Has Bio-Pharma Forgotten to Fail Early?

This is a guest post from Susan K Finston, President of Finston Consulting. Do you have a response to Susan’s post? Respond in the comments section below.

 When I started working for PhRMA nearly 15 years ago, the mantra was “Fail early, Fail cheap.”

Given the exponentially increased cost of advancing compounds pre-clinical into clinical research and through pivotal Phase II and larger Phase III trials, it makes sense for companies to investigate as many compounds as possible through early stage pre-clinical research and then cherry pick compounds for clinical trials based on a well-developed understanding of the compounds structure, toxicity and other key characteristics.

An R&D program that fails at the pre-clinical stage is far less costly than one that makes it through the Investigational New Drug (IND) application and into clinical trials, only to tank due to lack of efficacy or safety. So why are Bio-Pharma companies taking the opposite tack –  investing huge sums in late-stage compounds for R&D programs, with faltering results in late clinical stage trials?

Why are companies no longer ‘failing early’?

The same factors driving bio-pharma M&A strategy motivate companies to acquire late-stage research assets to fill depleted pipelines.
And cash-rich bio-pharma companies competing for a limited pool of late stage programs, bidding up the cost of acquisition (perhaps at times also hindering full due diligence).

In theory, these assets are lower-risk than early stage programs because they have reached the clinical trial stage. In practice, this has resulted in 30% failure rates at the Phase III clinical trial stage, with a further 50% attrition rate between the clinic and the marketplace, where  “peak sales projection is more art than science, and the art often looks rather comical in retrospect.” In sum, only about one third of launched drugs make back their R&D costs.

Good in theory, bad in practice …

It may be time to recognize that in terms of net-present value, later-stage compounds are not lower-risk than pre-clinical programs factoring in Phase III trial costs, likelihood of failure at Phase III (or before launch), and more realistic revenue projections,  into valuation of late-stage assets.

Given the foregoing, taking a case-by-case approach to acquisition of R&D programs at earlier stages of development would reduce overall risk, providing better long-run returns.

Failure is always going to be with us.  With ever increasing complexity and cost of human clinical trials, Bio Pharma would be better off taking the long view and at least failing earlier in the process at a fraction of the cost!

About the author:

President of Finston Consulting LLC since 2005, Susan works with innovative biotechnology and other clients ranging from start-up to Fortune-100, providing support for legal, transactional, policy and “doing business” issues. Susan has extensive background and special expertise relating to intellectual property and knowledge-economy issues in advanced developing countries including India and South Asia, Latin America and the Middle East North Africa (MENA) region. She also works with governments, s and NGOs on capacity building and related educational programs through BayhDole25. Together with biotechnology pioneer Ananda Chakrabarty, she also is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivo research. Previous experience includes 11 years in the U.S Foreign Service with overseas tours in London, Tel Aviv, and Manila and at the Department of State in Washington DC. For more information on latest presentations and publications please visit finstonconsulting.com.

The FDA’s modernisation of its bioprocess regulation

This is a guest post from the BiotechBlog Intern,  Fintan Burke. Fintan is a student at the School of Biotechnology at Dublin City University. Do you have a response to Fintan’s post? Respond in the comments section below.

It has now been more than a year since the FDA published a welcomed revision of the 1987 guideline “Process validation: General Principles and Practices” in early 2011. This guideline serves as a complete rewrite to its previous incarnation, eliminating outdated practices, putting more emphasis on scientific evidence and completely redefining its definition of “process validation.” This update follows in a wave of acts by the FDA to reinvent the way it tackles an aspect of life science that was initially poorly understood.

Initially this guideline was developed in response to concerns raised in the early 1970s that end-product testing to test process standards was insufficient. While this guideline led to a more direct and formal protocol for process validation, the broad language used throughout left many companies to follow their own interpretation. For example, the 1987 guideline states that the process efficacy should be validated by producing a certain number of batches in a row successfully, though it never actually mentioned an appropriate number of trials (eventually the idea of “Three Golden Batches” emerged among companies). As expresspharma also pointed out, the guideline put pressure on manufacturers to maintain the process that created these “Golden Batches” without needing to understand, or even control, the parameters that caused them.

In other words, as long as a process was proven to work enough times, being disciplined in this procedure took precedent to understanding it.

What followed were years of criticism of the FDA’s attitude to Good Manufacturing Process (GMP) guidelines. As discussed at globepharm, the FDA routinely failed to update its GMP standards by claiming such standards were only the minimum held, thereby shifting the responsibility to companies to keep their standards current. Though revisions were often promised, they never seemed to have come to fruition.

This all changed as part of the “Pharmaceutical cGMPs for the 21st Century” initiative launched in 2002, when the FDA began its review of the guideline to better the approach of quality control for the pharmaceutical industry.

The most obvious change to the 2011 edition was the new definition of process validation, which shifted from requiring only the end product as proof of good process to instead consistently checking the process designs throughout the product’s life cycle to see if standards are met. This meant that the 3 Golden Batches concept became obsolete and a new measure of process evaluation was needed. To this end the FDA also explicitly emphasised in its guidelines the need for a 3 stage process evaluation; a process is first designed based on previous process knowledge, proven to generate reproducible results and finally routinely verified to ensure the whole process is controlled.

This more holistic, life-cycle based approach is seen as a massive improvement to the 1987 guideline particularly since the wording now vividly states what is expected of the industry, while still being applicable to individual companies. Several new questions have surfaced, however. By deserting the 3 Golden Batches concept, companies must reassess how many batches must be tried to prove standards are met. This, as Dr Mike Long et al discuss, is one area where the new guideline remains obscure; it instead merely states that enough tests should be run to statistically justify going into commercial production. Another problem is that the guideline clashes at some points with EU regulations. Apart from differences in the wording of some principles, Annex 15 (article 25) of the EU Guide to GMP also seems to recommend the 3 Golden Batches method, directly contrasting the FDA’s efforts to quell its practice.

While changing regulation, the FDA is being proactive in its approach to enforcing these regulations. For example, a recent event held in Colorado allowed industry representatives to discuss with FDA representatives from that district some of the challenges encountered during inspections. In recognition of the growing multinational behaviour of product manufacture the FDA is also collaborating with the European Regulatory Network to monitor foreign companies in their own territories. This follows a successful application by the FDA to become a member of the Pharmaceutical Inspection Co-operation Scheme (PIC/S) in November of 2010, a process that required a lengthy review period that involved each division of the FDA applying individually to PIC/S in order to gain admittance, thus furthering its modernisation and easing pressure to establishing GMP guidelines.

There can be no question that the FDA has recently taken a turn for the better in trying to modernise its efforts in bioprocess regulation, an area it initially had failed to develop. Despite these improvements, criticism remains. It appears too that the FDA’s recent efforts are just the beginning of an international trend in reviewing bioprocess standards, with a major update to the European Commission’s GMPs in bioprocesses coming into effect early next year.

About the author:

Fintan Burke is a student at the School of Biotechnology at Dublin City University. His main fields of interest include biomedical therapies and recombinant organisms.  Fintan may be contacted at fintan.burke2@mail.dcu.ie .

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