Breakthrough Business Models: Drug Development for Rare and Neglected Diseases and Individualized Therapies: Workshop Summary (2009)

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8 Summary The main objectives of the workshop were to understand how transla- tional research is changing; to explore different models for funding trans- lational research and technologies; and to discuss current policies and regulations and consider whether they are adequate, or if revisions are needed in light of new funding models. In the final session of the workshop, Dr. Bond summarized the highlights of the day and outlined four areas in which further discussion is needed. Scientific and Regulatory Elements of the Translational Research process The last several years have seen a remarkable culture change that has created a new environment in which translational research is highly valued. Still, barriers to progress persist. Tom Caskey reviewed financial barriers to orphan drug development during discovery, utility or proof of concept, and clinical development, and discussed drivers of investment (see Chapter 2). He proposed solutions to help speed the development of new drugs: more defined focus of government research, adequate funding of the Food and Drug Administration (FDA), possible revision of the Small Business Inno- vation Research and Small Business Technology Transfer regulations, new incentives for high-risk investors, early engagement of experienced inves- tors, and building of a stronger U.S. industry through partnerships with This chapter is based on the closing remarks of Enriqueta C. Bond, Ph.D., President, B ­ urroughs Wellcome Fund. 98 

SUMMARY 99 academia. He also stressed the need for better target validation and safety at all levels. Tim Coté reviewed the history of the orphan drug law and its current status. He also presented ten strategies for moving orphan drug development forward more rapidly and efficiently (see Chapter 3). Diverse Funding Organizations Four models for drug development were described: a not-for-profit pharmaceutical company, a foundation that operates a virtual company linking investors with biopharmaceutical companies, a for-profit company with a vested interest in rare diseases, and a global private-equity fund dedicated to advancing drug discovery (see Chapter 4). The Institute for OneWorld Health, the not-for-profit pharmaceutical company, eliminated the profit requirement from its business plan. Seed money was provided by the Gates Foundation. Acknowledging that a single funding source is not a sustainable model, the Institute is now seeking addi- tional funders, with the ultimate goal of being able to support itself partially or fully with revenues from marketed products. Cystic Fibrosis Foundation Therapeutics (CFFT) has shown how a disease-oriented foundation can become a virtual drug company. CFFT establishes business partnerships with pharmaceutical companies, lowering their risk in the development of drugs for rare disorders by providing finan- cial support, access to leading cystic fibrosis experts and research tools, and access to the Cystic Fibrosis Therapeutic Development Network of Cystic Fibrosis Care Centers for facilitation of clinical trials. Genzyme approaches the development of drugs for rare diseases as a for-profit venture. There are several keys to the sustainability of this model: the therapy must be effective and must address an unmet medical need, pre- sumably one involving a condition that is life-threatening or causes severe morbidity; there must be a global market; and the price must be sustainable. Partnerships can allow for the development of a product that would not be possible for a single company, and less profitable drugs can be developed if they are part of a larger portfolio. Celtic Therapeutics is a global private equity firm that functions as a virtual pharmaceutical company, acquiring or investing in novel therapeutic candidates to bridge the gap between discovery and preclinical development and late-phase clinical trials/approval. As well-financed pharmaceutical company pipelines dwindle, underfinanced biotechnology companies have drug candidates but lack the resources to develop them. This new venture management group plans to fill a portion of its portfolio with promising drug candidates for rare or neglected diseases that are in Phase II, develop the products to the point at which a large pharmaceutical partner would be interested, and sell them at auction to pharmaceutical companies. An 

100 BREAKTHROUGH BUSINESS MODELS expert reaction panel provided further examples of funding models. The venture capital community is ready and willing to invest in new therapies, but needs rare disease foundations to help lower the risks involved by assisting the venture organizations in fully understanding the opportunities, including the probability of technical success for a particular therapeutic candidate, the likelihood of finding patients for trials, and the scientific talent required. As genomic information allows for better targeting of therapies, per- sonalized medicine will create numerous opportunities for the development of new orphan drugs by leading to the identification of diseases that affect fewer than 200,000 people in the United States. Being able to develop such drugs may require the broad adoption of some of the models discussed in the workshop. Sharing OF materials and DATA Michael Mowatt said the barriers to sharing resources fall into two main categories: finding (i.e., determining where to look and whom to contact for materials or data), and bargaining (i.e., negotiating the terms and conditions of the transfer of those resources). He discussed a variety of mechanisms for reducing barriers to sharing, such as standardized material transfer agreements (MTAs) or letters of agreement, and repositories that provide easy access to materials or data (see Chapter 5). To facilitate sharing, the National Institute on Aging established the Alzheimer’s Disease Neuroimaging Initiative—a public–private partner- ship that is conducting a large observational study following 822 subjects, including patients with Alzheimer’s disease, those with cognitive impair- ment placing them at risk for the disease, and elderly controls. All data, including images, biological samples, and clinical data, will be available in a public global database. The Genetic Alliance BioBank is an advocacy-owned repository for clinical data and biological samples, designed so as to create a firewall between researchers and many of the burdensome administrative and regu- latory tasks associated with working with patients. The BioBank provides infrastructure for disease-specific organizations that manage their own collections of materials and data and facilitates their distribution. Sharon Terry of the Alliance said that patients with rare diseases need therapies and are therefore willing to accept a higher degree of risk. They are eager to engage in discussions aimed at making drug development more of a social-­entrepreneurial venture, contributing, for example, by increasing participation in clinical trials. 

