Personalized Medicine at Medco

In a recent press release, Medco Health Solutions announced that it is partnering with the FDA to study the applicability of personalized medicine methodologies to prescription drug treatment. Medco is the nation’s leading pharmacy benefit manager and the announcement signals the continued mainstreaming of pharmacogenomics in healthcare.

Medco and the FDA will jointly develop research projects, programs and strategies in the area of pharmacogenomics, the science of using a patient’s genotype to predict their response to drug treatments.

Medco’s objective is to advance pharmacy care and take some of the guesswork out of the prescription process. Specifically, the objectives of the program are to address:

Safety of prescription drugs
Physician participation in pharmacogenomic testing
Usefulness of tests in prescribing
Quantifying prescription information about drugs

Central to the research studies will be Medco’s extensive database of pharmacy claims. Medco is already involved with pharmacogenomic studies including Warfarin at the Mayo Clinic and tamoxifen with LabCorp.

The Progressive Blockbuster

Retiring CEO of GlaxoSmithKline Jean-Pierre Garnier has published his thoughts on the shifting pharmaceutical business model in this month's Harvard Business Review. True to his roots, Garnier advocates returning the management of R&D to the scientists.

But Garnier doesn't stop at restoring R&D management to scientists; he also has some strategies for reorganizing the drug development process. The first is to separate the processes of creating first-in-class from best-in-class drugs. Although discovering a first-in-class may be more satisfying scientifically, pharmas incur less risk and equal, or greater, rewards from best-in-class.

These two R&D processes are currently intertwined in most pharmas which, according to Garnier, leads to reduced productivity in both processes. Of course many of the functions of the processes are shared; complete separation would be impossible, but improved performance could be achieved with a concerted effort.

Garnier's next idea is what he calls "progressive blockbuster." Blockbuster status is the goal that every pharma is seeking yet is becoming more elusive as we enter the smaller patient populations of the personalized medicine era. Enter the progressive blockbuster. This is a drug that has been tested on a carefully selected sub-group of patients which have been shown to benefit and have low side-effects from the drug. The FDA would approve the drug only for patients in this specific sub-group. Once the drug has been approved and marketed to this sub-group, additional sub-groups can be added one by one as they show good results and safety. Eventually you will be marketing to enough sub-groups to make it a blockbuster. Voilà: the progressive blockbuster.

It does sound a bit more palatable to the general population than the current situation; where you begin with a blockbuster population and wait for adverse events to occur. But correlating patient response to genetic profile or phenotype will remain a tough nut to crack.

Personalized Medicine to the Rescue

The story of pharmacogenomics has reached the mass media, a.k.a. the Wall Street Journal, as a means of stemming the tide of failed drug candidates beleaguering the pharma industry. The article cites drugs from Novartis AG, NitroMed, and Clinical Data that have saved drugs that had, or would have, failed to make it to market by targeting patient sub-groups based on genotype.

Of significance in the article is stating that the pharmaceutical blockbuster model is dead and that personalized medicine may represent the new paradigm. There are in fact upsides to the smaller markets that personalized medicines command, i.e. high switching costs. With a "one-size-fits-all" drug a patient can move from one medication to another with just a trip to the pharmacy, but when using a drug is customized to a patient’s genotype, switching to a drug that is known to be less effective will be a non-starter.

One local Colorado play that illustrates the resurrection of a "failed" drug is the in-licensing of bucindolol by ARCA Discovery. Although an earlier Phase III clinical trial of the drug was terminated due to lack of efficacy, evidence has shown that certain patient sub-groups that exhibit specific genetic polymorphisms can benefit from the use of the drug.

Although the NIH Roadmap Initiatives that promoted personalized medicine and biomarker approaches four years ago weren’t mentioned in the article, the cause has been taken up by the pharmas as a new way to fill those emptying drug pipelines.

