1. The spatial innovation biography of a successful monoclonal antibody Christian Zeller April 17, 2007 CIRUS Workshop on Innovation, Institutions, and Path Dependency, Forum Chriesbach, Eawag, Dübendorf

2. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody 1.Theoretical bases and questions 2.The pharma-biotech-complex 3.Antibodies: slow breakthrough of a new technology 4.The spatial innovation biography of the drug 5.Conclusions Presentation

3. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody ResearchDevelopmentProductionSales Until mid- 1970s Transnational pharmaceuticals Universi- ties 1. Theoretical bases National pharmaceuticals Pharma- cies, clinics 1980s and 90s Possible tendency Transnational pharmaceuticals Contract Research Org. Contract manufacturing Universities Biotech companies Specialized pharmaceuticals Pharma- cies, clinics Transnational pharmaceuticals Biotech companies Contract Research Org. Universities Specialized pharmaceuticals Pharma- cies, clinics HMOs Contract manufacturing Industrial organization in the pharmaceutical and biotech industries

4. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody How influence the changes of industrial organization innovation systems as well as research, development and commercialization of new technologies and therapeutic active substances? Question 1. Theoretical bases

5. Design space Actors and organizations Institutional rules Market conditions, industrial organization Mode of regulation Accumulation regime Macro-societal and economic context Technology generation and evolution technological system Industrial organization in a sector, markets sectoral innovation system 1. Theoretical bases Theoretical framework

6. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody Sectoral, national and regional innovatio systems technological systems Knowledge base Inputs Demand Individuduals Regulation Institutions, rules, coordination, cultural context Organizations Companies Regional innovation system National innovation system Sectoral innovation system Learning process through interaction Technological system Financial system Technologies 1. Theoretical bases

7. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody How are organized and structured the flows of resources, knowledge and values in a technological system? (power relations) More precise questions How institutional changes, particularly at intellectual property rights, influence the organization and dynamics of innovation systems? 1. Theoretical bases

8. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody 1.Theoretical bases and questions 2.The pharma-biotech-complex 3.Antibodies: slow breakthrough of a new technology 4.The spatial innovation biography of the drug 5.Conclusions

9. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody Research Triangle Park a A a a a b B b b b b b C c c c Bay Area San Diego Boston New Jersey Maryland Oxford / Cambridge München Paris Rheinland Basel Rhein / Main / Neckar Arenas of innvation and north-atlantic innovation relations A a Big pharma: headquarters and most important Centers of Excellence Big pharma: Centers of Excellence Biotech companies Financial institutions Research institutes Innovation arenas and hubs Innovation relations structured by oligopolistic rivals Quelle: Zeller, Christian (2004): North Atlantic innovative relations of Swiss pharmaceuticals and the importance of regional biotech arenas, Economic Geography 80 (1): S. 83-111 Quebec / Montreal a Lund/Kopenhagen 2. The Pharma-Biotech-Complex

10. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody As a pharma guy who makes therapies I compbine the keys and I play the music (Interview, March 6, 2001). Paul Herrling, Global Head of Research of Novartis Pharmaceuticals, compared himself with a piano player. Each biotech firm represents a key and large pharmaceutical company puts the piano together. 2. The Pharma-Biotech-Complex

11. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody 1.Theoretical bases and questions 2.The pharma-biotech-complex 3.Antibodies: a slow breakthrough of a new technology 4.The spatial innovation biography of the drug 5.Conclusions

12. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody Three key technologies in the 1970s Technological paths Markets Products 3. Antibodies: a slow breakthrough of a new technology Recombinant DNA technologies (Arber 1970; Nobel prize in medicine 1978), Boyer/Cohen 1973; Berg Nobel prize in chemistry 1980 Monoclonal Antibodies (Jerne, Milstein/Köhler 1975; Nobel prize in medcine 1984) Polymerase Chain Reaction (PCR) (Mullis 1983; Nobel prize in Chemistry 1993) Multiplication of biotechnologies

