Magazine Article | May 12, 2011

Oncology: The Next Step

Source: Life Science Leader

By Cliff Mintz

Two U.S.-based Astellas executives, Wayne Klohs, Ph.D., VP, and global therapeutic area leader, oncology, and Joshua Schafer, M.S., MBA, VP global oncology strategy, have been charged with building and directing the Astellas oncology franchise. Dr. Klohs has more than 27 years of experience in pharmaceutical and oncology drug development. Mr. Schafer was previously an oncology executive with Takeda Pharmaceuticals North America, Inc. He and Dr. Klohs previously worked together at Takeda.

Despite their extremely hectic and busy schedules, I managed to get both Dr. Klohs and Mr. Schafer in the same room at the same time to discuss new oncology drug development and how Astellas plans to penetrate the crowded and highly competitive global oncology market.

Neither Yamanouchi nor Fujisawa — the two companies that merged to form Astellas — were household names in oncology. What factors led to the decision to make oncology one of the main focuses at Astellas?
Klohs: Interestingly, I was asked the same question by senior management back in November 2008. While on the surface Astellas doesn’t appear to have much experience in oncology, both Yamanouchi and Fujisawa previously had marketed some older oncology drugs. So, at least historically, there was some oncology experience at the combined company. This, coupled with enormous global unmet medical needs in various oncology indications, prompted management to get back into oncology R&D. The goal is to establish Astellas as a worldwide leader in this category by 2015.

Because of our previous experience in urology, we decided to focus our initial efforts on developing new drugs to treat urological oncology indications, including bladder and kidney (renal cell carcinoma) cancers. And, as we continue to hone our skills and expertise in oncology, R&D will be expanded to include non-urological cancer indications as well.

Schafer: Oncology spoke to the type of pharmaceutical company that Astellas wants to be. That is, one that is committed to delivering high quality products to specialty markets of patients and physicians. We believe our expertise in urology, combined with a commitment to develop first-in-class novel oncology drugs, uniquely positions us to develop new agents that will ultimately benefit the patients who use them.

With the acquisition of Agensys and more recently OSI, Astellas has clearly signaled its intention to enter the oncology market. How will Astellas compete in this already crowded and highly competitive market?
Klohs: Again, management asked me the very same question about our ability to compete with some of the largest companies in the oncology space. And, at the time, I told them that to be successful we must be willing to take risks and develop novel, first-in-class oncology compounds. Surprisingly, management bought into the idea despite the obvious high risks associated with this approach.
The purchase in 2007 of Agensys was really pivotal in Astellas’ development as an oncology company, mainly because Agensys possesses a proprietary technology to identify novel and previously unknown new oncology targets. Every antibody or antibody-drug conjugate molecule that comes out of Agensys has a unique and proprietary oncology target which gives us a competitive edge over our competitors.

Another reason Astellas will be able to compete is that, unlike almost all of our competitors, we still have natural products screening and development capabilities. We have active, high throughput, natural products screening programs that have yielded drugs like Prograf (immune suppression in organ transplantation) and depsipeptide (in clinical development for lung cancer). We anticipate that other novel oncology drugs will be discovered using our natural products screening approach.

Finally, the acquisition of OSI gave us a small molecule, oncology discovery group, coupled with the ability to do outstanding translational science. The OSI group actually drives much of the new oncology drug development at Astellas and pretty much dictates the direction we will pursue to develop new agents. Personally, I don’t worry too much about the 800-pound oncology gorillas — I think we are well-positioned to compete with them and be successful.

Schafer: We believe there is still a lot of room for new oncology products that are innovative and fulfill unmet patient needs. Our strategy is not to develop oncology drugs that are incrementally better than existing ones but to aggressively pursue new first-in-class compounds that confer much greater benefits and clinical outcomes for patients. To that end, we previously entered into an agreement with Medivation to develop and commercialize a promising new treatment for advanced prostate cancer, and more recently we partnered with AVEO Pharmaceuticals to codevelop and commercialize a novel compound to treat renal cell carcinoma. Over the long term, we plan to leverage Agensys’ monoclonal antibody (MAbs) development expertise and antibody-drug conjugate (ADC) technology to create a pipeline of innovative first-in-class oncology products.

The ADC technology being developed by Agensys to treat cancer is not a new or novel idea. Why is there so much excitement and renewed interest in this technology?
Klohs: Renewed interest in ADC is mainly driven by the development of highly specific MAbs against novel cancer targets and improvements to the technology that is used to chemically link the oncology drug to the MAb to form the conjugate.

The researchers who originally developed ADC did not realize the critical importance of the linker technology. While early ADC conjugates were accurately delivered to cancer cells or tumors, they were frequently highly toxic molecules. This is because chemical instabilities of the ADC linkers resulted in premature release of drugs from the conjugate prior to entry into cancer cells. Further, to be effective, the intact ADC molecule had to be taken up by cancer cells and then the attached toxin or drug released from the conjugate during the internalization process (by enzymatic or chemical destruction of the linker molecule). It literally took us years to figure this out, but that is why you are seeing an explosion of companies getting into ADC. Based on our experience, Seattle Genetics’ linker technology is superior and may be one of the best that is available. In my opinion, ADC technology is a game changer and represents the future of oncology drug development. We will continue to heavily invest in it.

