1. Development and Approval of Drugs and Devices EPI260 Lecture 2: How to Assess an Early Stage Drug Candidate and Drug Development Lessons April 4, 2012 Richard Chin, M.D.

2. Part I: Assessing Early Stage Candidate Characteristics of a desirable drug candidate and the process of optimizing the molecule The players and the process for finding a partner for a drug candidate Case studies

3. Characteristics of a Good Drug Candidate Unmet medical need Validated target Biology and animal models Chemical characteristics Pharmacokinetics and other preclinical properties Clinical and regulatory path Good IP protection

4. Setting the Bar How do you know when the candidate is good enough (adequate potency, absorption, etc.) Target product profile –Similar to a package insert –Identifies the minimal, expected, and best case characteristics of the drug –Safety, efficacy, dosing, side effects, taste, etc.

5. Unmet Medical Need A disease with –Sufficient number of patients –Severe enough disease –Few treatment options –Few current and future competition Examples –Anti-VEGF antibody –Calcium channel blockers –Anti-Complement antibody

6. Validated Target Validation: positive and negative First in class drug by definition is unvalidated Me-too drugs target the validated target in the same manner as the first in class Second generation drugs target the validated target in a different way –Better affinity –Multiple targets –Better specificity

7. Biology: How can you handicap a drug candidate? Validated in-vitro assays –Binding assays –Cell based assays Validated animal models Validated biomarkers Epidemiological studies Natural human knockouts Unvalidated in vitro assays Unvalidated animal models –Knockouts –Conventional models

8. Chemical Characteristics Lipinski’s rule (hypothesis?) of 5 for oral drugs –Not more than 5 hydrogen bond donors –Not more than 10 hydrogen bond acceptors –A molecular weight under 500 daltons –An octanol-water partition coefficient log P of less than 5 Toxicophores Ease of synthesis Stability Solubility

9. Unintended Consequences? Does Lipinski’s Rule work? Kola and Landis NRDD, Aug 2004.

10. Other preclinical characteristics PK/PD Metabolism Formulation Absorption Effect on myocyte conduction

11. Clinical and Regulatory Path Is a regulatory path defined? Is there a Phase 2 surrogate available? When can the program be de-risked? Are there clear ways to distinguish go from no-go along the way? How many other drugs have succeeded of failed in this indication(s)?

12. Intellectual Property Is there good IP protection? –Exclude other entrants Is there freedom to operate –Molecule –Target –Method of action –Surveillance systems

13. Partnering/Raising Funding Drug development is a high risk, capital intensive business Except for big pharma and big biotech, most drugs will need to be partnered Sources of capital –Angel investors –Venture capital –Public market –Partnering

14. What do they look for? Return on investment –Until the exit Exciting science Great unmet medical need Validation by their peers

15. Drivers for Partnering Explicit reasons –Need for innovative new products –Need to distribute and share risk –Need for capital –Need for expertise in development –Need for expertise in distribution –Tax considerations Secondary reasons –Need to block competition –Desire not to be left behind competition –Need for validation

16. How Partnering is supposed to work Small company or academic inventor comes up with a new candidate Larger pharma licenses technology Drug is developed Revenue is shared

17. How it actually works Technology or target becomes “hot” –e.g., publication in Science and SVP of research notices it Good relationship established between BD personnel between the parties Internal alignment and negotiation at the big pharma Champion at big pharma pushes the deal through

18. Typical Due Diligence Market analysis Examination of data –Chemistry –In vitro assays –Preclinical data including toxicology data –Clinical data –Regulatory documents Consultations –External experts in disease –External experts in technology –External experts in clinical/regulatory

19. Case Study 1 Small startup has excellent small molecules against CCR9 Excellent chemical properties Good results in animal models of Crohn’s disease Good patent position except for one composition of matter patent which is held by another company working in the GI space

20. Case Study 1: Results Multiple parties interested Multiple due diligences, all of which came to halt because of FTO issue Finally signed a deal with one of the top 5 big pharma, who could afford to fight their way through the patent

21. Case Study 2 Company has identified a botanical product with promise against Parkinson’s disease Long history of use in patients with dementia Available as a nutraceutical Good effect in animal studies Good effect in small studies conducted in Russia Difficult to manufacture reliably and consistently Method of use patent

22. Case Study 2: Result Despite years of effort, no partnering Method of use patent weak, especially given availability as nutraceutical Non-GCP data not reliable CMC issues also a major stumbling block

23. Case Study 3 Company has new formulation of gabapentin Delayed release technology allow once a day dosing rather than t.i.d. dosing Gabapentin is a multi-billion dollar product No improvement in efficacy or safety Technology risk substantial

24. Case Study 3: Result Multiple parties interested Large partnering deal signed, with >$25M upfront payment and multi-billion dollar milestone based payments

25. Case Study 4 Company has new technology to rapidly generate antibodies Antibodies are fully human and has excellent binding, half life, and antigenicity Multiple antibodies against promising target has been generated HHMI, National Academy of Science, Nobel laureate founders

26. Case Study 4: Results 1995: multiple investors, multiple partners, IPO, market capitalization of >$5 billion 2005: no investors, company runs out of money and shuts down 2009: multiple investors, though not at the same valuation as 1995

27. Part 2: Lessons from Drug Development How regulations evolve Risks of drug development CAST FIAU University of Pennsylvania Vioxx Tysabri TeGenero

28. Regulations Regulations tend to be reactive –Elixir of Sulfanilamide –Thalidomide –CAST Risk management New tools for FDA Practice of medicine Difference in other countries

29. Risks of Drugs and Drug Development Drugs are poisonous Clinical trials are dangerous by design –Testing limits –Testing new drugs and indications Informed consent and IRBs No direct relationship with patients Social benefits outweigh risks

30. CAST Post-MI patients are at risk for sudden death Ectopy predictive of death Antiarrhythmic drugs reduce ectopy

31. CAST

32. FIAU Fialuridine was a Hep B drug candidate 15 patients exposed –5 died –2 required liver transplantation Study conducted at NIH – NIDDK Investigations by IOM, FDA, NIH Conclusion was that studies were justified, consents were obtained properly, the studies were adequately monitored for the most part

33. University of Pennsylvania Gene Therapy Gene therapy study of ornithine transcarbamylase deficiency, an X-linked genetic disease of the liver Jesse Gelsinger volunteered for the study, and died Multiple failures in conduct of the study –Improper informed consent (key information missing) –Protocol violation in enrollment (Jesse has high ammonia levels) –Other failures Significant financial conflict of interest

34. Tysabri Alpha 4/Beta 7 inhibitor Highly effective for MS Approved on basis of reduction in relapses PML found in several patients Drug pulled from market Now back on with closed distribution channel

35. TeGenero TGN1412 – agonist antibody to CD28 (BAD idea!) 6 patients enrolled rapidly into Phase I All developed DIC and cytokine storm All admitted into ICU, all survived TeGenero out of business New rules for Phase I studies