Biotech Values

[DewDiligence]

Big Pharma Is Spending Less on Neuroscience

[This article is nominally about the European market, but it applies with equal force to the pharma industry in general.]

http://online.wsj.com/article/SB10001424052748704474804576222463927753954.html

›MARCH 27, 2011, 4:32 P.M. ET
By Sten Stovall

As drug companies shake up their research and development operations, the industry risks narrowing its focus to the most profitable areas, raising the prospect that some fields of medicine may be neglected, experts say.

Chief among these is neuroscience—research into disorders of the brain. Many companies, including U.K.-based AstraZeneca and GlaxoSmithKline PLC, French drug maker Sanofi-Aventis SA and U.S.-based Merck & Co., have recently scaled back their research into how the brain works and affects behavior.

While research into heart disease, cancer, diabetes, autoimmune and infectious diseases looks set to retain a high priority for Big Pharma, the fall in neuroscience research poses a serious threat to the development of new medicines for conditions such as schizophrenia, stroke, bipolar disorder, depression, anxiety and autism, specialists say.

Brain disorders represent 35% of the total disease burden in Europe, according to a report published in the European Neurological Review. But neuroscience is one of the least understood areas of biology, reflecting the fact that the brain is the most complicated organ in the body.

Drug companies have always had difficulty making money from neuroscience, "because researching the brain is a riskier enterprise, with lower successful hit rates and higher risks of failure than some other therapeutic areas," says David Nutt, professor of neuropsychopharmacology at Imperial College London and president-designate of the British Neuroscience Association.

Dr. Mary Baker, president of the European Federation of Neurological Associations, says the fall in European neuroscience investment has been dramatic. "One key reason is that there are few proven biomarkers in CNS [central nervous system] diseases, so it means expensive research for potentially little gain," she says. Biomarkers are biological measurements which can be used to assess progress in tackling disease.

But while companies are cutting back on R&D, the costs to society from mental disorders are enormous. According to information from the European College of Neuropsychopharmacology, mental disorders rank number one in the European Union in terms of direct and indirect health costs. In 2007, the most recent year for which figures are available, the total cost was estimated at €295 billion ($415 billion). Indirect costs, such as lost productivity, account for most of that figure.

Research by the Tufts Center for the Study of Drug Development in Boston, Mass., shows CNS drugs cost more and take longer to bring to market than other types of drugs. And only around 8% of CNS drugs that make it to clinical trials end up being approved, about half the average success rate for all new drugs [but this is still much better than the success rate in cancer—see #msg-59909806].

"Investors are demanding that drug companies now justify the billions of dollars they spend on research and development," according to Hakan Bjorklund, chief executive of privately held Nycomed of Switzerland. "It all has to do with R&D productivity," he told The Wall Street Journal.

Dr. Baker says the investment trend in neuroscience "is very worrying, given that populations in the developed world are living considerably longer, and aging means they develop more brain disease."

Dr. Susanne Sorensen, head of research at Britain's Alzheimer's Society, says the trend has an immediate impact on people suffering from neurological disorders.

"If Big Pharma withdraws from the basic science in this area, it also becomes less likely that they have the early clinical investigations, not to mention the larger clinical trials, which means British patients are excluded from taking part in these—and we know that patients who take part in clinical trials do better," she says.

"Neuroscience has largely been a burial ground for drug development," says Nigel Gaymond, chief executive of the U.K.'s BioIndustry Association, a lobby group for British biotechnology companies.

GlaxoSmithKline, the U.K.'s biggest drug maker by sales and market capitalization, has reduced its discovery research in psychiatry and pain to focus on neurodegenerative and neuroinflammatory diseases such as dementia, multiple sclerosis and Parkinson's.

Explaining Glaxo's decision, Patrick Vallance, its chief of medicine R&D, told The Wall Street Journal that neuroscience research "is currently one of those of highest risk for the industry—the identification of targets, the animal models, the nature of experimental medicine and the development programs for these disease areas are amongst the least predictive and most costly of any area."

Dr. Vallance says big drug makers could be encouraged to stay more widely active in neuroscience R&D if they could share the risk of developing new drugs with government or publicly funded research institutions.

"Neurosciences research in many areas is very exciting but in some areas is not mature enough to make drug discovery efficient or effective today—which is why I believe that further investment is needed, and have argued the case for public-sector funding in this area," he says.

The sharing of data could also be promoted further, using alliances such as the Innovative Medicines Initiative in Brussels, which is developing projects between the pharmaceutical industry and academics with both corporate and European Union money, experts say.

"Big private-public partnerships are going to be needed to take research and health provision to the next level in treating these very devastating diseases," says Peter Hoengaard Andersen, who heads research at Danish CNS specialist-drug company Lundbeck A/S.

"It reflects the fact that society is deprioritizing, or downgrading, the CNS area despite the fact that psychiatry diseases are the most costly disease areas in Western societies," he adds.

Gaining better understanding of neurological diseases and their underlying dynamics will also be essential.

"The approach in how we research these diseases of the brain is going to have to change," says Dr. Hoengaard Andersen. "We need to get much better at identifying the subsectors of these degenerative diseases, because they're not one uniform disease," he says.

Big pharmaceutical companies' pullback in basic neuroscience research also reflects the fact they are not as good at initial discovery research as academic centers and biotech companies. So Big Pharma looks set to become even more reliant on academia and biotech for discovery and early drug development.

Chan Harjivan, who heads public-health analysis at international management consultant PRTM, says the trend over the past few years has been for major drug companies to look first at biotechs for acquisitions of drug candidates, but that pipeline has dried up. "Now they're reaching further back into universities and academia in general," says Mr. Harjivan.

Dr. Vallance of Glaxo agrees. "With the changing model of pharmaceutical companies, we anticipate a great proportion of our spend will be in collaboration with biotechs and academia," he says.

Professor Nutt says regulators and governments need to intervene to give drug makers incentives to resume research in neuroscience, such as co-financing arrangements and co-development programs, giving candidate mental-health drugs priority "fast tracking" regulatory assessments, and giving successful products longer patent protection.

"Neuroscience is taking the biggest hit at present. But 20 years ago antibiotics were abandoned, so we haven't had a new antibiotic in two decades and we're now facing this terrible problem of antibody resistance. That was a strategic mistake. This trend could have similar consequences," he warns.

Glaxo's Dr. Vallance is more sanguine about the prospects for neuroscience research. "As the science matures in a way that makes drug discovery and development more tractable and efficient, then we expect re-investment in the broader neuroscience field from GSK and others in the industry."‹