Blogs

Tony Gottschalk. Photo: Christine Fu

Safety and efficacy have long been the gold standard of bringing a new drug to the market. In our rapidly evolving healthcare industry, however, commercial success of therapeutics can no longer rest solely on these twin pillars. “Now there’s another dimension in that you have to prove value. You have to come to the table with a package that demonstrates where your product fits into the delivery of healthcare and what value it provides to the patients,” said Tony Gottschalk, director of Marketing Operations at Gilead Sciences.

How does a value-oriented approach influence strategies of different stakeholders? In a QED seminar held on Thursday, February 2 at UCSF Mission Bay, Gottschalk shared his personal perspective on emerging trends in the commercialization of new therapeutics.

Overall, the US medical system is faced with turbulent waters. Healthcare expenditure currently represents 17.6%-19.3% of GDP, and continues to grow unsustainably along with the aging population. Many big pharmas are plunging off “patent cliffs,” the precipitous decline in revenue upon patent expiration of blockbuster products. The 2010 healthcare reform, while beneficial for patients by expanding access to coverage, places downward pressure on pharmaceutical prices. Grappling with these challenges, pharmas appeared to be lagging on the innovation front, with decreased rate of new drug application and approval.

To help reduce the soaring healthcare cost, Obama’s 2009 stimulus package earmarked $1.1 billion for comparative effectiveness research (CER) studies, which compare the benefits and harms of medical interventions and inform the decision making processes. “CER is a big buzzword in the industry right now,” Gottschalk remarked. The demonstration of value through CER is vital in securing market access and commercial success. A drug that is safe and efficacious in clinical trials but proves marginal benefit in the market will fail to compete.

Gottschalk also noted a shifting power structure in the industry. The status of key stakeholder has transferred from pharmas to insurance providers. And with government agencies controlling the operation of CER, pharmas no longer provide the driving force behind product development. Big pharmas respond by forging alliances with insurance companies, such as the collaboration between Pfizer and Humana to share data on retrospective claim analysis and observational studies. One essential strategy for pharmas to cope with the changing landscape is to identify endpoints important to payers, and build them into early stages of drug development.

A glimpse into the pipelines reveals a trend of developing drugs for rare diseases. Despite the small market, such products command astronomically high prices. With the low-hanging fruit of drug discovery already plucked, this strategy appears to be economically viable within the short term, though unlikely to be sustainable in the long run.

The regulatory environment is also evolving significantly. Gottschalk commended the FDA for its effort in improving transparency and harmonization across divisions. He elaborated on Risk Evaluation and Mitigation Strategies (REMS), a relatively recent FDA-mandated program. REMS encompasses a set of tools the drug manufacturer puts in place to educate prescribers and patients on safe use conditions, as well as restrict drug distribution and monitor compliance. Gottschalk advised drug developers to consider REMS as early as Phase II of the clinical trials.

Gottschalk concluded the seminar on a more optimistic note. Venture capital funding for biotech has been on the rebound, and valuations are climbing for earlier stage merger & acquisition deals. For successful innovations, the rewards prove to be enormous. He encouraged the QB3 audience to rise to this new era of challenges, and “be bold, be inspired.”

Anabella Villalobos. Photo: Christine Fu

The number of possible small organic molecules spanning the chemical space is estimated to exceed 10^60 – a mind-boggling number. How could we navigate this enormous space efficiently to look for compounds of pharmaceutical value?

Medicinal chemists draw on the knowledge of how molecules interact with biological systems to predict their desirability as drugs. One particularly challenging arena of drug discovery is the central nervous system (CNS). This is essentially a “demilitarized zone” shielded from foreign chemicals by the blood-brain barrier (BBB), tight junctions between endothelial cells lining the capillaries. The dogma in the field has long held that high lipophilicity and low polarity are key attributes of a successful CNS-penetrant drug, allowing it to passively diffuse through the plasma membrane. This notion was challenged by Anabella Villalobos, PhD, head of Neuroscience and Antibody Directed Conjugate Medicinal Chemistry at Pfizer, in a Quadrant industry speaker seminar held on Jan 25 at UCSF Mission Bay.

