By Jennifer Van Brunt
The biotech product pipeline is full to bursting. More companies in the sector means more products in the clinic and — eventually — in the marketplace. Never before in the relatively short history of the biotechnology industry has there been such a wealth of promising products, some of them representing the first of their kind.
Exactly how many products are in the pipeline is a matter of some debate, for the various sources that track this information use slightly different criteria when compiling their lists. For instance, the Pharmaceutical Research and Manufacturers of America (PhRMA) included 350 products in its April 1998 survey of biotech medicines in development. PhRMA is a Washington-based organization whose members include the major pharmaceutical houses and not a few biotechnology companies; thus, the drugs contained in its report are produced via biotechnological means but may be sponsored and/or developed by either a biotech firm or a big pharma house.
According to the summer 1998 edition of the BioWorld Phase III Report, which tracks products in late-stage development (including Phase II/III trials) through filing for regulatory approval, there are some 240 biotech drugs in the pipeline. This is a marked increase from the 146 products included in the first issue of the BioWorld Phase III Report, which was published in the spring of 1995.
Another source of information comes from SG Cowen Securities Corp., based in Boston and New York, whose recently expanded team of biotech analysts tracks 100 companies in its core universe (the Cowen Biotech 100). According to the firm's March 1998 report, these 100 companies alone had about 300 products in clinical development.
The real number of biotech products in the clinic, of course, varies according to the user's precise definition of what constitutes a biotechnology product, a biotechnology process or a biotechnology company. But no matter which criteria are exercised in making that judgment, it's clear that the product pipeline is full. And, with the FDA taking to heart the goals and tenets of the FDA Modernization Act of 1997, it's likely that the pipeline will flow. (See BioWorld Financial Watch, July 13, 1998.)
Foremost among the unique therapeutics in this pipeline is Isis Pharmaceuticals Inc.'s antisense drug for treating AIDS-related cytomegalovirus (CMV) retinitis. The drug, newly trade-named Vitravene, garnered an endorsement from the FDA's Dermatologic and Ophthalmic Drugs Advisory Committee on July 22. If the FDA follows up on its committee's recommendation, Vitravene (fomivirsen) will be the first antisense drug — for any indication — to hit the market. Vitravene is an antisense DNA molecule that targets CMV messenger RNA, inhibiting the virus's ability to replicate. Isis (NASDAQ:ISIP), of Carlsbad, Calif., has partnered the product with Ciba Vision Corp., the Atlanta-based eye care unit of Swiss pharmaceutical giant Novartis AG. Because highly active antiretroviral therapy with protease inhibitors has become the standard of care for treating AIDS, the incidence of AIDS-related CMV retinitis has dropped significantly. This means the current market for Vitravene is likely to be modest — although demand for the product could grow as HIV becomes resistant to the new drug cocktails and the incidence of CMV retinitis rises once more.
Another first of its kind is the broad-spectrum antibiotic developed by Magainin Pharmaceuticals Inc. (NASDAQ:MAGN). The product, once known as MSI-78, then as Cytolex and now as Pexiganan, is a 22-amino-acid synthetic analogue of the natural host defense peptides — termed magainins — produced by the African clawed frog. Magainin, located in Plymouth Meeting, Pa., submitted its new drug application on July 27, seeking approval to market the topical cream as a treatment for infections in diabetic foot ulcers. London-based SmithKline Beecham plc has the North American marketing rights to the product, which Magainin claims is the first of a totally new class of antibiotics. Importantly, this means that no microbes have yet developed resistance to magainin peptides, as they have for most of the major classes of antibiotics.
A number of other important biotech products are pending at the FDA, including Centocor Inc.'s chimeric monoclonal antibody to tumor necrosis factor-alpha — Infliximab [formerly Avakine] — for treating Crohn's disease. On June 30 the Malvern, Pa., biotech company (NASDAQ:CNTO) received a "complete review" letter from the FDA, meaning that final approval could be just around the corner.
The medical community is also eagerly awaiting FDA action on Aviron's influenza vaccine, FluMist, which consists of an attenuated, cold-adapted live virus vaccine in a nasal spray formulation. The Mountain View, Calif., company (NASDAQ:AVIR) submitted a combined product license application/establishment license application on July 1. Although Aviron hasn't announced a marketing partner yet, just last week it signed a multiyear supply agreement with Becton Dickinson and Co., of Franklin Lakes, N.J., for the latter's nasal spray delivery system for administration of FluMist.
The Conundrum Of Funding
Despite such a rich pipeline of potential products, the prolonged negative financing environment for biotech and biotech-related stocks has made it almost impossible for companies to raise the cash they need to continue product development efforts. There are ways around this dilemma, of course. The most common is for the biotech company to sign on a big pharma partner for product development; the big pharma not only will finance the preclinical work on new drug candidates, but often will take command of all the clinical trials and regulatory filings involved.
Even if a young biotech company has the wherewithal to finance all the clinical trials itself — as well as shoulder the burden of regulatory submissions in the U.S. or even abroad — it usually signs a deal with a major pharmaceutical house to market, distribute and sell the product once approval has been granted.
Occasionally, a biotech firm will decide to market its own products. That plan takes cash, too, and Shaman Pharmaceuticals Inc. just raised about $14 million through a royalty-based public offering to support marketing of its lead diarrhea drug, Provir. That compound is still in Phase III trials for AIDS-related diarrhea and various Phase II trials for acute watery diarrhea (predominantly traveler's diarrhea). If it stays on schedule, Shaman (NASDAQ:SHMN), of South San Francisco, probably won't even submit a new drug application for the AIDS indication to the FDA until early next year.
Of course, there's no guarantee that this product — or any other drug candidate, for that matter — will garner the FDA's final stamp of approval. Even if it does, there's still no guarantee that the approved product will gain a foothold in the marketplace and generate revenues for the sponsoring company.