SUMMARY 101 Intellectual Property Strategies With regard to intellectual property strategies, Anthony So noted the gap between drug company priorities and public health needs. He provided a number of examples of innovative ways in which intellectual property has been used to advance drug development for rare diseases, such as pooling intellectual property, depositing it in a trust, allowing open access to data, using socially responsible licensing terms, standardizing MTAs, and instituting new benefit-sharing arrangements. So encouraged collective action by the public and private sectors to pool intellectual property, and suggested the creation of a technology trust as a strategy for creating an enabling intellectual property environment for rare and neglected diseases (see Chapter 6). The recurring theme of the three presentations in this area—from industry, from a patient-led disease-specific foundation, and from a univer- sity technology-transfer office—was the need to create new alliances and partnerships. Vertex Pharmaceuticals stressed alliances as the way forward and offered a list of lessons learned for alliance partners. The Myelin Repair Foundation, which has structured itself like a start-up business, showed how it was able to build networks, establish patient repositories, and share intellectual property to accelerate drug development. The message from the University of California at Berkeley was that university technology-­transfer offices need to take a new approach to facilitate sharing and research. The university employs a relationship-based model that shifts the focus from maximizing licensing revenue to maximizing the societal impact of research, and assesses both financial income and public good in quantify- ing success. approaches to Facilitating Clinical Trials Anne Pariser offered an overview of the regulatory process, noting that FDA is eager to facilitate the development of orphan drugs. While orphan drug regulations provide financial incentives for drug sponsors, they do not make it easier to navigate the regulatory process. Pariser offered nine recommendations to sponsors of orphan drug applications and described opportunities for facilitating development, including fast-track designation, accelerated approval, priority review, and early and frequent communica- tion with FDA (see Chapter 7). To help researchers overcome regulatory barriers, the Multiple Myeloma Research Foundation established the Multiple Myeloma Research Consor- tium (MMRC), a group of 15 leading academic centers focused on high- quality trials of myeloma products and correlative studies. MMRC also created repositories for tissue samples and data. A scorecard approach is 

102 BREAKTHROUGH BUSINESS MODELS used to track the number and quality of tissue samples each center provides to the tissue bank, its speed in initiating and accruing patients for clinical trials, and the overall engagement of principal investigators. Centers are rewarded accordingly with funding for all or part of the cost of a full-time equivalent clinical coordinator. The Muscular Dystrophy Association, an umbrella organization addressing 40 rare neuromuscular diseases, has focused on establishing partnerships with other private-sector groups and developing patient regis- tries, research clearinghouses, and international resources and standards. It also convenes collaborating groups in face-to-face meetings. Bond challenged the participants to consider whether each individual disease-oriented group needs to develop approaches to facilitate regulatory processes, or this is something universities could be doing, building that capacity at an institutional level. Currently, disease-oriented groups must replicate these approaches for the diseases on which they focus. Areas for further discussion In concluding, Bond highlighted four potential areas for further discussion: • Business models—A variety of models for drug development were discussed during the workshop. While this discussion was interest- ing and informative, and these models have been successful in their own venues, Bond suggested that it is too soon to distill broadly applicable lessons and best practices from these approaches and that new models will continue to emerge. She recommended that the Forum on Drug Discovery, Development, and Translation revisit the topic of business models for the development of drugs to treat rare and neglected diseases on a recurring basis, perhaps every couple of years. • Data sharing and public access—Several interesting new models for sharing resources were presented during the workshop. Models such as the Public Library of Science, public access to information derived from National Institutes of Health–funded research, and requirements that centers involved in the Human Genome Project deposit sequence data into GenBank in a timely fashion are evi- dence that a new, favorable climate for the sharing of resources is emerging. Bond suggested that it would be valuable to conduct a study to explore the terrain of resource sharing and distill best practices. • Intellectual property—A variety of models for the management of intellectual property were discussed during the workshop, but 

SUMMARY 103 many intellectual property issues related to drugs for rare and neglected diseases remain. Bond concluded that a full workshop or study on this topic alone would be valuable. • Designated orphan drugs—As noted by Coté (see Chapter 3), there have been over 1,850 orphan designations and 326 orphan drug approvals, leaving 1,525 orphan drugs in development or aban- doned for various scientific or business reasons. Some of these compounds may still hold promise, and an assessment of their current disposition is needed. Bond suggested as a further area for discussion policies applied to the review of orphan drugs and what new or revised policies might facilitate the approval of such drugs.