One year ago, the Food and Drug Administration Safety and Innovation Act (FDASIA) was signed into law. Its most current version includes a provision that allows sponsor companies to request their drug be designated as a “breakthrough therapy.” In February, Johnson & Johnson (J&J) became only the second company (behind Vertex Pharmaceuticals) to have a drug receive this designation.
The drug, ibrutinib, is an oral Bruton’s tyrosine kinase inhibitor. Thus far, ibrutinib has garnered three breakthrough designations (mantle cell lymphoma, Waldenström’s macroglobulinemia, and a subset of patients with chronic lymphocytic leukemia who have a particularly poor prognosis) of the more than 40 requests the FDA has received. In addition to this success, J&J recently won accelerated FDA approval for Sirturo (bedaquiline), the first drug with a new MOA (mechanism of action) for tuberculosis (TB) to be approved in 40 years. It seems J&J’s pharmaceutical business is on a roll.
Driven by its R&D engine, Janssen Research & Development, J&J has been capitalizing on FDA initiatives that not only incentivize drug innovation but also reward successful companies. Bill Hait, M.D., Ph.D., is the global head of Janssen R&D. He explains some of the company’s approaches to drug discovery that have resulted in J&J recently being ranked by Forbes as the most productive drug firm in the last 10 years.
Focus On Unmet Medical Need Can Offer Big Wins
It might seem clichéd in drug discovery to say, “Focus on the unmet medical need as opposed to commercial viability.” But being altruistic also can lead to big dividends. For example, in 1998 Remicade (infliximab) was the first drug specifically approved for patients with moderate to severe Crohn’s disease, a bowel ailment that afflicts approximately 500,000 Americans. This equates to .16% of the U.S. population. At the time, there were conventional, less-expensive treatments available, including steroids and antibiotics. If Centocor (now Janssen) had not pursued approval of this drug based on the relatively small commercial market (designated fast-track, orphan drug status, priority review), the company would have missed out on significant sales revenue, including $6.1 billion generated by Remicade in 2012. Currently the drug represents nearly 25% of the company’s pharmaceutical sales. Since its initial approval, Remicade has received FDA approvals for 15 additional indications, which have not only dramatically increased the commercial viability of the drug, but also more importantly, have benefitted far more patients than the initial single indication. Hait cautions against using potential commercial success as the only criterion for pursuing a drug for approval, pointing to the first new treatment for TB in 40 years.
In December 2012, the FDA granted accelerated approval for Sirturo as part of a combination therapy to treat adults with pulmonary multidrug resistant TB (MDRTB). Presently there are approximately 100 cases of MDRTB annually in the United States and about 500,000 cases globally. If you thought the initial market for Remicade was small, Sirturo’s market, by comparison, is downright microscopic. “If commercial success were the only criterion, you probably would not go after a drug for TB,” says Hait. “You need to place some bets on drugs you think are going to have a major impact for doing good in the world. That’s what ethical companies do.” Consider this — globally, one in every three people already carries the germ (bacterium) that causes TB. Once TB becomes active, and if left untreated, as many as half of those afflicted will die. “It’s a huge problem,” attests Hait. According to Hait, it is important to balance your company’s portfolio with commercially viable candidates against those, which on the surface, may have less commercial appeal, yet could prove to be hugely important to humankind and help the company maintain an innovative culture.
Sirturo had been in development for nearly a decade. Yet Hait assures that the drug was neither sitting on a shelf in limbo nor a pet project for which researchers allocated a small percentage of their time. “It was a drug that had a very dedicated small team in our labs in Belgium, who were continuously gaining a fuller understanding of how it was going to work and be used,” he explains. If the drug had been killed based on its small potential commercial market, it could have been a devastating blow to the morale of the R&D team. “It’s really important for the culture to keep those projects going — when they are working,” reminds Hait. Perhaps Sirturo has the possibility of additional indications, or it could lead to other breakthroughs arising from the research. Only time will tell. Although Hait expresses the importance of keeping projects going as they can lead to other research and serve as morale builders, even a company the size of J&J can’t fund every project. Sometimes it is necessary to find other opportunities for lower priority projects — thus the development of the J&J innovation incubator.
To prioritize drug development, J&J uses a model that started in Janssen’s oncology R&D unit and expanded across all therapeutic areas. “We define the highest-priority diseases within each therapeutic area,” says Hait. “For example, in immunology, we define rheumatoid arthritis, inflammatory bowel disease, and psoriasis as our top areas of investment.” Hait uses the following questions to determine which drugs to move forward internally. What is the unmet need? How compelling is the science? How innovative is the product? Does the drug work, and how well? How different is it from other drugs in the space, or those being advanced by other companies? In addition, the company calculates the net present value for all of the company’s drug assets to assist in prioritizing. This calculation becomes more precise as the drug develops, as a lot of preliminary calculations are based on the probability of technical and regulatory success (see sidebar “Approaches For Calculating Net Present Value [NPV] For Drug Discovery”). “If the drug isn’t highly innovative, differentiated, with high activity early on, it gets killed very early,” he attests. “Low activity, a me-too type of drug, all sorts of problems in early development, or preclinical toxicity issues should be red flags to kill a drug quickly.” There are other reasons to focus on unmet medical needs as well; namely, the FDA has created incentives for those companies that do and gives rewards for those that are successful.
