Biopharma Investing In Better Success Rates Via AI, Data And New Modalities

Biopharma executives and investors gathered in San Diego on Feb. 28 and March 1 to talk about finding and funding innovation with a focus on novel technology and artificial intelligence that can improve drug discovery and development success rates.

Biopharmaceutical company business development executives speaking at Biocom's recent Global Life Science Partnering Conference in San Diego are all looking for the same thing: technology that can analyze data or approach a therapeutic target in a way that increases chances of drug development success.

That could come in the form of artificial intelligence and machine learning that can determine the viability of novel therapeutic targets and drug candidates, or new drug modalities that hit targets previously viewed as difficult or impossible to drug. The Feb. 28 and March 1 partnering meeting sponsored by Biocom, a California life science industry organization, gave small and mid-sized firms with technologies in these and other areas a chance to meet with investors and potential partners.

Estimates vary, but it's generally accepted that it takes billions of dollars to develop a single commercial biopharma product. Taking into consideration the cumulative research and development costs for an approved drug as well as the R&D time and capital invested in programs that eventually fail, the success rate is astoundingly low. That's why investors and biopharma companies are putting more money into platforms that have tried to reduce risk or that could screen for success.

"As a scouting and innovation function, we really are customer-focused on what our researchers are looking for and what our development groups are looking for. There is a lot of emerging interest in artificial intelligence, machine learning and machine reasoning, and how these approaches can help you with target discovery or working through toxicity issues or lead identification," Daiichi Sankyo Co. Ltd. Senior Vice President, External Scientific Affairs Jeff Warmke said during a March 1 panel discussion about what to expect in business development in 2018 and beyond. 

As a result, in the next year, Daiichi will be doing a lot of pilot studies in the areas of AI and machine learning to help enhance the company's discovery efforts. (Also see "Preparing Emerging Biotechs For The Best Deals – Insider Insights" - Scrip, 22 Feb, 2018.)

New Modalities Garner Investment

Bayer AG Vice President Chris Haskell confirmed that data science for drug discovery and emerging technologies are important areas for the big pharma's business development. Haskell, head of Bayer's West Coast Innovation Center in San Francisco, noted that the company also is placing significant long-term bets on companies with new drug modalities that are potentially curative, including the $525m that Bayer has invested in Casebia Therapeutics and BlueRock Therapeutics.

"Our systems and internal processes don't allow for the type of creativity and long-range risk-taking that's going to be necessary to solve the challenges to actually get gene editing into patients," Haskell said, noting that Bayer will incorporate Casebia and BlueRock therapeutic candidates into its pipeline as the technologies mature.

Casebia is a gene-editing company that emerged from Bayer's joint venture with CRISPR Therapeutics AG, which the partners set up with $300m in initial financing. (Also see "Bayer And CRISPR Form Cutting Edge Gene Editing JV" - Scrip, 22 Dec, 2015.) BlueRock is developing induced pluripotent stem cell-derived therapies for cardiovascular and neuroscience indications. (Also see "Bayer/Versant Launch New Stem Cell Company With Massive Cash Injection" - Scrip, 13 Dec, 2016.)

"The pivotal theme is really going after what is considered undrugable, until now," Sigilon Therapeutics Chief Scientific Officer David Moller said during the business development panel.

Moller noted that many new companies are being formed in this space with a lot of new modalities going after both known and new targets – technologies such as targeted protein degradation, the delivery of RNA silencing (siRNA) to places other than the liver, CRISPR gene editing, gene therapy and synthetic biology. "You already are seeing that most pharma companies are beginning to dip their toes in the water here," Moller said.

Otsuka Holdings Co. Ltd. Senior Vice President of Business Development Ron Newbold noted that the Japanese company is one of the few major pharma firms focusing on neuroscience, so it is looking for innovation in that area. However, Newbold also noted that investing in the US in general is a big priority, since this is where a lot of health care innovation is occurring and where pricing for novel products generally rewards the investment made in new technology.

Two years ago, all of the business development executives on the Biocom stage would've said they were looking for immuno-oncology assets, noted Avi Spier, business development and licensing director for the Novartis Institutes for BioMedical Research Inc. (NIBR). Now, Novartis AG's search for new technology is shifting from understanding the role of the immune system in cancer to immunology more generally in a variety of diseases.

"New technologies that open up new areas of drug discovery, that's what we're interested in," Spier said.

Dealing With Disruptors

GlaxoSmithKline PLC Vice President of Alliance Management, Business Development Strategy and Operations Bill Mendez said he was intrigued by Roche's surprising $1.9bn acquisition of the health care data company Flatiron Health Inc., but viewed the transaction giving Roche access to real-world evidence as a smart move that could help get new drugs approved and reimbursed.

"Data is critical. The more data you have, the better chance you have of figuring out: can you actually get the drug approved," Mendez said. "I think [Roche's Flatiron deal] is an indication of where the industry's going on a broader scale."

When the business development panel was asked what their companies are doing to work with "disruptors" like [Amazon.com Inc.], Apple and Google that are moving into health care and looking for inroads in the biopharma industry, Mendez noted GSK's partnership with Google. (Also see "Amazon-Express Scripts Partnership? PBM Sees Opportunity In Uninsured Market" - Scrip, 27 Oct, 2017.)

The UK-based big pharma and Google's life science investment arm announced a joint venture in 2016 to invest in bioelectronics. (Also see "GSK And Google To Invest £540m In UK-Headquartered Bioelectronics JV" - Scrip, 1 Aug, 2016.) Mendez said the partners see a potentially disruptive opportunity in the area of implantable devices.

"Where in the past it was Google against us … they realized, I think, 'Wait a minute, we need to work with some of the big players to actually do something'," he said. "It's going to be challenging for anybody to get into the health care space if they don't truly respect and understand it … you do need to understand it's not as easy as just launching a new app."

Otsuka has a new division devoted to digital health that houses its newly approved digital-pill product Abilify MyCite for schizophrenia that was developed in partnership with Proteus Digital Health Inc. (Also see "FDA Approves First Digital Pill: Otsuka/Proteus' Abilify MyCite" - Scrip, 14 Nov, 2017.) "The hope is that this technology can be applied in a range of areas," Newbold said.

Bayer's Haskell noted that if pharma companies "don't evolve in ways that you can take advantage of technologies, you are going to get left behind." He added that any organization has to evaluate "where are we really good and where are the barriers to entry for others. That's where you can maintain your core competencies and then work around that."