Genomic Health’s Healthy Results

Genomic Health's year end revenues for 2007 had more than doubled over 2006 it reported last Tuesday. A good 98% of that revenue was from their Oncotype DX multi-gene assay that predicts the recurrence of breast cancer in newly diagnosed patients. Both payers and physicians appear to be adopting the technology; an early entrant in the personalized medicine arena.

Genomic Health claims that health plans covering greater than 70% of the population now reimburse for Oncotype DX. Since the test provides information on which patients will benefit from chemotherapy, payers can reduce the costs of unnecessary chemotherapy treatments through the use of Oncotype DX.

Regardless of the economic benefits of the test, patients that will not benefit from chemotherapy are spared the discomfort of that treatment. Personalized medicine technologies appear to have quantifiable benefits but that alone is not sufficient to predict how well they will do in the marketplace. With these numbers however, Genomic Health sounds more confident and predicts revenues to increase to between $100 and $110 million for 2008.

Investing in Theranostics

Making a strong case for the commercial development of personalized medicines, Lisa Haile, JD, PhD calls for greater investment on the part of venture capitalists and pharmaceuticals in a recent article in Genetic Engineering News. Theranostics is the term coined for combining diagnostics and therapeutics; an essential part of delivering on the personalized medicine promise.

Not only will theranostics reduce the risks of developing drugs, Dr. Haile states, but lower the costs of development as well. Yet as compelling as that sounds, she writes that the number of commercialized theranostics products today is unacceptably low and lays the blame at the feet of the VCs and pharmas.

Personalized medicine is no doubt a paradigm shift from the "old" blockbuster pharma model, a model that pharma is loathe to abandon. More than a paradigm shift, this may in fact be a technology disruptive to the industry. As in the case of many disruptive technologies, they do not fit nicely into the industry's business models and as a result are usually passed over for technologies that provide the promise of blockbuster status.

I don't think all VCs are oblivious to the promise of theranostics however. Steven Burrill introduced me to the term two years ago in a talk where he was singing its praises. Atlas Venture, Boulder Ventures, Skyline Ventures and InterWest Partners have backed a start up pharmacogenomic play called Arca Discovery to develop cardiac theranostics. As is often the case with a disruptive technology, it requires an entrepreneurial effort to make the initial forays into commercialization.

Marathon Dog

A few years back I had the opportunity to take a friend's dogs out for runs. One of these dogs was a bulldog named Bandit. Bandit was a bundle of fast twitch muscle and would literally pull me for first mile. The second mile he would jog beside me contentedly, the third I would have to coax him along and by the fourth mile I would have to sling him over my shoulder if I had any chance of making it back home.

Despite this seeming lack of endurance, given enough time and doggy treats, I was confident I could train him for a marathon. Fortunately for Bandit, his owner decided that 5k's were the limit and probably spared him an early demise.

The story of my dog training came to mind at yesterday's Healthcare Heroes event sponsored by the Boulder County Business Report. A panel of healthcare experts provided their opinions on the future of healthcare and fielded questions. An audience member asked whether it was appropriate for healthcare providers and payers to incentivize healthy activities such as diet and exercise, since it would potentially lower the individual's healthcare needs. Although some payers do offer incentives to reduce harmful habits such as smoking, John Sackett, CEO of Avista Adventist Hospital, provided a warning that it would be difficult to issue these incentives across the general population. Given the wide genetic disparities in populations, Sackett said, standard incentives such as weight loss, may not be helpful and may even cause harm.

One size fits all healthcare has proven to be an inadequate model, should preventative programs prove any different? Are genetically based incentives a possibility? Navigenics has announced that it plans to launch a genetic test called Health Compass that will indicate what lifestyle changes people could make to avoid or delay disease. This test will be offered via the Internet for $2,500.

Although these types of tests are in their infancy, they may very well become a standard part of the healthcare process in years to come. Bandit didn’t need a $2,500 test to tell him to stop at 3 miles, his genotype was expressed quite clearly. With humans it's not nearly as clear and the benefits of testing my prove to be compelling.