13. 1975: Monoclonal antibodies from hybridoma cells Quelle: Der kleine LaRoche (2003: 15) Georges Kohler and Cesar Milstein (1975) in Nature: Monoclonal antibodies are artificially produced against a specific antigen. Production of monoclonal antibodies with hybridoma technique. With this technique a group of lymphocytes producing all the same antibody protein is obtained. revolutionizing diagnostic medicine. Medicaments against cancer and infections. Antigen Melanoma cells B-cells from spleen Fusion Sang Selection of hybridoma cells with antibody activity, culture of selected cell lines (clones) from positive cell cultures Hybridoma cells monoclonal antibodies 3. Antibodies: a slow breakthrough of a new technology

14. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody Milstein und Köhler did not try to patent their invention! Basic technology was freely accessible for subsequent scientists. Revolution in immunology laboratories. Foundation of numerous young companies and institutes which wanted to transfer monoclonal antibodies into efficient therapies. At the beginning no patents! Then multiplication of intellectual property monopolies! Soon, each aspect of their production was enclosed by patents. Subsequent users are forced to pay royalties (cf. Zeller 2007). Currently, about 100 recombinant biotech drugs are on the market, 21 of them are monoclonal antibodies. Institutional change 3. Antibodies: a slow breakthrough of a new technology

15. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody Monoclonal antibodies approved by the FDA 1. Appr.ProductCompaniesIndicationRoyalties to 6/86Orthoclone OKT3Ortho Biotech (J&J)Verhinderung aktuter Abstoßung bei Nierentransplantation ----- 12/94ReoProCentocor (J&J); LillyVorbeugung gegen Verengung der Blutgefäße Celltech 11/97RituxanIDEC Pharmaceuticals (Biogen Idec); Genentech; Roche CD20-positives B-cell Non- Hodgkin's Lymphom Celltech 12/97ZenapaxProtein Design Labs, RocheVorbeugung aktuter Abstoßung bei Nierentransplantation Celltech 5/98SimulectNovartisVorbeugung akuter Abstoßung bei Nierentransplantation Celltech 6/98SynagisMedImmune; Abbott LaboratoriesVorbeugung ernster Erkrankun- gen der unteren Atemwege Protein Design Labs, Celltech, Genentech Centocor 8/98RemicadeCentocor (J&J); Schering-PloughHemmt Entzündungen, vermeidet Gelenkzerstörung Genentech, Celltech 9/98HerceptinGenentech; RocheMetastatisierender BrustkrebsProtein Design Labs, Celltech 5/00MylotargWyeth; Celltech Groupakute myeloische LeukämieProtein Design Labs 5/01CampathGenzyme (Ilex Onco-logy); Berlex Laboratories (Schering) Chronisch, lympathische Leukämie Cambridge University; BTG First product: 11 years after invention of basic technique. 3. Antibodies: a slow breakthrough of a new technology

16. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody 1. Appr.ProductCompaniesIndicationRoyalties to 2/02ZevalinIDEC Pharmaceuticals (Biogen Idec); Schering B-cell Non-Hodgkin's LymphomGSK (Corixa) 12/02HumiraCambridge Antibody Technology; Abbott Laboratories (Knoll/BASF) Moderate bis ernsthafte rheumatoide Arthritis CAT; MRC, Scripps und Stratagene (über CAT); Genentech 6/03BexxarCorixa (Coulter Pharmaceutical); GlaxoSmithKline CD20-positive non-Hodgkin's lymphoma University of Michigan 6/03XolairGenentech; Tanox; Novartisbis schwerem Asthma Bronchiale Protein Design Labs 10/03RaptivaGenentech; Xoma; Seronomittelschwerer bis schwerer Plaque-Psoriasis Protein Design Labs 2/04AvastinGenentechDarmkrebsProtein Design Labs 2/04ErbituxImClone Systems; Bristol-Myers Squibb DickdarmkrebsGenentech 11/04TysabriBiogen Idec; ElanMultiple SkleroseProtein Design Labs 06/06LucentisGenentechaltersbedingte Makuladegeneration Protein Design Labs, Xoma 09/06VectibixAbgenix (Amgen)fortgeschrittenem Darmkrebs nach erfolgloser Chemotherapie 03/07SolirisAlexion Pharmaceuticalsparoxysmal nocturnal hemoglobinuria Protein Design Labs filed patent infringement Intellectual property monopolies on each aspect of production 3. Antibodies: a slow breakthrough of a new technology

17. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody 3. Antibodies: a slow breakthrough of a new technology 2006 Panitumumab (Vectibix) 1975 1984 1986 1990 1994 Technologies to reduce immunogenicity of monoclonal antibodies: TIS: technological evolution towards humanization, human antibodies innovation biography of drugs

18. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody 1.Theoretical bases and questions 2.The pharma-biotech-complex 3.Antibodies: slow breakthrough of a new technology 4.The spatial innovation biography of the drug 5.Conclusions

19. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody Quelle: Informationsdienst Biotechnologie (http://www.i-s-b.org/business/rec_sales.htm) 4. The spatial innovation biography of the drug Sales of Rituxan / MabThera: « a blockbuster » The most successful biotech drug!

20. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody Rituxan / MabThera (Rituximab) Xoma Berkeley AntiCD20 patent Milstein/Köhler, Cambridge, Basel Hybridoma, Antibodies 1975 Lee Nadler, Dana Farber, Boston Antigen CD20 1980 Ronald Levy, Stanford Univ., Palo Alto IDEC, San Diego 1991 G./.F. Stevenson, Univ. Southampton B-cell lymphoma 1976 Glaxo-Wellcome (Coulter – SmithKline Beecham 1998 Verkaufskooperation Bexxar Glaxo-Wellcome Patentstreit Columbia Univ.) Patentstreit IDEC Mitchell Reff et.al Engineering of Rituximab Preclinical (safety, toxicology) IDEC/ Genentech Roche Chugai Zenyaku Kogyo Genentech, Vacaville Lonza Biologics, Portsmouth, NH IDEC, San Diego Oceanside IDEC Nabil Hanna, A. Grillo-López Phase I/II1993-4 Phase II 1994-95 Phase III 1995-96 Phase II 1995-98 Idec, Oceanside Up-scaling Genentech U.S. South San Franciso Zenyaku Kogyo Japan Collaboration with NCI: Extension to further therapeutic potentials Roche EU Basel Celltech, GB patent (manuf. Antibodies) Pharma. Partners Royalty Pharma Schaffhausen Patent Patent sold 1997 Lizenzgebühren für Patent Lizenz Knowledge flows Basic research 1970s Applied research / discovery 1980s Preclinical R&D 1991-93 Clinical devel., clinical trials 1993-1997 1997-? Manufacturing 1993/1997- Sales 1997- 4. The spatial innovation biography of the drug

21. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody « I tried to convince many, many, many pharmaceutical firms between 82 and 84 that pan B-cell antibodies would run. … And they all told me the same thing. If the drug couldnt make 300 million dollars, they werent interested. So they rejected antibodies. And to be honest, in those early days, it was impossible, impossible to get any of the large pharmaceutical companies interested in antibodies. » (Interview, October 20, 2006) Lee Nadler, Professor, Senior vice president of Experimental Medicine, Dana Farber Cancer Institute, Boston: 4. The spatial innovation biography of the drug

22. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody Synthesizing explicit and tacit knowledge: Decisive phases of innovation trajectory happen in close social and spatial proximity Biotech companies transform basic knowledge of universities in marketable knowledge. Pharmaceutical companies appropriate knowledge and technologies and are responsible for commercialization. Intellectual property rights can take independent properties and be a pure financial asset What does us say this example? Role and financing of universities Hierarchies of innovation and production networks Aspect of increased influence of placement (financial) capital 4. The spatial innovation biography of the drug Knowledge and proximity

23. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody 1.Theoretical bases and questions 2.The pharma-biotech-complex 3.Antibodies: slow breakthrough of a new technology 4.The spatial innovation biography of the drug 5.Conclusions

24. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody Institutional forms such as the regime of intellectual property rights, shape the innovation networks. Hunting for intellectual property monopolies leads to a complex landscape of property rights and cascades of royalties. Strategies for extracting rents Innovation systems 5. Conclusions Innovation systems consist of power hierarchies. TNC are on the top of these cascades of power, financial flows and governance of innovation systems.

25. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody 5. Conclusions Innovation deficit Problem of contradicting cycles Which demand and which needs? Democracy Societal challenges Technological systems and power relations in a changed configuration of capitalism! Consider financing and institutional changes! Challenges for innovation research

26. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody

27. Xolair (Omalizumab) Milstein/Köhler, Cambridge, Basel Hybridoma, Antibodies John Hopkins University Baltimore Texas University Houston Tse Wen Chang Tanox Tse Wen Chang Houston Engineering of Anti-IgE 1989 Tanox Houston TNX-901 Genentech USA Novartis except USA Genentech, Vacaville Novartis Huningue Genentech South San Franciso Phase I/II1994 Phase II 1994-98 Phase III 1999-2003 Up-scaling Ciba / Novartis Basel Phase II 1996 Phase III 1999-2003 Up-scaling Tanox Houston TNX-901 Phase I Phase II Patent- streit 1993-2003 Genentech verhindert Entwicklung von TNX-901 gegen Erdnussallergie Genentech Houston Engineering of Anti-IgE 1989 Tanox Houston Royalities PDL Fremont Royalities Patentstreit 199?-2003 Grundlagen- forschung 1970s Angewandte Forschung / Wirkstoff- findung 1980s Präklinische F&E 1991-93 Klinische Entw. 1994-2004 Produktion 2003- Verkauf 2003- Entdeckung IgE 1968

28. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody Tamiflu (Oseltamivir) und Relenza (Zanamivir) Gilead Sciences Nobert Bischoffberger Foster City GS 4071 Gilead Sciences Foster City GS 4071 GS4104 Gilead Sciences Roche Boulder Basel Tamilfu DSM Grenzach Intermediate Product (Shikimiacid) Roche Welwyn GS4104 Roche Lizenzgebühren Monash University Parkville, Aus 1983 mechanism of virus Biota Australia GG167 Glaxo GG167 GlaxoSmithkline Relenza GlaxoSmithKline Relenza GlaxoWellcome GG167 Biota Einlizenzierung Sep. 1996 CIpla India Indonesia Vietnam Patent Streitigkeiten? Kooperation Öffentlich zugängliches Wissen ? China Natural Shikimiacid from Sternanis plant Grundlagen- forschung 1980s Angewandte Forschung / Wirkstoff- findung 1990s-1995 Präklinische F&E 1994-96 Klinische Entw. 1996-99 Produktion 1999- Verkauf 1999- Lizenzgebühren

29. Monoclonal antibodies with hybridoma cells Köhler & Milstein Cambridge 1975 drug target: malignant B-cell displays marker protein G & F. Stevenson Southampton 1975? Discovery of CD20, creation of an Anti- CD20 monoclonal antiibody Lee Nadler, Boston 1980 Chimerization of murine antibodies Morrison, et. Al. New York, Palo Alto, Mountain View 1984 Expression vector Kline & French Lab., Philadelphia Rituximab Chimerization of murine anti-CD20 Mitchell Reff San Diego Polymerase Chain Reaction (tool) Mullis et al. Emeryville 1984 Combined basic and applied technologies in the innovation path of rituximab Anti-Idiotype monoclonal antibodies Ron Levy, Palo Alto 1981/82 CHO cell line Larry Chasin New York Technology to make recombinant DNA Berg, Boyer, Cohen 1972 tool Manufacturing method based on CHO cell line expression vector Mitchell Reff San Diego 4. The spatial innovation biography of the drug

30. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody Wirkstoff- findung Präklinische Entwicklung Phase I Sicherheit gesunde Freiwillige Phase II Wirkung bei Patienten Phase III Vergleichstudien mit Standard- therap. Zulassungs prüfung Phase IV Marketing Entwicklung evtl. neue Indikationen Klinische Studien > 4 Jahre1.5 Jahre6 Jahre Zentrale Arbeitsschritte in der F&E von Therapeutika Geographie des Medikaments

31. Christian Zeller: The spatial innovation biography of a successful monoclonal antibody Concentrated financial capital increasingly influences innovation systems Pension funds, investment funds, venture capital funds Liquid stock markets, Shareholder value-driven Corporate Governance Competitive regime shaped by TNCs Power of concentrated placement capital New organizational forms and extension of financial markets Intellectual property rights Changed role of publicly funded research Institutional changes 1. Theoretical bases