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Harnessing the genome
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May 10, 2000: 8:13 a.m. ET
Experts say flood of genetic data will change pharmaceutical research
By Staff Writer Martha Slud
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BALTIMORE (CNNfn) - For all of the recent scientific and investor excitement over the race to decode the human genome, pharmaceutical companies are grappling with a daunting next step: How will they turn this growing knowledge about our genetic structure into powerful -- and profitable -- new medicines?
The unraveling of the human genetic code -- the encyclopedia of roughly all 100,000 genes in our bodies -- has been billed as one of the most significant scientific advances of our time. Anticipation over the development has created a flurry around biotech stocks, especially those companies involved in creating gene-mining tools and genetic databases.
But experts say it likely will take about five years to bring a new drug to market based on this research. And exactly how drug makers will harness all of this data remains unclear.
What is certain, said drug development experts at this week's Baltimore health care conference sponsored by investment bank Deutsche Banc Alex. Brown, is that it is becoming more and more essential for pharmaceutical companies to come up with major breakthroughs in how they discover new medicines if they want to improve their bottom lines.
Drug makers, they said, are rapidly running low on blockbusters, because of looming patent expirations on top-selling treatments, dwindling pipelines of promising new products, and skyrocketing research and development costs. Pharmaceutical companies currently spend roughly $500 million to discover and develop each new drug -- a process that often ends in failure and can take an estimated 10 to 15 years to bring a product to market.
The pharmaceutical industry currently boasts about $1.5 trillion in collective market capitalization and $250 billion in annual revenue. But without a revolution in drug discovery, the industry will have a tough time sustaining its consistent, double-digit revenue and earnings growth, said Kevin Tang, a Deutsche Banc biotech analyst.
"There has to be a major shift in productivity," said Stuart Collinson, chief executive officer of Aurora Biosciences Corp. (ABSC: Research, Estimates), which is engaged in trying to speed up the drug discovery process through a high-tech system that scans for genes believed to play a role in disease.
"If this paradigm shift does not take place, we will not see the number of medicines required in the future to truly change the face of medical research," he said.
The San Diego-based company has strategic pacts with companies including Bristol-Myers Squibb Co. (BMY: Research, Estimates), American Home Products Corp. (AHP: Research, Estimates), Merck & Co. (MRK: Research, Estimates), and Pfizer Inc. (PFE: Research, Estimates) and Warner-Lambert Co., (WLA: Research, Estimates), two firms which are planning to merge to create the largest U.S. drug maker. Analysts say that one of the factors driving big pharmaceutical mergers is the slowing pipelines that drug companies are facing.
So how can the charting of the human genome improve drug development? Experts say that of the estimated 100,000 genes in the human body, about 5,000 to 10,000 are believed to play a role in disease. Currently, drug developers have targeted only about 500 of these genes.
 By better understanding genetic structure, researchers will be able to target more genes as candidates for new compounds that can treat a variety of diseases. With this knowledge, researchers hope to open the floodgates of drug discovery to find individualized treatments for diseases such as cancer, depression and Alzheimer's disease.
"One can only imagine if we unlock the secret to these and thousands of other targets what will happen in the worldwide pharmaceutical universe," Tang said.
But this huge jump in the number of potential drug targets means that pharmaceutical companies are going to have to find ways to research all of these leads. They will need to revamp their drug development efforts and go in with a "SWAT-team"-like approach to quickly evaluate this deluge of genetic information, one expert said.
Drug companies will have to develop "the ability to take information and prioritize your activities not only in terms of discovering these candidates, but then deciding which candidates have the highest chance for making it all the way to the market," said Kenneth Shaw, senior vice president at Branford, Conn.-based Neurogen Corp. (NRGN: Research, Estimates), which is engaged in early-stage development of drugs for anxiety, schizophrenia, epilepsy and other disorders.
A more efficient industry
Experts say that for the drug industry, one of the big benefits of genetic discoveries is that this new knowledge base could bring drugs to market quicker -- helping boost productivity and profits. By developing more targeted and potent medicines, scientists hope to quicken the pace of clinical trials of new treatments -- a cumbersome and expensive process that often ends up being scrapped because the proposed treatment turns out not to be effective.
Also, this new paradigm is seen as making medicines that are more customized to a patient's individual genetic profile and reduce the risk of side effects. Analysts point to the recent withdrawals of several popular drugs, such as Warner-Lambert Co.'s (WLA: Research, Estimates) diabetes treatment Rezulin, and Propulsid, a heartburn treatment made by Johnson & Johnson (JNJ: Research, Estimates), because of fatal side effects in a small number of patients.
Gene-based drug development could better identify which patients would benefit from a treatment, and which ones should stay away from it, Tang said. That would mean that patients at greater risk for side effects would never be prescribed a certain treatment in the first place.
In the future, predicts Aurora CEO Collinson, drug makers will shift away from big-name drugs that are designed to serve wide swaths of the population -- such as Eli Lilly and Co.'s (LLY: Research, Estimates) antidepressant Prozac -- and instead develop smaller, customized drugs that are cheaper and easier to develop. This development will completely alter the way companies both make and market their products, he said.
"Armies of salespeople descending on doctors and physicians will not be the way to go," he said. 
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