BioMarket Trends

May 15, 2012 (Vol. 32, No. 10)

Large Molecules Continue to Gain Favor

Small Molecules Are Easier to Make, but Biologics Offer Powerful Playing Field to
Explore
Alex Philippidis
http://www.genengnews.com/gen-articles/large-molecules-continue-to-gain-favor/4106/?page=1

Two studies published in recent weeks along with a pair of Click Image To Enlarge +

studies released over the past two years showcase pharmas

drift toward biologic development and provide evidence of the

promise of large molecule drugs. In the most recent report,

the U.K. law firm Withers & Rogers found that by 2009,

biologics accounted for 60% of the patents filed by the top 10

pharma companies. Abbott had as much as 80% of the patent

filings between 2007 and 2009 focused on biologics.

Biologics vs. Small Molecule Drugs

Withers & Rogers noted that the gap between patent filings

for biologics and small molecules among the top 10 pharma companies had grown in this timeframe. The

number of biologic patent applications in 09 increased by 14.5% from two years earlier, even though 09

saw 31.5% fewer overall patent filings than 07.

This positive trend extends beyond innovation to clinical development and final approval. Studies have

come to the conclusion that biologics hold better prospects than traditional small molecules of advancing

all the way from the lab to the clinic to the market.

Attrition Rates
Withers & Rogers issued its report almost a month after KMR Group, a biopharma industry consultancy,

released findings of its latest Pharmaceutical Benchmarking Forum (PBF). Companies that submitted data

for this analysis were Abbott, AstraZeneca, Bayer, Boehringer Ingelheim, Bristol-Myers Squibb, Eli Lilly,

GlaxoSmithKline, Johnson & Johnson, Merck Research Labs, Novartis, Pfizer, Roche, and Sanofi.

KMR found that more than 25% of large molecules in Phase II between 2006 and 2010 reached the

market compared to about 10% of small molecules. One of the reasons that small molecules have fared

worse is because most of these companies were already very heavily invested in small molecule work. All

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the low-hanging fruit was found in the last 10 to 15 years, explains Scott Martin, a consultant with KMR.

Now, theyre turning toward new technologies, the biotech technologies, and therefore, youre kind of

going in a new area, finding what works.

KMR reports that 12% of biologics were calculated to advance from preclinical to clinical studies,

compared with just 2% of small molecule drugs. The biologics percentage clearing each successive

clinical review hurdle grows to 17% at Phase I, 27% at Phase II, leaping to 58% at Phase III, and 82% at

the registration phase. For small molecule drugs, according to KMR, success was calculated to be 4% at

Phase I, 9% at Phase II, 44% at Phase III, and 78% at registration.

The KMR study did, however, find that industrys large molecule success rates in development phases

have declined in recent years. Martin thus adds a cautionary note: Were finding it harder as an industry

Im talking about the broad R&D industryto get large molecules to approval, even though they do have a

higher success rate all the way up the development pipeline. If you look in three years and you ask, Has

the small and large molecule success rate started to even out or not? if my view is correct, youre going to

see that these large molecule rates are going to come down.

In looking beyond success in clinical studies to eventual approval, the Tufts Center for the Study of Drug

Development found that large molecules outpaced small molecules 32% to 13% between 1993 and 2004.

The study covered the top 50 pharma companies and was published during 2010 in Nature Clinical

Pharmacology & Therapeutics. The discrepancy may, however, reflect the small share (15%) of large

molecule drugs in the sample of 1,738 new drugs (lead indications). For all molecules, large and small, the

approval success rate for the entire study period was 19%.

A few months after the Tufts study was released, a study by the Biotechnology Industry Organization (BIO)

and BioMedTracker looked at the success of 4,275 drugs with a total 7,300 indications from 2003 to 2010.

Overall success was just 9%14.5% for lead indications and 3.2% for secondary indications. Most of the

drugs studied, though, were small molecule drugs, notes David Thomas, BIOs director, industry research

and analysis.

Overall success rate for lead indications varied from 14% for NMEs to 26% for biologics and 41% for non-

NMEs. For secondary indications, success ranged from 3% for NMEs to 7% for biologics to 10% for non-

NMEs.

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Reasons for Differences
Estimated phase transition probabilities and eventual approval success rates differed significantly by

therapeutic class in Tufts study. For self-originated drugs, systemic anti-infective drugs enjoyed the

greatest approval rate (23.9%), followed by musculoskeletal (20.4%), antineoplastic/immunologic (19.4%),

respiratory (9.9%), GI/metabolism (9.4%), cardiovascular (8.7%), and CNS drugs lowest (8.2%).

The distribution of disease categories does differ between large and small molecules. In particular, large

molecule development is more concentrated in oncology and immunology, while small molecule

development is more concentrated on cardiovascular and CNS conditions, says Joseph A. DiMasi, Ph.D.,

director of economic analysis for Tufts CSDD. However, differences in therapeutic class focus do not

appear to explain the differences in success rates.

What reasons, known or suspected, can explain that difference? This is a difficult question to answer

definitively, but it may be that large molecule development, in general, is more targeted, and, given their

therapeutic focus and functions (e.g., immunologics and replacement therapies), safety issues may be

less prevalent, Dr. DiMasi speculates.

BIOs Thomas also points out an interesting result of the BIO/BioMedTracker study: Oncology drugs had

the lowest success rate at 5.6%, meaning just one in 20 cancer drugs advanced from Phase I all the way

to approval. That rate combines the 11% success rate of lead cancer indications and 2% success rate of

secondary indications.

Thomas shared a possible reason for the success-rate differences between diseases: With infectious

disease, its easy to take a blood sample and quickly generate a readout that tells whether or not your drug

is working. In oncology and cardiology, developing a drug is more difficult given the outcome studies

required, with multiple efficacy endpoints, not to mention the complexity of the diseases; a cancer drug

may work against several different enzymes, versus infectious disease, where a simpler drug targeting a

single virus may suffice.

Thinking Large
As more biologic drug candidates are discovered and undergo R&D and review, it will be interesting to see

how much the gap with small molecule drugs in terms of attrition rates changes. While some narrowing

can be expected, the studies to date have all found more biologics advancing through reviews than NMEs.

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No wonder then that big pharma is increasingly thinking large, as in molecule, as it scrambles to squeeze

more success from the billions it is spending on R&D. Withers & Rogers study in particular bolsters the

paradigm that big pharma is shifting its development focus from small molecule chemicals to large

molecule biologics in recent years.

Among the top 10 pharma firms it surveyed, Novartis had the most patent applications relating to biological

drugs published in 2009, with 260more than twice as many patents for biological drugs compared to

small moleculesfollowed by Johnson & Johnson and Merck & Co. AstraZeneca ranked lowest with just

15 biologicals patents, or 22% of its total. AstraZeneca and Pfizer had less than half of its patents sought

for biological in 2009.

There are, of course, far more small molecule drugs on the market. It is considerably easier to develop

and manufacture small molecule drugs. They come with lower R&D costs and there is an established

market infrastructure for them. Therefore, the shift to biologics could result in fewer new products making it

to market, Nicholas Jones, Ph.D., partner at Withers & Rogers, explains.

Future studies should examine more closely the type of biologics most apt to achieve regulatory

approvala topic touched on by the Tufts study. KMRs Martin says that the firm plans to issue another

PBF analysis next winter. Research will have to dig deeper to spell out just which type of biologic works

best on what disease.

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