Villalobos began the talk by posing a dilemma: Lipophilicity is a double-edged sword. In vivo toxicology studies have shown that more lipophilic and less polar compounds are more likely to induce toxic events, presumably due to their propensity of promiscuous off-target binding. How does one balance safety with the ability to cross BBB in neuroscience drug design?

Villalobos’ team undertook an analysis of over 200 marketed CNS drugs and Pfizer candidates. They identified optimal ranges for six fundamental physicochemical properties that impact key in vitro pharmacokinetic and safety attributes. Marketed drugs were found to be highly permeable, not a substrate of the P-glycoprotein transporter which pumps molecules back into the blood, metabolically stable, bind targets efficiently, and demonstrate low in vitro toxicity. The task of medicinal chemists is to align these favorable drug-like attributes in one molecule to maximize the probability of clinical success.

Manipulating only one or two properties in drug design is too restrictive, Villalobos argued. Instead, Pfizer scientists created a CNS multiparameter optimization (MPO) algorithm that utilizes the six physicochemical properties and calculates a desirability score for each molecule. 74% of marketed drugs exhibited high MPO scores, which correlated well with alignment of desirable attributes, validating this method. Incorporating multiple parameters is also advantageous over a hard cutoff approach by expanding the chemical space of interest to drug discovery. Currently, 44% of CNS drugs heed the “high lipophilicity, low polarity” dogma, placing them in a higher safety risk quadrant within the chemical space. In contrast, only 11% reside in the lower risk quadrant (low lipophilicity, high polarity). Villalobos made the case for a need to not only overcome safety hurdles in the higher risk space, but also move beyond dogma and explore the lower risk space, while optimizing CNS penetration. She says that MPO will be used as a prospective design tool to facilitate this new direction of neurotherapeutics Pfizer is pursuing, accelerate the identification of promising compounds, as well as mine the patent literature for competitors’ leads.

The reports are published here and here.

Business consultant and educator Leonie Meima shares ideas on marketing and positioning. Photo: Christine Fu

From Malaysia to the UCSF Mission Bay campus, from a developing economy to a major hub of innovation in a 36-year-old industry, participants in QB3’s 5th annual Global Bio-Entrepreneurship (GloBE) course flew across 16 time zones this week to learn from the experience of Bay Area biotech.

The five-day course, a collaboration between the Malaysian government and QB3, brought together nine entrepreneurs, four government representatives, two investors, eight academics, and one media communicator. Most participants this year have ties with the biomedical industry, highlighting it as the major thread that weaves through the course.

“We structured the class this year to focus more on the lean startup idea,” says GloBE director David Charron. The concept of “lean startup,” according to QB3 associate director Doug Crawford, encompasses a relentless pursuit of only what brings value to customers and striving for capital efficiency. Attendees were introduced to the Silicon Valley biotech ecosystem by an extraordinary panel of local entrepreneurs, venture capitalist, angel investors, and business development experts. Through lectures, case studies, and small group projects, they explored strategies to achieve “leanness” at progressive stages of a startup’s life cycle.

“This is not a one-hit class,” Charron says. “The Malaysian government has taken on a long-term view in developing the industry. I’m feeling very positive about how they’re building up that ecosystem.”

The Biotechnology Corporation (BiotechCorp), a privately-held agency under the aegis of the Malaysian government, sponsors GloBE. BiotechCorp has supported 207 local life sciences companies since its establishment in 2005. However, fewer than 10% of these ventures are founded upon home-grown technologies, according to Yazid Hamid, senior vice-president of strategic planning. The goal of their partnership with QB3 is to train scientists to become leaders in taking technological innovation through commercialization.

This year, BiotechCorp selected three biomedical devices companies and three contract research services companies to attend GloBE. These include freshly minted startups as well as three previous participants that demonstrated continued growth. Hamid also stresses adapting the Silicon Valley model to the unique circumstances of his country. Having no “deep pocket” for risky and lengthy pharmaceutical R&D, the emerging trend in Malaysia is to emphasize value-added services development. “We focus on the capabilities that we have, package them and promote development with different countries.”

