Restructuring is all the rage at big pharmas, and now it looks like biotechs want a piece of the trend. Biogen Idec, a global player formed by the 2003 merger of the Swiss-based Biogen, and San Francisco's IDEC Pharmaceuticals has reorganized its R&D and commercial operations into three semi-autonomous business units and made high-profile hires to head those divisions. The company, already strong in neurology and immunology, is aiming to become an oncology powerhouse.

David Parkinson, MD, joined the biotech in March 2006 as senior vice-president of oncology R&D. He will report to Cecil Pickett, a former Schering-Plough bigwig who in September signed on as Biogen Idec's president of R&D. Parkinson, an Amgen alum, is now charged with building a pipeline through internal discovery, in-licensing compounds, acquisitions, and partnerships. And he plans to expand beyond the company's core expertise in large molecules. "There was a history of strength in biologics in the area of lymphoma," he said. At the same time, "the future of cancer therapies is the rational combination of small and large molecules."

The company's recent acquisition of Conforma, for instance, added the first small-molecule product to its portfolio of monoclonal antibodies. The HSP-90-inhibitor targets the "heat shock protein," which exists in both normal and cancerous cells and plays a role in cell proliferation. "The question is how can we best interrupt a protein that is important to the cancer process," Parkinson said, adding that antibodies are inappropriate for interrupting activity that occurs inside a cell. "HSP-inhibitors have caught the attention of cancer therapeutic developers. The preclinical data is certainly promising."

Yet even on the monoclonal-antibody front, Biogen Idec has added three compounds in midstage development: galiximab for non-Hodgkin's lymphoma, lumiliximab for chronic lymphocyctic leukemia, and volociximab for solid tumors, which is being codeveloped with PDL BioPharma. "We have a portfolio that already reflects our strategy," Parkinson said, referring to the combination of internally and externally developed products. "We intend to go forward in the same manner."

Biogen Idec currently counts 94 percent of its revenue from two products: MS drug Avonex (Interferon beta-1a) and cancer drug Rituxan (rituximab), which is comarketed with Genentech, according to its latest 10K filing. The decision to move into three stand-alone business units should help insulate the company from the uncertainties of drug discovery and commercialization as it takes on bigger challenges.

The drug-market roller coaster is something the biotech has experienced firsthand. Biogen Idec is also known for its beleaguered MS drug, Tysabri (natalizumab), which was pulled from shelves in February 2005 only to be restored 16 months later after a regulatory back-and-forth concerning safety.

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An approval process for biogeneric drugs could be formalized as soon as next year--though many issues, ranging from scientific standard to price setting, remain to be settled.

With $10 billion in biotech revenue coming up for grabs over the next five years, the generics industry has already started to make some investments in follow-on biologics, mainly in Europe, where a regulatory process is already in place. If given the green light, these companies will have a ready chest of studies to present to FDA for approval.

In her testimony last month in front of the House Oversight Committee, Janet Woodcock, FDA deputy commissioner and chief medical officer, noted that the agency is already willing to review applications for follow-on proteins on a case-by-case basis.

Generics firm Hospira is a member of the Coalition for a Competitive Pharmaceutical Market, an advocacy group on generic drug policy. The company is currently testing biosimilar erythropoietin in Germany, where it hopes to establish the artificial hormone treatment for anemia before cracking the US market. "We believe this will be a great business opportunity for us," said Thomas Moore, president of global pharmaceuticals at Hospira, the largest producer of generic injectables. "This is a space that meets our corporate mission and provides health-economic benefits."

Rep. Henry Waxman (D-CA) has introduced a biogenerics bill called Access to Life-Saving Medicine Act, cosponsored in the Senate by New York Democrats Hillary Clinton and Charles Schumer--and Jim Li, a former FDA biotech reviewer, believes that Congress may pass an approval process within the next year or two.

Yet regulators still have a long list of concerns--including how manufacturing changes will affect a product's quality, identity, and capacity to trigger immune responses. Because biologics are made from living cells, testing a biogeneric's equivalency to the branded product is more complex--and costly--than the chemical-identity proofs for small-molecule drugs. 

Generics companies will have to conduct studies showing that their compound is not only safe and effective but comparable to--if not interchangeable with--the brand-name biologic. "FDA has the flexibility on a product-by-product basis to see what studies are needed," said Li, currently the associate director of global regulatory affairs at Wyeth. "No matter which side you're on, you can see how one size can't fit all."

Given these hurdles, it remains to be seen how much money consumers will actually save. "While you will see price erosion and price savings, it could be a different situation than small molecules," Moore said. "It's one of those things that's going to be determined by the pathway."

Generics companies might also need to build their first sales force, since follow-on biologics are unlikely to have the same "substitutability" at the pharmacy that small molecules enjoy. In other words, for a patient to receive a biogeneric, a doctor would have to expressly prescribe it. "It's been very difficult to predict that price side of the business," Moore said. "Our expectation is that we're going to have a sales organization that is creating demand."

With legislation pending in Congress, generics makers begin investments in follow-on protein drugs.

Pharmaceutical Executive-04-18-2007

Biogen Idec's Big Ideas

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