Moving Forward with Personalized Medicine

A recent article in Genetic Engineering News highlights the progress Personalized Medicine is making in the healthcare environment and some obstacles that still must be overcome. Although the FDA and health insurance companies are beginning to open up to the possibilities of personalized medicine, this is far from being a common medical practice.

The one shining success in PM is the ability to distinguish between different types of breast cancer based on the expression of the HER2 gene. The results of this test indicate which therapy will provide the best treatment for the patient. One reason for this success has been an absolute convergence between diagnostic testing, devices, drugs and information.

The realization that the current model for drug development will not yield profits when applied to the smaller populations served by PM therapies is beginning to sink in. Yet no viable alternative business model for pharmas exists. There is the thought that PM is still in its infancy, that the blockbuster model still has a few more years left in it. Pharma is trying out some innovative new business models but no clear success has been achieved.

There are also regulatory hurdles to overcome. Very few FDA guidelines for clinical trials of PM therapies exist. PM is also going to require some very highly integrated information systems, combining the whole of the biomedical knowledge base with the patient's own electronic record.

Consensus is that PM will be the norm by 2020 if all stakeholders; regulators, policy makers, and private industry can work together on it. The benefits are compelling but the obstacles daunting.

FDA Steps into Personalized Medicine

Last week the FDA approved new labeling on the blood thinner Coumadin and its generic form, warfarin. The new labeling suggests that an individual's response to the drug is dependent upon their genetic makeup. Not only is the FDA opening the door to personalized medicine, but they are actually taking a leadership role in doing so, a role not characteristic of the agency.

Warfarin has been in use for some 50 years during which time it was evident that individual response to the drug was widely varied. Dosing requires careful monitoring of patients who could suffer life-threatening bleeding if dosages were too high and life-threatening clotting if the dosage were too low. A number of factors such as patient size, age and other medications were attributed to the variability in results but it was obvious that these factors did not explain the entire story.

A story in the WSJ (sub required) last week pointed out that studies over the past decade have identified two genes that were tied to the variance in results: CYP2C9 and VKORC1. Variants in either or both genes lead to different drug responses in individuals. Combining size, age and an individual's genotype can increase the confidence with which a doctor can prescribe a patient's dosage.

The FDA's leadership in making this move is a direct result of its Critical Path Initiative, a broad initiative undertaken by the agency to modernize biomedical sciences with the goal of improving the nation's healthcare. A cornerstone the CRI is the improvement of evaluation tools, specifically biomarkers and disease models. By taking this step the FDA is actively encouraging the use of pharmacogenomics; the use of genetic markers to predict an individual's response to a drug.

Already a number of labs have begun offering genetic tests for CYP2C9 and VKORC1 such as the Mayo Clinic and Labcorp. Osmetech announced last Friday that they are developing a warfarin assay that they plan to have available by the first half of 2008.

This is all being done without a critical clinical trial; the trial that compares a group of patients that are treated without genetic testing against a group that are treated with genetic testing. Given the fact that the health risk to patients without genetic testing is reduced by the extensive monitoring they undergo during their initial dosing, it is questionable whether the genetically tested patients will actually have a lower health risk. However, by taking some of the guess work out of the dosage process, doctors can more quickly converge on the correct dosage, reducing the time the patient must spend in an over- or underdosed state and certainly cutting down on visits to the doctor for monitoring.

Thalidomide Pharmion

At the same time Johnson & Johnson is developing new pricing strategies for their multiple myeloma drug, Velcade, new drugs showing efficacy against MM are coming to market. Pharmion, a local Boulder pharmaceutical, is moving toward FDA approval with Thalidomide, a compound that has been around for many years but whose therapeutic properties in the treatment of cancer have only recently been proven.

Given the relatively low efficacy of oncological drugs, Patrick Mahaffy, President and CEO of Pharmion, questioned the ability of J&J to make their pay-for-performance model profitable. If Velcade were simply prescribed to all MM patients across the board, Mahaffy asserted, charging $49,000 per successful treatment would not be enough to cover the costs of those treatments that were not beneficial. The only way it could work would be to screen for those patients most likely to benefit.