GloBE students engage in a small-group project. Photo: Christine Fu

Undeterred by jet lag, participants were impressively interactive, asking intelligent questions and engaging in lively discussions. Lee Hong Boon is the director of a startup founded in 2011 called AseaCyte, specializing in primary cell culture products and analytical services. She enjoys the hands-on workshop format, and has been working hard on assigned reading from “at least five kilograms” of textbooks.

Romli Ishak, managing director of Granulab, is an alumnus of the 2008 GloBE. His company was founded in 2007 and produces synthetic bone graft substitutes for surgical applications. He credits GloBE for helping him understand the value of IP and filing two patents.

Another returning student, Calvin Thien, says that his molecular diagnostic services company DNA Laboratories has benefited from the marketing strategies he acquired from the 2008 GloBE. He also appreciates the networking opportunity with fellow Malaysian entrepreneurs.

Mahaletchumy Arujanan, executive director of Malaysian Biotechnology Information Centre (MABIC), will file a report on GloBE in her monthly newspaper The Petri Dish. “It’s a really good experience to see how a very conducive ecosystem exists, and why it’s so important to have this ecosystem to drive biotech enterprises,” she says.

At a Thursday evening reception hosted by Neopeutics, QB3 director Reg Kelly urged our Malaysian guests to “pat yourselves on the back.” He congratulated Malaysia as the only country to take a risk and do something imaginative by committing to this multi-year partnership with QB3. “You as a country have done something that, in our experience, no other country has ever done.”

GloBE wraps up this afternoon. To connect with friends and alumni of the course, look up their LinkedIn network.

Troubled capital market presents challenges for the biotech industry, but new mobile medicine technology holds enormous promise, Burrill explained. Photo: Christine Fu

Imagine: wearable and ingestible biosensors continuously monitor your vital signs and metabolic profile, and analyze them for anomalies. Medical data is transmitted wirelessly to your doctor, who writes a custom prescription based on your personal genetic information, emails it to your pharmacy who then delivers it by FedEx.

Still sometime in the future, yes, but this scenario is no longer strictly science fiction territory. “Most of the innovation in the world today is going to be disrupting how we deliver health care, not just…what we do about inventing health care,” G. Steven Burrill, founder and CEO of Burrill & Company, urged aspirating entrepreneurs to think outside the box at his annual State of the Biotech Industry address on Jan 9 at UCSF Mission Bay, presented as part of the “Idea to IPO” course sponsored by the UCSF Center for BioEntrepreneurship.

Burrill shared insights into main trends affecting the industry in 2011, as well as challenges and opportunities going forward. “The world has gotten really messy,” he said. The European debt crisis has intensified global financial turmoil, making capital scarce and expensive. Sixteen US life sciences companies managed to go public in 2011, compared to twenty in 2010. On average, they sold 28% more shares, raised 13% less money than they desired, and their shares fell 29% from the IPO prices by year end.

Given this unfavorable financial climate, is it viable to enter the biotech industry? Burrill pointed out that while big pharmas scramble to modify their business models, scale back R&D and focus more on merger and acquisition, smaller biotech companies continue to be the source of innovation. The biotech sector worldwide raised $82.4 billion in 2011. Capital is available globally, but entrepreneurs need to be aware of regional differences and explore emerging markets such as China, Russia and Brazil.

The changing landscape of health care was a resounding theme in Burrill’s talk. Currently 55% of drugs used in the US don’t work for the patients, who are genetically distinct and respond differently to treatments. Such ineffectiveness amounts to massive waste and poor quality of care. In November 2011, US patent expired on Lipitor, Pfizer’s best-selling drug , heralding an end to the era of one-size-fits-all blockbuster pharmaceuticals. Meanwhile, personalized medicine is making headway with the FDA approval of Roche’s Zelboraf and Pfizer’s Xalkori. Both drugs were developed with companion diagnostics to stratify patient groups and tailor dosage to their specific disease status. “Personalized medicine is a giant opportunity for us to move from the current dysfunctional sickness care system to an efficient wellness care system,” Burrill predicted.

How is personalized medicine going to be delivered? Burrill held up his iPhone. “There are 7 billion people in the world today and 6 billion of them have cell phones.” He argued that smartphone technology has the potential to empower patients, cut costs, and revolutionize the way medicine is practiced in the digital age.

