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Genetics may bring new life to failed drugs

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As pharmaceutical makers find it increasingly difficult to bring new drugs to market, they are turning to genetic tools to seek uses for medicines that failed to make it out of the development pipeline.

The discovery of new links between genes and diseases can help not only to design new treatments, but to salvage drugs that are shelved when they come up short in clinical trials.

The idea is "to take some of these compounds, capitalize on past investments sitting idle, and now selectively accelerate them in the development process," says Terry Hisey, a pharmaceutical-industry strategist at the consultancy Deloitte LLP.

The ultimate goal is to develop medicines tailored to patients with a particular genetic makeup or who have diseases with a particular gene variation that are more responsive to a specific treatment. While few have been fully realized so far, there are a small but growing number, such as cancer drug Gleevec from Novartis AG (NYSE: NVS) and NitroMed's (Nasdaq: NTMD) BiDil, a heart-disease medicine.

"There's a big buzz about it," says Edward Abrahams, executive director of the Personalized Medicine Coalition, a nonprofit education and advocacy group comprising industry, academia and government organizations.

While the markets for these therapies are smaller than for those that treat the general population, pharmaceutical companies are realizing there are hefty profits to be made because patients are more likely to use, and stick with, a tailored medicine that works better than a one-size-fits-all drug. For instance, biotechnology giant Genentech Inc.'s (NYSE: DNA) Herceptin, which is taken by women with breast cancer who have a particular variant of the HER-2 gene, reaped $1.3 billion in sales last year.

The broader shift toward so-called personalized medicine dovetails with pharmaceutical makers' recognition of how hard it is to maintain a business model that relies on producing a few drugs that bring in billions of dollars a year.

"The old sort of pharmaceutical model is under pressure right now," says Wayne Rosenkrans, chairman and president of the Personalized Medicine Coalition. "Personalized health care is one of those potential solutions."

Drug development typically can take 10 years or more. Failures cost companies both time and money, from $15 million per compound at the first stage of human testing to $86 million in late-stage trials, according to a 2003 study on the cost of drug innovation published in the Journal of Health Economics. Historically, these cost have increased over time above the rate of inflation, but there aren't more recent data available for pharmaceuticals, says Joseph DiMasi, a study author who is director of economic analysis at the Tufts Center for the Study of Drug Development.

Many drug makers say they routinely evaluate why a formulation didn't work, and genetic information offers another way of sleuthing.

"Does genomic information help us understand the cause of failure and give us any information about whether we can resurrect the project?" says Liam Ratcliffe, head of clinical quantitative and innovative medicine at Pfizer Inc. (NYSE: PFE). "We do this routinely." Ratcliffe says this approach hasn't yet helped salvage any Pfizer products, though, an assessment echoed by some other big pharmaceutical companies.

Some industry experts say it is too time-consuming for big pharmaceutical makers to try to salvage drugs; they say it might be more promising to form a partnership with or sell development rights to smaller biotech or specialty pharma companies. Such alliances have grown sharply in recent years; about $19 billion was spent on securing such partnerships in both 2006 and 2007, compared with less than $10 billion annually from 1999-2005, although the increase can't be attributed solely to targeted treatments, according to the Ernst & Young Global Biotechnology Center.

When the antidepressant vilazodone failed to show a significant benefit in a mid-stage trial its originator, Merck KGaA, decided to take its portfolio in a different direction.

The German company -- which isn't affiliated with New Jersey-based Merck & Co. (NYSE: MRK) -- sold the rights to Genaissance Pharmaceuticals, a company since acquired by Clinical Data Inc. (Nasdaq: CLDA) of Newton, Mass. The drug had shown promise in some patients and had a good safety profile, and Clinical Data wanted to identify the patient population for whom it works best, according to Carol Reed, the company's chief medical officer.

It was a matter of figuring why certain patients responded and others didn't, Dr. Reed says. In September, Clinical Data said it found potential genetic markers that enhance the drug's efficacy in some patients, and last week announced it would begin clinical trials for the second of its two critical late-stage studies. The company is "confident" it will be able to develop the biomarker test to identify the population segment most likely to respond, Chief Executive Drew Fromkin says.

Another drug close to being resurrected is bucindolol, which had been sidelined by other pharmaceutical companies when research on similar cardiovascular medicines appeared to show more promise. Rather than let the drug die, a company research scientist, Michael Bristow, bought the rights and formed a new company to develop it.

Dr. Bristow and his colleague Stephen Liggett have since identified one gene variant that improves patients' response to bucindolol and another that is linked with heightened risk of side effects, according to Dr. Bristow, chief science and medical officer. The company, ARCA Discovery in Denver, will file for Food and Drug Administration approval within the next month or two and hopes to bring the drug to market in the summer of 2009.

Success stories remain rare, however, and coming up with personalized treatments is challenging, genomic scientists say. Researchers not only must identify genetic variations that are related to how a disease works, but figure out how they interact with a medication as well.

Even when genomic knowledge can't save a drug, it can shed light on the reasons for failure and spur a new way of thinking about how a medication works, according to Scott Reines, a vice president in the pharmaceutical research-and-development unit of Johnson & Johnson (NYSE: JNJ). Companies could also develop and market tests that identify patients with a particular genetic variant.

"I think the bigger value isn't in going back and rescuing a particular drug, but you may be able to go back and rescue a particular line of thinking around a particular pathway," says Dr. Rosenkrans of the Personalized Medicine Coalition.

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