Biotech-Bashing: Is It Justified? (Part I)

It has been a matter of some concern for several years that the promise so loudly trumpeted by advocates of the biotech industry, namely, that the quantum leap in comprehension of biological systems and processes would lead to a new era in medicine, seems to have volatilized into thin air. Being, first and foremost, an ardent supporter of scientific and technological advancement in the biotech field, and secondly a researcher working in this domain, I feel it incumbent upon me to attempt to clarify some of the issues that have arisen concerning the biotech industry’s inability to develop novel drugs. I believe this clarification to be necessary for two reasons: First, the critics of the biotech industry (while no doubt well-intentioned) have often chosen to aim at the most visible – and therefore vulnerable – target in this field, i.e. research and development. While it is clear that R&D in biotech is prohibitively expensive, I feel that there is much evidence to support the case that expenses associated with R&D are by no means the sole, nor even the primary, cause of biotech’s alleged inefficiency in producing solutions to unmet medical needs. Perhaps it is time to pinpoint a bottleneck elsewhere. Second, I think that recent organizational changes within the industry itself have gone a long way towards addressing the typically raised peeves of the not-so-silent “majority”.

Where to begin? I shall seem perfunctory in my approach to most of the subjects I touch upon, as there is little scope to discuss them fully. However, I would like to state at the outset that I intend to take a more philosophical tack, with the aim of trying to elucidate some fundamental issues that continue to affect biotech’s growth into a fully developed and therefore respected industry. In general, biotech still suffers greatly from the fallout of the bursting of the dot-com bubble in early 2000. The specter of biotech’s past (the ultra-volatility of the mid-1990s) has raised its ugly head, and young biotechs that had been created on the basis of so-called “platform technologies” and had never intended to enter the drug development business per se have recently been suddenly confronted with a very altered philosophy coming from venture capitalists. These last, rather than continuing to wax ecstatic about high-content screening technologies and the like, began to insist volubly that everything be bottom-lined. Rather than expecting to land lucrative partnerships with the big pharmaceutical companies, the money men argued, young biotechs should begin thinking about developing drugs on their own. Larger firms would not be willing, they said, to shell out millions and millions of dollars simply to get a license to databases containing terabytes of “potentially valuable” information. Rather, they had begun to want to see products with potential.

But even those large companies that made bets on comparatively late-stage products got burned. A notable example was Bristol-Myers Squibb, which literally lost its shirt on the debâcle surrounding Erbitux, a novel antibody therapeutic aimed at curing cancer. When Bristol-Myers’s partner on the project, a then-promising biotech firm called Imclone, suffered the ignominy of having its New Drug Application (NDA) thrown out of the window by the Food and Drug Administration, it seemed as if things were already pretty awful. Then came the harrowing tale of insider trading, investor bamboozling and the like, supposedly masterminded by Imclone’s CEO, Samuel Waksal, and his brother Harlan. The scandal snared even the hitherto unsinkable, the Queen of Home Improvement herself, Martha Stewart. However, in a nutshell, the case simply proved that large companies seeking to bet on late-stage products in the hope that this would place them nearer the finish line (with a marketable drug) might well be shooting themselves in the foot. Surely, it might be advisable to get involved at the start with a small biotech, getting to know its research and the quality of its people (particularly its management) before choosing to develop its product as a drug? Sometimes the short-term view can be disastrous. The typical product life cycle in the biotech industry is 8-10 years; with protein therapeutics, today all but immune to the threat of generic competition, it can be even longer. Obviously, patience counts for much.

