation. However, diagnostics are important but remain a challenge.

Europe is changing the way we pay for drugs. In the UK recently there was a landmark agreement where Velcade was approved for Multiple Myeloma. However, it came with a twist. The UK government said if it does not work, it would not pay ! Panelists agreed that companies should be incentivized to do deals like this, which would change corporate behavior and raise the bar on the drugs that are pushed by the pharma companies.

There was a final word on clinical trials. There has to be a reduction in patient trials; FDA data needs are staggering - and rising with the recent withdrawals (read Vioxx). Finding companion diagnostics may be that way forward - because 700 patient studies at $30,000 each are inelegant and extremely inexpensive. Since every cancerous tumor is unique, innovators must find better ways to identify the right patients and hit those targets. We need more structure-guided drug discovery, and it should be used on every every project.

Excellent presentations from Xanthus and Aveo Pharma.