FDA Incentivizing Breakthroughs, Not Blockbusters
The FDA’s breakthrough therapy designation was enacted to expedite the development and shorten the review time for potential new medicines to treat serious or life-threatening diseases. If preliminary clinical evidence indicates that a drug may demonstrate substantial improvement over existing therapies on one or more clinically significant outcomes, such as substantial treatment effects observed early in clinical development, it may qualify for the breakthrough designation. Janet Woodcock, M.D., director for CDER (Center for Drug Evaluation and Research) at the FDA, remarked in February that it will be possible to win approval based on expanded Phase 1 clinical data. The benefit to a company of getting the breakthrough designation is a quick review, possibly shaving significant time from this traditionally slow process. “It is one of the most exciting FDA incentives for us at the moment,” says Hait. “If you are working on a risky project where you think there is the potential to be substantially better than anything that exists for patients in this area, it gives you an incentive to take that risk.”
According to Hait, one of the benefits of gaining this designation is the change in the relationship between your company and the FDA — resembling that of a strategic partnership. “The FDA has shown tremendous flexibility in the amount of data you need initially to accelerate getting the drug to patients,” he affirms. For example, when ibrutinib first received its breakthrough therapy designation, it was based on Phase 2 clinical data. Such acceleration benefits suffering patients because no longer do they have to wait until the pharmaceutical company completes the traditional three-phase drug development plan to gain access to and potentially benefit from the medication. Hait reminds us that receiving the breakthrough designation does not eliminate the requirement for completing Phase 3 clinical trials and post-marketing analysis, because you still have to show the drug is safe in a large population.
Another FDA incentive J&J capitalized on is related to tropical-disease treatments. As was pointed out previously, TB is a much bigger problem outside the United States. To encourage companies to develop drugs aimed at solving global health problems that may have little commercial appeal, the FDA developed a voucher program, which falls under the FDA Amendment Act of 2007 (FDAAA). When J&J gained FDA approval of Sirturo, it became eligible to receive a transferrable voucher that allows the bearer to designate a single human drug application (i.e. another drug in the company’s pipeline) submitted under section 505(b)(1) or section 351 of the Public Health Service Act, to receive six-month priority review status. By developing a nonrevenue-generating and yet lifesaving drug, J&J has the opportunity to accelerate FDA approval of another drug in its pipeline.
Where is the best place to use these vouchers? “There’s no formula,” admits Hait. “We look for opportunities. Is there an opportunity to enhance the progression of our internal pipeline by using the voucher? We’ve thought about this in partnering. It’s a very valuable asset to have available and is another great FDA incentive.” Conversely, Hait advocates thinking about when not to use a voucher. “You wouldn’t want to use it on a project that is already moving quickly,” he notes. “When you have complex drug-development issues and are looking for partners to help, a voucher could be very beneficial as you weigh risk versus reward around the asset you think could benefit the most from voucher utilization.”
Partnering For Productivity
There is a saying, “If you can’t beat ‘em, join ‘em.” But, when you are a company with nearly 130,000 employees, is it really necessary to partner in order to improve productivity of a drug that’s been in development for 13 years? According to Hait, this is exactly what was done with the development of Invokana (canagliflozin), a sodium-glucose co-transporter 2 (SGLT2) inhibitor for adults with type 2 diabetes. The development of Invokana had been strictly internal, but fearing that one of its competitors, Mitsubishi Tanabe Pharma, might be ahead in developing the same type of compound, J&J sought collaboration. Hait describes the collaboration with Mitsubishi as a “receptor ligand issue — we attracted each other.” Perhaps this openness to collaboration is one of the reasons J&J has been ranked as the most productive pharmaceutical company in the last 10 years. The collaboration with Mitsubishi allowed the companies to optimize processes and share knowledge — keys Hait attributes to gaining FDA approval of Invokana, an entirely new class of drug, this past March. If you are looking to have similar success, Hait advises you prioritize your pipeline appropriately, capitalize on FDA incentives, focus on unmet medical needs, and don’t use the possibility of commercial success as the only criterion for where to invest in R&D.
The Janssen Incubator Approach
When Janssen expanded the R&D drug prioritization model developed in oncology across all therapeutic areas to determine the top targets for investment, Bill Hait, M.D., Ph.D., recalls the passion with which some teams received the news of their project being deprioritized. “The autoimmune team went ballistic because they had something very exciting in development regarding lupus,” he observes. This is one of the reasons we developed the Janssen Incubator. “If you are so excited about your project, and really think there is something potentially great, will you take the risk of going into the incubator to pursue it?” he asks. Just because a passionate researcher believes a project is worthy of acceptance into the incubator does not guarantee it will be granted. According to Hait, the company has developed a stringent review process for researchers to enter into the Janssen Incubator. If accepted into the venture program, they remain Janssen employees, continue to receive a salary, and are given access to research tools and facilities. “We can always bring them back,” he clarifies. “But they have a threeyear window in which they must make significant progress.” Thus far, the company has selected three internal teams to place in the incubator. Hait views the Janssen Incubator as a great strategy for nurturing an innovative culture, while helping to communicate the process of rational research investment decision making. The three teams currently participating in the Janssen Incubator started up in January 2013, and there is an ongoing process to select additional projects for investment this year.