Welcome to personalized medicine! There does seem to be this idea within the biomedical community that prescreening patients is somehow invalid. Screening for relatively healthy patients that would have a high success rate regardless of treatment does tend to make the drug look more efficacious. But the ability to take other phenotypic characteristics into account in the screening process is of value, especially in pay-for-performance pricing contracts. Patients that are on the margin for benefit will be in the greatest risk here; the drug companies won't want them treated if their chance of benefiting from the drug is low.

The answer, according to Mahaffy, is to charge less for the drug treatment and abandon the pay-for-performance model. We'll be interested to see how Thalidomide Pharmion competes against Velcade in the UK market once its approved.

FDA Reclassifies IVDMIA

After much consternation on the part of the nascent genomic profiling industry, the FDA has (re)classified a gene expression test system for breast cancer prognosis from a Class III to a Class II medical device. When the Dutch company Agendia first applied to the FDA for approval of their MammaPrint test, they received a Class III designation by default. Class III requires premarket approval which would significantly increase the costs of developing these systems. Agendia petitioned the FDA for a lower classification and the FDA came back last week with the lower Class II designation. Class II requires the developer to file a 510(k) premarket notification that complies with the FDA's special controls guidance document.

MammaPrint is the first In Vitro Diagnostic Multivariate Integrating Assay (IVDMIA) to be approved by the FDA for the prognosis of breast cancer. These are a new breed of genomic profiling assays that offer the promise of personalized medicine and improvements in diagnosis and treatment.

Designation of these tests as Class III devices would seriously hamper the progress of this industry by increasing the regulatory costs. As a Class II device however, the FDA has reduced the regulatory burden but has still retained certain special controls such as a description of the algorithm used to analyze the results as well as a description of how the algorithm was derived.

This is critical since the algorithms are both the key ingredient in the tests and are proprietary. Without this control, there is no way of asserting the validity of the tests.

Although the FDA has indicated that a number of tests have been cleared as Class II devices for other tumors, this guidance has only been extended to IVDMIAs that apply to breast cancer prognostic tests. This may serve as a model for other IVDMIAs to be developed for other diseases in the future.

Risk Mitigation

As a serial entrepreneur you may think Dr. Michael Bristow has a high tolerance for risk, but in a talk yesterday morning at the downtown Denver offices of Holland & Hart, Dr. Bristow stressed the importance of mitigating risk in the drug development process. Dr. Bristow was a founder and the Chief Science and Medical Officer of Myogen, a biopharmaceutical company focused on the discovery, development and commercialization of small molecule therapeutics for the treatment of cardiovascular disorders. In November 2006, Myogen was sold to Gilead Sciences for $2.5 billion.

Although a whopping success by most counts, Myogen did not achieve this lofty value without a few pitfalls. Development of enoximone, their first drug to be brought to clinical trials, was halted in Phase III after burning through $100 million on development due to its failure to demonstrate significant benefit. Ironically, Myogen's stock began to climb after this, the result of investor confidence in the other drugs in Myogen's pipeline.

When asked what could have been done to have better predicted the outcome of the enoximone trial, Dr. Bristow indicated that it was known that a certain patient sub-group characterized by a phenotype responded better to the drug than the population as a whole. He felt that by selecting for patients with this phenotype for inclusion in the clinical trial would have greatly improved the efficacy of the drug to the point where it would have received approval. But either because recruiting a sufficiently large patient sub-group with this phenotype would have taken too long or the FDA had not yet accepted a personalized approach to drug therapy, that approach was scrapped and the more risky strategy of recruiting patient's from the broader population was adopted.

Dr. Bristow has once again taken a risk on risk mitigation by starting up a new company; ARCA Discovery that is developing genetically-targeted therapies for cardiovascular disease. The FDA and the pharmaceutical industry is warming to the idea of personalized medicine as a way of improving patient health and reducing the costs of drug development.