This enlightening idea inspired me to look up advances in digital/wireless/mobile medicine after the talk. Thirty years ago, when “digital” in medicine referred exclusively to rectal examination (hat tip to Dr. Topol), who would have anticipated the advent of apps that track health data, measure blood pressure, analyze sleep patterns, and monitor blood glucose levels? Brave new world indeed.

To delve deeper into this trove of emerging opportunities, check out the upcoming Burrill annual meeting focusing on digital health.

Refactored hopes to hit it big with artificial spider silk. The critter shown is a Florida golden orb weaver, which the startup uses to produce silk for calibrating its equipment. Photo: Christine Fu

How much time per day do you spend “enabling awesome?”

“Most of the day,” says Dan Widmaier, CEO of startup Refactored Materials, created with the aim of manufacturing spider silk on a commercial scale. At a recent QED seminar (January 5 at UCSF Mission Bay), Dan recounted his journey from having an idea to forming a company.

While in the PhD Program in Chemistry and Chemical Biology at UCSF, Dan and fellow student Ethan Mirsky in Chris Voigt’s lab developed techniques harnessing Salmonella to produce spider silk, a material prized for unparalleled strength and toughness. Berkeley student David Breslauer came on board in 2009, and the three launched a company to engineer ideal silk proteins using Dan and Ethan’s synthetic biology know-how, and spin them into fibers using David’s microfluidics expertise.

The trio started applying for grants to raise seed capital. Both their NSF and Army SBIR applications were funded, despite the < 20% success rate, and they also won a Catalyst Grant from QB3. They started operations at the QB3 Garage@UCSF in 2010 with $600k. Speaking of differences between government grants and venture funding, Dan appreciated the freedom provided by the former in exploring their direction (“take our hammer and go searching for nails”). By contrast, Dan cautioned, with additional investors comes greater pressure and much less leeway for trial and error. The company recently landed a Series A round, and relocated into the QB3/Mission Bay Innovation Center.

Addressing many graduate students in the audience, Dan stressed the importance of a personal “exit strategy.” Juggling the need to publish, satisfy the advisor/committee and run a company can be highly stressful. Your graduation timeline and transition into full-time commitment with the company need to be planned well in advance. The timing worked out perfectly for them, but theirs is an atypical example, Dan warned.

David Breslauer and Ethan Mirsky, co-founders of Refactored. Photo: Christine Fu

Ethan and David, who sat in the front row, shared an obvious rapport with Dan, driving home his point about selecting the right people to be co-founders. All three agreed on taking the advice from other people (including themselves) with a grain of salt and only cherry-picking those that apply to you. “This is a story, not a road map,” Dan added. Lessons he learned include the slower and nonlinear maturation curve of biotech versus tech companies, as well as modest control over timing. He suggested that you should be prepared to bring in people with non-technical expertise, be flexible, and anticipate your ideal role from the early stages.

In terms of grant application tips, knowing the program managers is on top of Dan’s list. They differ greatly in their inclination to fund risky proposals. It’s essential to tailor your application to the appropriate section. He also suggested picking the brains of previous awardees, and checking in with funding agencies frequently to keep abreast of their shifting priorities.

For venture capital funding strategy, one secret weapon is to play hard to get. That ties in with the “most important piece of advice in the history of advice” according to Dan: take a negotiation class! All three have found it paid off tremendously when engaging investors. You, too, can enable awesome: for more information on the course they took, click here.

2012 is right around the bend. What might QB3 get up to over the next year? We talked to our director, Reg Kelly, who gave us a peek into his plans.

In the coming year QB3 will link more with patient advocacy groups to better understand the needs of the medical community. This will guide research, technology development, and entrepreneurial investments to fill these needs. “We are trying to be more user-driven in our innovation,” Kelly says. Targeting patients as users of biomedical innovations and catering to their needs taps into a huge market potential, attracting investors to the table. Ultimately, the products brought to market will provide critical solutions to improve health. Kelly will be working with Margaret Anderson of Faster Cures to develop a collaboration in the coming months. Faster Cures is a D.C.-based non-profit that bridges research, industry, policy, patients and investors to accelerate and improve healthcare.

