SAN FRANCISCO - Fresh from a landmark, broad-ranging deal with GlaxoSmithKline plc, Theravance Inc.'s CEO Rick Winningham warned others in the industry about what he called "the seduction of prevalence" in developing drugs.
"A company cannot do everything well," Winningham told listeners in the grand ballroom of the Westin St. Francis Hotel here. "That's probably not only true for small companies, but for large, global companies" - and none should be led astray simply by the prevalence of an indication when choosing which compounds to pursue.
His remarks came during the Allicense 2004 conference hosted by Recombinant Capital and had particular relevance to the deal disclosed about a week earlier with GSK, of London.
The $129 million arrangement involves a put-call setup under which GSK could own as much as 60 percent of South San Francisco-based Theravance. (See BioWorld Today, April 1, 2004.)
Building on an alliance related to respiratory disease that has yielded Phase II data already, the deal covers therapeutic areas that include bacterial infection, respiratory disorders, urinary incontinence and gastrointestinal illness. GSK holds an option to worldwide licenses on potential drugs from all current and future programs through August 2007, the year that the overseas company could take a major stake in Theravance.
"I think blockbuster vs. niche' is a little bit of an oxymoron," Winningham said, pointing to Rituxan and Taxol as "perfect examples." Peak sales projections back in the early 1990s when Taxol began its development were around $200 million. "I think we were only off by about a factor of 10," he said.
Taxol (paclitaxel) was introduced as a chemotherapeutic agent in 1993 by Bristol-Myers Squibb Co., of New York. Rituxan (rituximab), for non-Hodgkin's lymphoma, is from South San Francisco-based Genentech Inc. and IDEC Pharmaceuticals Inc., of San Diego (now Biogen Idec).
Along with Winningham on the panel, titled "Strategies for the Winning Product Portfolio," was Myrtle Potter, president of commercial operations and chief operating officer for Genentech. Major successes such as Rituxan come about through continuing to evaluate the efficacy of drugs in other, previously unthought-of indications.
"The market for this drug, which last year generated well over $1 billion, really consists of only 300,000 people - it's a phenomenally interesting case study - but one of the things we have consistently done with most of our major brands is support small, investigational types of trials to really understand proof of concepts in other potential areas," she said.
Such studies have led the company to start looking into would-be applications of Rituxan and other anti-CD20 compounds in immunology, in which Genentech will put a "major emphasis."
Historically, success for the flagship biotechnology firm also has come by taking major risks, Potter noted. In the late 1990s, Genentech had begun to thrive and decided to put 50 percent of its revenues into research and development.
"It was probably one of the most gutsy calls ever seen, quite frankly, at least that I've seen in the biotech space and the pharma space, and luckily it paid off," she said.
Genentech has about 30 projects in development. The "incredible investment" in R&D yielded seven new products, the latest of which was Avastin (bevacizumab), the colorectal cancer drug approved early this year. (See BioWorld Today, Feb. 27, 2004.)
The company underwent another change about 18 months ago, as a result of a "rigorous debate" that involved the clash between opportunism and focus.
"Early thinking was that opportunism was king," Potter said. Anything that came out of discovery work was plowed into R&D. But then the forces Winningham cautioned against took over, and Genentech opted to limit its efforts to oncology, immunology and angiogenesis.
"We've had to make some really tough decisions," Potter said. "Probably about 18 months ago, we took what was then I believe around a 160-person sales force in cardiovascular [areas] and pulled that sales force back to under 100. I can't explain this, but the businesses are growing for the first time with fewer people."
Providing the big-pharma perspective was Jan Lundberg, executive vice president of discovery research for London-based AstraZeneca plc. The big pharma zone is not without inner dissent, Lundberg said. Since the 1999 merger of Astra AB, of Sodertalje, Sweden, and the Zeneca Group plc, of London, "the mega-brand' thinking has come over us at an earlier stage," resulting in "bigger Phase III programs than ever before."
An example is the anticoagulant Exanta (ximelagatran), for which AstraZeneca has submitted data from about 30,000 patients to the FDA.
"Of course, if our company continues to do [such large trials], it will be tough to get any money for the earlier R&D activities," Lundberg said, adding that he is "usually opposed [to] these enormous late-phase programs." At least at AstraZeneca, "commercial thinking has been somewhat dominant in recent years."
The Allicense meeting, with about 250 registrants, continues through today.