How To Apply For The Breakthrough Therapy Designation
Keeping up with global regulatory changes can be a challenge for a small or virtual pharmaceutical/biotech. If you have a drug in development that might qualify for the breakthrough therapy designation, here is what you need to know.
The request for the designation should be submitted concurrently with, or as an amendment to, an Investigational New Drug (IND) application with a cover letter and a completed form 1571 with the following information, which in most cases should be explained in approximately 10 to 20 pages:
If the breakthrough therapy designation request is submitted to the sponsor’s IND as an amendment, the cover letter should indicate the submission as a REQUEST FOR BREAKTHROUGH THERAPY DESIGNATION in bold, uppercase letters. If the request is submitted with an initial IND, the cover letter should indicate the submission as both an INITIAL INVESTIGATIONAL NEW DRUG SUBMISSION and a REQUEST FOR BREAKTHROUGH THERAPY DESIGNATION in bold, uppercase letters.
If you do everything properly, you will find out whether your application has been granted or denied within 60 days. For more information, you can visit the FDA website, which provides contact information for breakthrough therapy coordinators, frequently asked questions, and other useful information at http://goo.gl/Cl13M.
*Information derived from FDA website under Fact Sheet: Breakthrough Therapies
Is The Breakthrough Therapy Designation A Good Thing?
When I attended the FDA/CMS Summit last December, the ink was still drying on FDASIA and the FDA’s new breakthrough therapy designation. One of the event’s speakers, Steven Nissen, M.D., chairman of the department of cardiovascular medicine at the Cleveland Clinic Foundation, said that accelerating a drug’s approval should be rare and questioned the thinking behind the FDA’s breakthrough therapy designation. Nissen’s opinion is in sharp contrast to Janssen’s global head of R&D, Bill Hait, M.D., Ph.D., who describes the policy as being one of the “most exciting” incentives to encourage pharmaceutical companies to be innovative — rewarding those willing to take chances on what would otherwise be highly risky and expensive projects.
Why the difference of opinion? After all, both Nissen and Hait are physicians who put patients first. My speculation is as follows. Nissen, a cardiologist, witnessed the debacle when one of the most respected drugmakers in the world, Merck, gained FDA approval for Vioxx, a drug that was eventually pulled from the market after being linked to heart attacks and sudden cardiac deaths. Conversely, Hait has 20+ years of experience in cancer research. I imagine he has witnessed his share of heartbroken families losing loved ones while awaiting cures. Both perspectives are valid. However, I side with Hait and view the breakthrough therapy designation as a good thing.
The fact sheet for the process of applying for breakthrough therapy designation is very specific, to the point of requiring that the “REQUEST FOR BREAKTHROUGH THERAPY DESIGNATION,” and other points in a company’s cover letter and submission to be written “in bold, uppercase letters.” This demonstrates the thoroughness with which government agencies leave nothing to chance. So, too, does this language from the FDA: “The Secretary shall, at the request of the sponsor of a drug, expedite the development and review of such drug if the drug is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.” Time may prove me wrong. But given the parameters the FDA has placed on applying for and obtaining the designation, I don’t anticipate this creating a “gold rush” of unnecessary drug approvals.
Approaches For Calculating Net Present Value (NPV) For Drug Discovery
According to Bill Hait, M.D., Ph.D., one of the drug prioritization techniques employed by J&J is NPV. “Most companies use similar types of algorithms,” states the global head of Janssen R&D. A report produced by consultants McKinsey & Company in which 44 CEOs and the business developers from representative pharmaceutical and biotechnology companies were interviewed does not necessarily agree with Hait’s assessment. Of those interviewed, McKinsey found that one-third admitted to not employing any economically valid evaluation method. Of these, 21% used simple cost-plus approaches, and 12% simply made an educated guess. If you fall into one of these categories, you may find the recent article (April 2013) by Andreas Svennebring and Jarl Wikberg, Net Present Value Approaches for Drug Discovery, useful.
Obviously, given the complexity of drug discovery and the high costs of producing reliable data, it is difficult to model the cost of drug discovery. Further compounding this process would be projects requiring major investments, e.g. constructing a building. McKinsey’s findings are not surprising if you review the article, the various formulas, the necessary assumptions, and so on. If you are a smaller company and don’t have experts in rNPV calculations, you may find a review of Svennebring and Wikberg’s work to be insightful and can do so for free by using this link — http://goo.gl/2O9mP. Another useful tool for those with limited resources is an rNPV Excel spreadsheet developed by the Milken Institute. It is free to download here — http://goo.gl/Tg9Yw. Though you may have a great deal of experience in drug discovery, whether your company is big or small, your investors will require a robust calculation, not an educated guess.