Along these lines, Kelly would like QB3 to become a leader in the emerging field of systems pharmacology. This area of research uses computational biology to develop multi-drug cocktails against diseases, such as some types of cancer, that are resistant to single drug treatments. “I would like to see QB3-UCSF develop more of an international reputation for excellence in a scientific area,” Kelly says. “We have the top-ranked pharmacy school in the country, and strong research programs in genetics and systems biology. This puts us in the sweet spot to become a powerful player in the field of systems pharmacology.” He suggests bridging all three QB3 campuses to accomplish this. UC Berkeley and UC Santa Cruz offer computational expertise to perfectly complement UCSF’s expertise in medicine.

QB3 also aims to improve the efficacy of its entrepreneurial programs in the upcoming year. “We have the basic elements of what we do in place, but we have to execute better,” Kelly says. QB3 will work with Deloitte consultants to identify weaknesses and areas to work on. Formalizing and systematizing programs will be a top priority. “The Startup-in-a-Box program is a good start,” Kelly says. “We plan to do more along those lines.” Kelly suggests a similar mentoring program to enrich the incubator experience, providing startup scientists with business management skills. Overall, developing a playbook for the QB3 experience will improve both efficiency and efficacy in accomplishing program goals. On a larger scale, such a playbook will serve as a model for other organizations who would like to follow in QB3’s footsteps.

Stay tuned to the QB3 website as Reg & co’s new plans, collaborations and innovations unfold over 2012!

Neuroscience is a particularly challenging field in drug development. Complexities in molecular signaling and electrical circuitry make it difficult to understand disease and design treatment. And the blood-brain barrier stands in the way of therapies. Pfizer has developed special techniques to predict how the brain absorbs—and expels—chemical compounds. On Tuesday, December 6, Jennifer Liras, PhD, senior director for neuroscience pharmacokinetics, dynamics and metabolism at Pfizer, shared the details of some of the company’s tactics in a Quadrant industry speaker seminar.

The brain is arguably our most vital organ, and is extremely sensitive to chemicals in its environment. The blood-brain barrier protects the brain from damage by keeping many foreign and natural molecules from entering. It surrounds all blood vessels that feed the brain. It is composed of a single layer of cells, tightly bound together. Molecules in the blood cannot leak between cells, but can pass through the cells to reach the brain. This is called “permeability.” Pfizer, Liras said, uses permeability experiments in the laboratory to predict whether a drug will cross the blood-brain-barrier to reach its therapeutic target in the brain.

Pfizer also considers drug efflux, which is mediated by transporters located in cell membranes. These transporters actively pump foreign molecules out of the brain. Pfizer uses laboratory experiments and animal models to predict efflux.

Drug candidates with high permeability and low efflux are the most promising and predictable. These are ideal for carrying forward to human clinical trials. Drug candidates that do not meet these criteria require further analysis to predict complications. Mathematical modeling provides a powerful tool, Liras said.

Pfizer uses physiologically based pharmacokinetic (PBPK) modeling to further assess drug candidates that are actively transported out of the brain. This technique calculates a predicted drug distribution using mathematical equations that describe physiological and compound-specific parameters. Physiological parameters include surface area, volume and transporter abundance in various tissues. Compound-specific parameters include metabolism, protein binding, permeability, and extent of transporter interaction. Parameters are measured in laboratory assays and animal models and then applied to the mathematical model.

Thus far Pfizer is pleased with the accuracy of their initial attempts at PBPK modeling of blood-brain barrier penetration, Liras said. However, inconsistency between pre-clinical animal models and human systems is troubling. The predictive power of rat and dog models is similar but inferior to non-human primates. Liras wrestles with the issue of balancing accuracy with ethics, she said.

Pfizer continues to refine their PBPK model as a way to identify promising neuroscience drug candidates. In the future they hope to incorporate this algorithm as a computation tool to aid medicinal chemists in the initial stages of drug design.

