Special Report: Platform Drugs—Opportunities in the Market... - Pharmaceutical Executive

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Special Report: Platform Drugs—Opportunities in the Market...


Pharmaceutical Executive


Resuscitate Generic Drugs

Beta blockers are a time tested treatment that, over the years, has mostly been used in the management of hypertension. It's a crowded class, with multiple therapies and many generics available. In 1996, GlaxoSmithKline differentiated its beta-1 blocker Coreg—a four-times daily treatment—by conducting clinical trials and obtaining a label that showed the drug's effectiveness in treating congestive heart failure (CHF).

But AstraZeneca also saw an opportunity—and mobilized to benefit from GSK's differentiated beta blocker. It picked a generic beta-1 blocker, metoprolol, and reformulated it into a longer-acting, twice-daily dosing. The company brought this reformulation to market, and called it Toprol XL. The company incurred substantially lower risk when developing the drug, since the generic was known to be safe and the company presumed the efficacy was similar to other drugs in the class. This lower risk approach produced $1.6 billion in US sales by 2006—all from a reformulation of a drug that had previously been generic.

Develop a Differentiated Story

AstraZeneca's Nexium (esomeprazole)—the second highest selling drug in the United States—provides a blueprint for developing next-generation products by demonstrating the perception of differentiated efficacy in a crowded market.

Nexium is a single isomer version of its predecessor Prilosec. Compared to Prilosec, Nexium has decreased hepatic metabolism and slower plasma clearance, thus resulting in improved plasma concentration and better acid suppression. However, improved kinetics alone would have led to a "me-too" PPI in the absence of new data.

To combat this, AstraZeneca differentiated Nexium in the crowded proton pump inhibitor (PPI) class by performing clinical trials showing a faster response benefit in GERD in addition to healing of esophageal ulcers. AstraZeneca also performed trials showing that Nexium helps reduce the risk of NSAID-associated gastric ulcers. The combination of a similar but new molecular entity and a number of carefully designed clinical trials allowed AstraZeneca to distinguish Nexium from other PPIs. That, combined with a wise decision to price the compound lower than Prilosec, allowed Nexium to capture $5.2 billion in 2007, despite generic competition.

Forest Laboratories has used a similar approach in differentiating the single isomer Lexapro as a follow-up to its blockbuster Celexa to retain value. Domestic sales of Lexapro reached $1.9 billion in 2005 (nearly 30 percent of all SSRI sales), compared to $1.1 billion in peak sales from Celexa in 2001. That's a critical revenue stream that would have been left for dead by pharmaceutical companies as recently as 15 years ago.

Organizing for Success

The clock is ticking on many companies' blockbuster patents—and there's no time to waste in exploring the potential to convert products into platforms for new revenues. However, to reap the rewards of new revenues, pharmaceutical companies must be mindful of several strategic issues.

First, drug developers have to understand the intellectual property land mines, and act accordingly to protect their investments for as long as possible. In the absence of such an approach, traditional reformulations that use the same active moiety extend exclusivity for no more than three years—a short time frame to replace important revenue.

Second, strategic innovation requires that companies organize for success. Firms need world-class cooperation between R&D and commercial teams to identify novel opportunities and determine how best to differentiate them through clinical development. A cross-functional team comprised of R&D and brand and marketing teams must work hand-in-hand throughout the life cycle of current assets, and must also be able to identify new opportunities beyond the company's current areas of focus. The R&D team's knowledge must be activated by access to a suite of related compounds with known efficacy and safety data. The commercial team's responsibility should be to identify lucrative markets and create effective communications that can be used to strategically position promising new drugs for novel yet related indications. Furthermore, the two teams must be able to effectively share information and make joint decisions about the best direction for a particular franchise. A similar approach can also be undertaken to identify areas not currently targeted by the development company.

Certainly, these organizational issues can represent a formidable obstacle—particularly when viewed against the backdrop of other challenges in the healthcare industry. But companies that work not just harder, but smarter, will their way out of the quagmire of unproductive development by paving a new path toward innovation.

Douglas Martin, MD, is Managing Director of Leerink Swann. He can be reached at


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