By Jennifer Van Brunt
The pressures on biotechnology companies to perform are enormous. As last year's spate of clinical trial blow-ups confirms, investors are all too quick to punish companies whose drug candidates come up short in the clinic. And more often than not, these high-profile failures have come late in the clinical development cycle. In fact, industry critics have attributed this phenomenon to the tendency of biotech firms to skimp on Phases I and II so they can rush the whole product development process to completion. Thus, when there's an unpleasant surprise, it's more apt to show up in a Phase III trial.
There's no doubt that the financial constraints on all but the largest biotech firms are severe — especially if those smaller firms opt to take a product through the clinic without the assistance of a big pharmaceutical partner. And since about 62 percent of the cost of clinical development is spent on Phase III trials, it's understandable that a company that's tight on cash would want to minimize its expenses in the earlier stages.
In this respect, biotech firms act quite differently than the large pharmaceutical houses, explained Arthur Reidel, president and CEO of Pharsight Corp., a developer and purveyor of clinical trial design software. "In the large pharmaceutical companies, the majority of product failures happen early in the clinical development cycle," he said. "There's lots of activity in Phase II development," and what's ascertained at that stage has a major impact on what ultimately happens to the product. In fact, it's here where so many potential big pharma drugs get shelved. On the other hand, Reidel continued, "Biotech companies are much less willing to invest heavily in Phase II. Their Phase II trials are much thinner [than they are for big pharma]. Biotechs want to get into Phase III trials as early as possible. There are financial incentives to do this. But it means that many more product failures come later in development than they do for the large pharmaceutical companies."
However, one can't lump all biotech drugs together. Biological entities, such as recombinant hormones, face a unique set of challenges, while the small molecule drugs must confront many of the same issues as the new chemical entities that have traditionally been the purview of the large pharmaceutical houses, explained Stuart Koretz, Pharsight's vice president of medical affairs and business development. "There are two reasons why clinical trials fail. Either the drug itself fails or the trial fails to reach the desired endpoint," Koretz said. For biologics, failure is often a consequence of the complexity of the product, its dose-response relationship in humans, or "fuzzy endpoints" and the necessity of using surrogate markers to determine efficacy. For chemical entities, on the other hand, it's usually the trial design itself that's at fault, he said.
Saving money through prudent clinical trial design is a huge incentive to both biotech companies and pharmaceutical companies. According to Washington-based Pharmaceutical Research and Manufacturers of America (PhRMA), U.S. research-oriented pharmaceutical companies will probably invest $20.6 billion in research and development in 1998. This is almost 11 percent more than these same companies spent in 1997; and, in fact, they have essentially tripled their research investment in the last decade. One out of every five dollars of sales is being poured back into drug discovery as the major pharmaceutical houses step up their efforts to find new drugs, according to the PhRMA.
Even with such a huge funding commitment, drug discovery and development is a long, drawn-out process. Various surveys conducted by independent groups have shown that it takes anywhere from 11.5 to 15 years for a new drug to go from lab bench to patient — at a cost that could run anywhere from $350 million to more than $500 million. And that's just the drugs that succeed. For every one of those, there are as many as 1,000 that advance only as far as preclinical testing. And once into the clinical trial phase, an experimental drug still stands only a 20 percent chance of ultimate success.
New methods to increase the likelihood of clinical success have come to rely on sophisticated computer software that simulates clinical trials. Taking a cue from other industry sectors such as aerospace, a number of firms now offer software, consulting services or both to assist in the clinical trials design process. Palo Alto, Calif.-based Pharsight, which started its business in 1995, offers both. And with its acquisition last month of Scientific Consulting Inc., of Cary, N.C., Pharsight now offers software than encompasses the full spectrum of product development, from the earliest preclinical steps forward. "Scientific Consulting's WinNonlin software analyzes and characterizes the pharmacokinetic and pharmacodynamic properties of a new compound, while the Pharsight Trial Designer leverages this knowledge in the science-based design and planning of later clinical trials," explained Bob Powell, vice president of pharmacokinetics, dynamics and metabolism at the Parke-Davis Pharmaceutical Research division of Morris Plains, N.J.-based Warner-Lambert Co.
Pharsight has been selling its software — at $25,000 per single-seat license — since November 1997. It has no biotech clients, but its newly acquired division, Scientific Consulting, has three dozen or so. The most critical aspect of the software is to assist in the design of the trial per se. This involves bringing together all available information about the potential drug — from pharmacokinetic parameters to surrogate endpoint data — as well as all members of the product development team — from pharmacologists to biostatisticians — and performing "what if" dry runs on the computer. While computer simulations can never replace the actual response of human beings to drug candidates, they can at least predict what some of the outcomes might be. And by modeling the trial beforehand, they can also illuminate variables that might not otherwise have been taken into account in the design process. These include age and gender differences, for instance, which in the last several years have come to the forefront more than once as determining the success or failure of particular drugs. "Companies can't always anticipate all the variables in designing a clinical trial," Reidel explained. "But once they know what to look for, there's always a way to design for it." Added Pharsight's Koretz: "The challenge is to design the study as early as possible to ascertain whether the drug works."
But does this approach really save time and money? It will be years until that question can be answered in all fullness. The retrospective approach — in which Pharsight was handed actual clinical trial data (but not the results) and asked to simulate the trial — appears to have satisfied at least one pharmaceutical company.
And Parke-Davis' Powell explained, "The most expensive phase of clinical development is the multicenter clinical trials. If we can design those more effectively, we might drop the costs or do fewer studies. But, in the end, it will take some years to find out if that is actually true."