Increasing costs and diminishing returns of pharmaceutical R&D have led venture capitalists to shy away from making investments in the biomedical industry in recent years. Those who do invest do so at a much later, less risky stage in development. This leaves pharma companies struggling for enough capital to bring treatments from target identification to clinical trials, or even pre-clinical testing. Small startups may be hit hardest, but even industry giants like Abbott are feeling the burden, says Nicole Walker, director of Abbott Biotech Ventures. She outlined Abbott’s strategy to offset these costs at the QED@QB3 seminar on Thursday, December 8 at UCSF Mission Bay.

The cost of developing a single drug exceeds 1 billion dollars. For a large company like Abbott, with dozens of drugs in their pipeline, the costs add up fast. Many large pharmaceutical companies have diminished costs by decreasing in-house early stage R&D. Instead, they reallocate these funds to purchase startups who have already carried projects to later stages in development. Augmenting their pipeline using this strategy averts some of the risk and is less costly, Walker said.

Abbott has taken a slightly different approach with corporate venture investing, realizing that many promising startups don’t have the funds to carry a project far enough. Many struggle at the critical stage of IND filing through phase IIa clinical trials. Abbott develops early partnerships with these companies, investing money and operational resources to carry the project forward, with the end goal of acquisition when the project has progressed sufficiently.

This strategy is not as risky as early acquisition, Walker said, as Abbott is not committed past the initial investment. If the project takes a turn for the worse, Abbott has an easy exit strategy. Abbott also shares the financial burden with other venture capital firms who trust Abbott’s expertise to guide their own investments. It is also less labor intensive, as Abbott leaves the R&D efforts up to the other company. Overall, Walker estimates that an investment of $20 million saves Abbott an equal amount in R&D costs, while minimizing risk and enhancing Abbott’s pipeline and long-term growth.

In looking for investments, Abbott balances the interests of venture capital and pharmaceutical development. As venture capitalists, they ask questions about end market potential, such as how the product will be viewed by physicians and insurance companies. But it’s not all about commercial return, Walker said. Abbott is equally vested in the assets themselves. Abbott is particularly interested in augmenting their pipeline in therapeutic areas they are known for, such as immunology, neurology and oncology, as well as in expanding fields like women’s health and renal disease.

So how has it worked out? Abbott has approved eight corporate venture investments since the program was established in 2009. The competition is fierce, with only 1% of applicants chosen for investment. Most come from the US, but Walker and her colleagues review applications from around the globe. Thus far Walker is pleased with Abbott’s investments, which have ranged from small $200,000 seed stage funding to large $10 million dollar deals. While some have already paid off financially, the full value of the assets won’t be clear for a few years.

The 2008 collapse of the US financial market changed venture capital investment strategies in a way that has left medtech and biotech startups out in the cold, Allan May, founder of Life Science Angels, said at his QED talk Thursday, December 1 at UCSF Mission Bay. May described those changes, which have rocked biomedical entrepreneurship in the last few years, and suggested some future strategies for securing funding. Download his slides

Venture capital funds have dwindled considerably since 2008. The number of venture firms in the US has dropped from over 1,100 to under 450, and the total budget of the VC industry has dropped by two thirds. Only 30-50 firms remain that invest in medtech or biotech, and of those, even the largest are pulling out.

Why? The answer is threefold, says May. The cost and time to exit has increased (estimated at $30-80 million in 4-7 years), while profits upon exit have decreased (<$125 million). By contrast, the Web 2.0 and digital media industries, which require almost no capital to begin with, have decreased cost and time to exit and increased profits. Given the chance to invest in cancer or video games, VCs are choosing video games, May says.

May blames the FDA for these problems. The amount of time and capital spent on studies and in bureaucracy is out of control, he says, and even then the chances of approval are risky. The business model is unfinanceable.

Those still interested in biomedical innovation and investment are going overseas. Review times in Europe are less than one quarter of those in the US (time from first communication to clearance is 11 months vs. 54 months for PMAs, and 7 months vs. 31 months for 510Ks). Approvals are also more forthcoming, with the most advanced cancer therapies, newest minimally invasive surgeries and latest implants all available offshore years before they are in the US. Medical tourism is growing at more than 35% per year. Even some US hospitals and insurance companies are sending patients oversees for cheaper and more advanced treatments.

