The Top Phase III Disasters of 2012
Drug development is a tough business. Sometimes, just when you think you're getting to the pot at the end of the rainbow, you find the trap door one step away.
It's not supposed to work that way. The further you get down the pipeline, the better your shot at success. By the end of Phase II, investigators are supposed to have a solid set of significant safety and efficacy data on humans. Phase III is where the big bets are made, based on good science and some unprecedented demands for new products.
Sometimes, though, it's hard to tell where the science leaves off and the magical thinking begins. The desire to score a modest clinical success for Alzheimer's, an automatic gold ticket to a megablockbuster market entré, convinced some experts to push ahead with some incredibly risky bets--which flopped. The same goes for hepatitis C, where there's gold at the end of a rainbow for the first interferon-free drug to hit the marketplace.
About a third of all Phase III studies end in disaster. The analyst Tim Anderson recently produced a report pointing to a 65% success rate, which is down from the 70% success rate tracked just a few years ago.
Of course, it's also worth noting that not all the big blockbusters we hear about in the clinic actually live up to analysts' expectations. Making a peak sales projection is more art than science, and the art often looks rather comical in retrospect.
Dendreon's ($DNDN) big blockbuster Provenge? The prostate cancer therapy earned $80 million in the second quarter, down a bit from Q1 with new competition piling up. The company's been forced to cut costs, changed CEOs and talks tough, but their drug is flailing.
Human Genome Sciences' big lupus breakthrough Benlysta? Disappointing sales drove down HGS shares, leaving the biotech virtually defenseless when its longtime partner GlaxoSmithKline ($GSK) scooped it up for the bargain basement price of $3 billion. At one point, analysts projected that Benlysta could make more than that in a year.
Every year we see a good number of potential blockbusters come down to the pivotal wire. And in Part II of this feature I'll highlight the biggest potential blockbusters in the clinic stirring a buzz. But no review of the latest crop of blockbusters would be complete without an assessment of the biggest failures. And 2012 has seen some of the biggest failures in the history of drug R&D.
Here are my top 5 flops of the year:
BMS-094 - Bristol-Myers Squibb
BMS-094 takes the top position. Not many biopharma companies can lay claim to this kind of failure. Just 7 months after Bristol-Myers Squibb ($BMY) grabbed this hepatitis C treatment in its $2.5 billion buyout of Inhibitex, the drug and the lion's share of the investment went up in smoke after a patient sickened and then died of heart failure. Other patients were laid up in the hospital as well. The initial cost was $1.7 billion in writeoffs, though some analysts are still trying to figure out why Bristol thinks the other programs obtained from Inhibitex could be worth $800 million.
Aside from the money also invested in the short R&D program, Bristol-Myers Squibb is also staring down some personal injury lawyers who are eager to make the case that the company recklessly exposed their clients to lethal side effects. A few insightful experts have been making a case for the attorneys, noting that there were some clear red flags for this treatment before Bristol-Myers got its hands on the drug.
Bapineuzumab - Pfizer, Johnson & Johnson
Bapineuzumab comes in a close second. By the time Pfizer ($PFE) and Johnson & Johnson ($JNJ) read out the Phase III failure and officially retired the program, just about every analyst in the business had given this virtually no chance of success. Why? The Alzheimer's drug tried to tackle the amyloid beta hypothesis at the wrong stage. Recruiting mild-to-moderate patients whose brains had already been damaged left little chance that their therapy could repair damage after it was done.
For Pfizer, the failure was another expensive reminder that its high-stakes strategy to develop new drugs for this disease has been fatally flawed. The Dimebon disaster left a mark. And the serious adverse events associated with the drug could well doom any attempt to bring this drug back as a preventive therapy.
Solanezumab - Eli Lilly
By the time Eli Lilly ($LLY) reported that solanezumab had failed both primary endpoints in a large Phase III study for Alzheimer's, most analysts had written it off as a near-certain loser. So when the pharma giant opted to tout analysis indicating its efficacy for patients with an earlier stage of the disease, Lilly managed to avoid the roasting that Pfizer and J&J had to endure for "bapi."
Not a total disaster? That's a win, reason some observers, who are eager to see which company makes it to the market with the first new Alzheimer's drug in years.
While there has been some speculation that regulators could be so desperate to approve some new treatment of Alzheimer's that solanezumab might skate to an approval, most rational thinkers expect the agency to lay out requirements for at least one more big trial. One positive outcome of all this: Investigators are turning their attention to high-risk populations or very early-stage patients, understanding that they have to treat the disease before it causes brain damage.
Secondary analysis aside, the enormously expensive pratfall underscored yet again that Eli Lilly has become an accomplished master when it comes to wasting its big R&D budget for neuroscience programs. To underscore that point, just days after the solanezumab failure Lilly scuttled its late-stage schizophrenia program for pomaglumetad methionil, also known as mGlu2/3 and once dubbed LY2140023. In a matter of weeks, Lilly wrote off 5 late-stage drugs.
None of it, though, has called into question CEO John Lechleiter's insistence that Lilly will rest its fate on its internal pipeline efforts. A ship like the U.S.S. Eli Lilly can evidently take a number of hits at the waterline without raising doubts about its course.
Dalcetrapib - Roche
What's a one-word definition for failure? Dalcetrapib. That rhymes with torcetrapib, which was Pfizer's colossal failure in the field. This time it was Roche's ($RHHBY) turn to take some heavy knocks for failing to register a win with a new drug that boosts good cholesterol, and visions of multibillion-dollar sales vanished. The good news: It didn't kill anyone or look harmful. The bad news: It didn't really help anyone, either.
Roche, normally quite sedate in buttoned-down Swiss fashion when it talks about pipeline programs, tended to loosen its tie and get downright giddy about the megablockbuster potential of this treatment. But at the end of the day there was nothing here at all. The clinical spotlight now is turning to PCSK9 inhibitors, a new class of drug that promises to do some radical rebalancing of cholesterol. But it's easy to find analysts who aren't excited.
TC-5214 - AstraZeneca
What list of top Phase III failures could ignore AstraZeneca ($AZN)?
Anti-depression drugs are notoriously difficult to develop. Investigators commonly mount a slate of Phase III studies in the hope that a couple of them deliver pay-dirt data. In AstraZeneca's case, four late-stage studies of TC-5214, partnered with Targacept ($TRGT), produced four flops.
That hurt, and it showed.
AstraZeneca had committed up to $1.24 billion to Targacept to get its hands on TC-5214. In the end the failure, one of a long string of setbacks in the clinic, would help force out CEO David Brennan and push the pharma giant to reboot its whole R&D effort. In Big Pharma, when you hit the patent cliff, you're only as good as your late-stage pipeline. And AstraZeneca's looked weak.
It's not all bad news. For AstraZeneca, there's a new virtual effort underway in neuroscience. R&D chief Martin Mackay has energetically hit the streets looking for buyouts and deals. And the new CEO at Astra halted a buyback of shares in a possible prelude to pulling off a major acquisition. But 5214's failure, coming on the heels of so many failures, has likely seriously damaged the hunt for new therapies to treat depression.