What are some of the hurdles that must be overcome to develop new oncology drugs?
Klohs: One of the greatest challenges when developing new oncology drugs is the competition for patients, whose participation in clinical trials is required for regulatory approval. This is frequently overlooked, but a very real problem from a regulatory standpoint for many companies. For example, in the United States, roughly 5,000 new patients per year develop renal cell carcinoma. Only 5% to 10% of patients with renal cell carcinoma participate in human clinical trials. At present, there are over 300 clinical trials in the United States being conducted for that indication. In other words, there is an ongoing shortage of U.S. patients to conduct meaningful clinical trials for certain oncology indications like renal cell carcinoma. This forces us to look for patients and conduct clinical trials outside of the United States. Also, sometimes it is difficult to identify experienced investigators and medical oncologists who are capable of running certain oncology trials. Consequently, it is becoming increasingly difficult to cost-effectively conduct clinical trials for certain cancer indications.

Another challenge is the rapidly changing standard of patient care for many oncology indications. New drugs and treatment regimens regularly become available, and it certainly affects how we design and conduct our clinical trials. This is also making new oncology drug development more difficult and challenging.

Lastly, the industrywide failure rate of drugs in Phase 3 clinical development is currently too high and unsustainable, in my opinion. To that end, I strongly believe Phase 3 studies should not to be initiated unless data from Phase 2 studies are sufficiently positive to suggest likely success in Phase 3. I have repeatedly mentioned this to Astellas senior management, and they appear to be on board with my assessment.

Schafer: Companies in the oncology space are constantly vying for talented persons to help them to be successful. Because there is a limited pool of people in the workforce with oncology experience, it has been difficult for us as a new entrant to the field to find and attract qualified professionals in the areas of clinical drug development and oncology marketing, strategy, and brand awareness.

That said, both large and small companies alike are struggling with the limited oncology talent pool. With this in mind, persons with strong oncology backgrounds can pretty much write their own tickets and choose which companies to work for. Put simply, these folks are no longer “a dime a dozen” to find.

Another major challenge is the increasing focus and scrutiny (across all markets) being placed on pricing of new oncology agents. Historically, oncology drugs frequently commanded high prices, and payers were willing to cover most treatment costs. However, these days the therapeutic value (safety and efficacy) of oncology drugs must now be demonstrated before payers or government agencies will agree to reimburse the patients who use them. At Astellas, we are very sensitive to these issues and, as a result, try to think about the “potential value” of new oncology drugs as early as possible in their development cycles. This approach helps us to design better clinical development programs so the price of a new agent is based on economic realities, not on marketing and promotional pricing expectations.

Unlike many of its competitors, Astellas is employing both a small molecule and biologics approach to discover new oncology agents. What is the rationale for this strategy?
Klohs: First, the acquisition of OSI markedly increased our expertise in small molecule discovery. Second, there are certain oncology targets that are not conducive for an antibody approach and are only amenable to a small molecule strategy. Third, crosstalk between OSI and Agensys scientists has led to the discovery of new targets and, in some instances, allowed us to attack a specific oncology target using both an antibody and small molecule approach in concert. Finally, I believe our natural products discovery platform gives us a decided edge in small molecule discovery as compared with competitors who lack this capability. This is because natural products frequently provide us with some really unique chemical structures that no medicinal chemist would ever think of!

Which oncology markets represent the greatest growth opportunity for Astellas?
Schafer: The United States still represents one of the largest market opportunities for Astellas as a new entrant to oncology. However, looking 5 to 10 years into the future, we see real opportunities to expand our oncology products in Europe and Africa. And, because we are a Japanese company, we are one of the main market leaders in Asia. Our Asian heritage provides us with a real advantage as we introduce new oncology products into this region. Finally, like many of our competitors, we are turning our attention to emerging markets in Brazil, Russia, India, and China. We view these markets as real future growth opportunities for Astellas in oncology and other therapeutic areas.

How does Astellas innovate?
Klohs: While it is easy to acquire companies or in-license new compounds, I believe innovation in R&D will sustain Astellas over the long run. At Agensys, we are constantly improving and strengthening new targets discovery and refining our existing MAb technology and capabilities. For example, I think Agensys’ ADC technology is a jewel, and it is not one that we will let wither on the vine. At the same time, OSI scientists continue to innovate by leveraging their outstanding capabilities and expertise in translational medicine.

While everyone talks about translational science, very few companies can really “walk the walk.” This isn’t the case at OSI. There, I have witnessed the innovative impact of translational science on the development of agents like Tarceva and more recently with some of our pipeline products.

Schafer: One of the ways Astellas innovates can be found in the melding of its Japanese and Western cultures and heritages. The Japanese heritage offers Astellas careful, analytical, and precise long-term future planning (often 5 to 10 years out). This is counterbalanced by the rapid decision-making process and flexibility that is characteristic of Western culture. I think it is the marriage of these two cultures that helps Astellas innovate in ways that are different from other companies and unique to us.

Another way Astellas innovates is through the flexibility of its partnering strategy. Over the years, we have done three to four significant deals, each of which is unique and slightly different from the other. Not only do we view partnering as a great opportunity to gain access to promising new products, but also as a means to garner access to new ways of thinking (and other intellectual capital) that allows us to innovate and grow as a company.

Many U.S. drug companies contend it is getting increasingly difficult to garner regulatory approval for new pharma and biotech products. Do you agree?
Klohs: If a clinical trial is appropriately designed and well-executed and the FDA is approached in a collegial and collaborative way, then garnering regulatory approval for a new oncology agent — especially if the agent exhibits great efficacy — is likely to be much less onerous than some industry experts would have you believe. With this in mind, I believe the agency was sending all of pharma a clear message with the approval of cabazitaxel for the treatment of advanced prostate cancer. The cabazitaxel trial was beautifully designed and perfectly executed, the analysis was first rate, its efficacy was robust, and the drug was approved in less than four months. The take-home message was, “Do this, and we [FDA] will work with you to get your drug approved.”

We recently visited the FDA to discuss a trial, and I was very impressed with the results. The process was extremely collaborative, and we essentially designed the trial with them.