May suggests rethinking biomedical entrepreneurship to fight the offshore trend. New business models that highlight cost-effectiveness will have to replace old models that are no longer viable in today’s marketplace. This means using less capital to provide better patient outcomes while lowering the cost of quality healthcare. Innovators themselves will have to put as much thought and creativity into their business strategy as they do into their science. A positive business model should be used as the selling point to angel investors.

Angel investors are the best financing pathway for medtech and biotech entrepreneurship, May says. They have been picking up the slack left by VCs. While venture firms have dwindled, angel groups have tripled in the last ten years. Angels favor early stage investments, providing 90% of outside equity for seed-stage funding at approximately $20 billion/year (VC seed-stage investment is only $0.3 billion/year). The interests of angels are also more aligned with those of founders and entrepreneurs. May suggests networking with angels to best formulate your business model and to find the right angel for your venture.

Resources provided by May:

www.angelcapitalassociation.org

www.angelresourceinstitute.org

www.ownyourventure.com

www.pwc.com/innovationscorecard

Trends in Life Science Investments and Exits, Oct 2010, SVB analytics

Medical Device Investing: 2010 and Beyond, Start-Up, Vol 15 No 10, Dec 2010

FDA Impact on Medical Innovation, Nov 2010, Meer and Makower

“Academic biomedical science has a much narrower bandwidth than it perceives. And most medicine lies outside that domain,” Don Ganem, MD, Global Head of Infectious Disease Research and VP of the Novartis Institutes for Biomedical Research, said on Tuesday, November 29 during his talk in QB3’s Quadrant industry speaker series.

Ganem is not bashing UCSF or other academic centers. He is pointing out a huge blind spot of academic science that needs to be addressed if translational research is to fulfill its promise in the clinic.

Ganem himself spent the first 30 years of his career as an academic physician-scientist at UCSF. He even directed the Biomedical Sciences graduate program here. But transitioning to a leadership role at Novartis last year broadened his perspective of how to effectively approach biomedical research.

At Novartis, Ganem has to consider aspects of biomedical science beyond the scope of target molecules and pathways in the lab. Compound formulation, toxicology, pharmacokinetics and other complications arise when developing compounds for use in living organisms. Many of these critical issues are left unstudied by academic scientists. As an example Ganem cites the fact that only five academic researchers study bacterial efflux and permeability issues, which account for most drug resistance. The entire field of microbiology is focused on the wrong problem if the goal is to develop a new generation of effective antibiotics, Ganem says.

Perhaps even more importantly, academic science is out of touch with the needs of the medical community. One of the first questions that Novartis considers in initiating a project is ‘what is the medical need?’ Ganem, who was an acting physician until December 2010, uses his experience in treating patients to identify these needs and appropriately direct projects to fill them.

This clinical perspective is strikingly absent from academia. Top-tier publications like Cell and Nature Medicine pride themselves on covering cutting-edge biomedical science, but not a single physician has served on either editorial board in the last 10 years, according to Ganem. How can a group of scientists determine what is cutting-edge in medicine without any input from the medical community? He calls these publications a “collection of party tricks, like how to turn a cell blue.”

Even in elite medical schools like UCSF, the study of clinical disease is an enrichment activity, rather than a core necessity, Ganem says. He found that his interest in clinical medicine was not shared by most of his colleagues at UCSF, who tended to phase out their clinical practice in favor of studying molecular mechanisms in the lab.

Attempts to blend medicine with academic research have fallen flat, Ganem says: “The UCSF Biomedical Science program has lapsed back into a fairly traditional graduate program.” He is disappointed in the narrow scope of coursework, despite the breadth of information availableGanem declares the fact that anyone can get a PhD in biomedical sciences without learning about immunology or medicine is a crime.

Without exposure to clinical medicine, biomedical researchers focuse on diseases with high visibility in the media and scientific publications, rather than the true medical needs of practitioners and patients. Ganem cites hospital acquired infections and kidney disease as examples that don’t get much press or attention in academia, but are common and often lethal problems in the clinic. A whole world of medicine exists outside of “big-ticket” items like cancer, and these needs are not being met by academic biomedical research, he says.