This brings me to another basic point – the lack of patience in today’s society. It is clear that we look to advances in medicine more and more in order to address the enormous demographic shift currently taking place in most developed countries, namely the advent of a rapidly aging population in which a significant proportion of people are over the age of 65. However, the concern over this and its implications – in particular the potential loss of productivity and the “drag” that supporting retirees will place on social security structures – has seemingly begun to border on mass hysteria. Billions are being poured into research to identify cures for Alzheimer’s, Parkinson’s and other neurodegenerative diseases, as before we visualize dropping dead from a heart attack or being hit by a car, we begin to fear lying in a nursing home unable to comprehend quite what is going on. Here in the developed world, more or less sheltered from the scourge of AIDS or malaria or cholera, we fear most the advent of a time when, bereft of our minds, we still are not bereft of life itself. The lack of patience, fueled by the mass media, has a trickle-down effect. It has given rise to an amazing sense of expectation and pressure on researchers within the biotech industry. Tools have not become exponentially better, because the small companies that were developing them have been suffocated by a lack of funds – since they were not ostensibly involved in developing drugs directly. Yet, the expectations have gotten higher. Biotech researchers have, some belatedly, awoken to the fact that they are being asked every day to do more with less. Additionally, there is an insistence on in vivo data – meaning experiments to be done on animals – to maximize the chances of identifying products that will succeed in the clinic. While this may be viewed as a clarification of objectives, it is also necessary to remember that a mouse is not a man.

It is, of course, necessary to note that problems do abound within the biotech industry itself. As with many other areas in which corporate structures exist, bureaucracy and administrative inefficiency contribute greatly to an overall incapacity to function reliably with respect to information dissemination and prompt responsive action. Tremendous emphasis is placed on gaining the advantage with regard to intellectual property, but this has come at the expense of considering what might be best as a therapeutic for the patient. I am not of the opinion that generic drugs are necessarily the greatest alternative, but sometimes the patient has no choice. Also, the unwillingness to promote dialogue over the realistic prospects for generic drugs within and outside the biotech industry has led to some alarming tendencies. India, for example, does not have the wherewithal to combat either rampant patent infringement or widespread propensities of doctors to yield to company pressure by illegally prescribing toxic anti-cancer drugs as infertility treatments. This damages both the credibility of the health care system and discourages local as well as foreign investment into medical research with the aim of developing novel therapeutics. Biotech companies are also extremely wary of disappointing investors. The dot-coms were made to pay dearly for not having basic things like a sustainable business model or a defined product line. Now, biotech companies are continually made aware of the fact that investors are asking them the same sorts of questions. Biotech investors are more likely these days to have medical or scientific backgrounds, and are more than eager to put their investment targets’ chief scientific officers on the spot with detailed and probing queries about their companies’ pipelines. Within some companies, it is rumored that scientists often spend more time boning up for investor road shows than working in the lab directing and coordinating their enterprises’ scientific endeavors.

Investment in R&D by biotech companies typically far exceeds the approximately 18% of sales normally spent by even the most profligate of pharmaceutical companies. Here, of course, it is important to note that by biotech companies I mean what are generally comparatively small organizations (even if they are making money, which is often not the case) engaged in developing products based on what we know about the human genome. Pharmaceutical companies, on the other hand, are massive corporations (the biggest, Pfizer, is currently the 6th largest company in the world) and have far more diverse ranges of operations. They may rely entirely on developing drugs to fight diseases, but can also (which is becoming more and more the norm) concentrate their efforts on so-called “lifestyle drugs”, such as Viagra and Cialis (developed to treat the euphemistically termed ‘erectile dysfunction’), or Lipitor (an anti-cholesterol compound or ‘clot-buster’). The massive amounts spent by biotech companies often raise the question of the inefficiency of their research programs. Yet, it is amazing how little time is spent discussing how this so-called inefficiency should be addressed. A close look at the most productive programs indicates how beneficial the synergy between biotech and large pharma can be. Even better, the bigger biotech companies tend to operate like super-efficient pharma companies. At the management level, they have a clear understanding of the requirements for getting a drug approved. However, in the labs, a corroborative and focused approach is taken and there is no sign anywhere of the large-scale screening campaigns that pretty much embodied the practice of ‘slinging stuff at the wall and seeing what sticks.’ The combination of entrepreneurial thinking and the culture of the possible with cold realism and solid clinical expertise make for an excellent drug development paradigm. The successes of partnerships such as that of Novartis with Vertex Pharmaceuticals beautifully illustrate the effectiveness of melding scientific expertise with business knowledge. Selling drugs is still hard work, no matter what unmet medical need they are meant to address.