21st Century Medicine

On the eve of the FDA's public hearing on their draft guidance on in vitro diagnostic multivariate index assays (IVDMIAs) a group comprised of molecular diagnostic companies and investors known as The Coalition for 21st Century Medicine has asked the FDA to follow a more formal process in determining the future of this promising technology. What is being considered here is whether IVDMIAs may be subject to FDA regulation and if so, which ones and how much. Added regulation means added resources, resources that could be spent on further research and development and expansion of technologies that are still very much in a nascent stage. These are the early days of personalized medicine, a time in the life cycle of a technology where a significant investment is required to make headway. The added burden of regulation may present a set back to the industry just when businesses were beginning to show some returns.

Although regulation of IVDMIAs is inevitable, requiring the FDA to go through a more formal process before initiating regulation will buy some time, time to bring more products into the market, gain more credibility with the insurance companies and bring a greater return to investors before the added costs of regulation come into play.

FDA Approves Breast Cancer Test

As I was writing yesterday's blog, the FDA announced the approval of a genetic prognostic test for breast cancer recurrence. The test MammaPrint was developed by the Dutch company Agendia and is the first in vitro diagnostic multivariate index assay (IVDMIA) device to be cleared by the FDA.

MammaPrint uses a microarray chip to measure the activity of a set of 70 genes the pattern of which will predict whether the cancer will metastasize. Many women who have their tumors removed undergo chemotherapy on the theory that it will reduce their chances of recurrence. Studies have shown however, that most will not experience recurrence and don't need the chemo. However, it was unclear as to which patients would benefit from chemo and which would not forcing many women to needlessly undergo the treatment and its painful side effects. This test promises to make the decision easier and has shown to be 96.7% accurate.

Genomic Health also markets a genetic breast cancer prognosis test called Oncotype DX. Oncotype DX profiles 21 genes using RT-PCR technology. Both tests run between $3,200 and $3,500 and health insurers and Medicare are initiated coverage of Oncotype DX.

The FDA will hold a public meeting tomorrow to discuss its draft guidance describing its regulatory approach to this type of test.

Regulating Genetic Testing

Although there are around a thousand genetic diagnostic tests available in the U.S., only six are approved by the FDA. So if you want to know if you have a gene for susceptibility to a bacteria living in hot-tubs you can submit your genetic material to any one of a number of labs and have them run a test. Of course there's no guarantee of the results, either that the genes tested for are markers to indicate susceptibility or the algorithms matching the expression profiles to susceptibility are correct. Even after testing negative for the genes you may still get the dreaded hot-tub bug. For this reason, the FDA has recently announced that it will begin the public comment period regarding genetic tests. David Ewing Duncan has written an article in Technology Review on this impending arrival of personalized medicine.

New Funding Sources for Drug Development

In Sharon Begley's column Science Journal in today's WSJ she discusses the difficulties in bringing therapeutic technologies generated in academic research to the market. Because pharmaceutical companies require large returns to justify their investment and risk in drug development they are understandably reluctant to fund the development of a drug that has a small market. Although there are many obstacles to translational research; bringing laboratory research results to the patient in need, financial barriers may be one of the most significant. As in all technology transfer, if the numbers don't work it is difficult for a for-profit drug company to get approval for drug development.

So this is where the non-profit research foundations are now stepping in. Foundations such as the Juvenile Diabetes Research Foundation, Michael J. Fox Foundation and Families of Spinal Muscular Atrophy who have been active sponsors of basic research in the past, are now stepping up to fill the gap left by drug companies unwilling to fund some or all of the drug development process. This is a new world for these foundations that have developed administrative systems geared more for dealing with academic institutions than with private pharmas.

Nonprofits may be filling the translational research gap for drugs specific to their disease of interest, but the issue of small target markets for drugs is not limited to rare diseases; this is the future of pharmaceuticals. The day of the blockbuster drug is over and the day of personalized medicine has dawned. In order to improve medical outcomes, drugs will become more targeted, thus decreasing their potential markets. Pharmaceuticals will have to adopt to this new paradigm or face a continually diminishing pipeline of blockblusters.