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QBD 2014

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Saco de Visser

on 18 February 2014

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Transcript of QBD 2014

Real Options Value Estimation
Take risk into consideration
Question based drug development
Does that work for clinical development?
Determine the possible outcomes

Determine chance the outcome occurs

Calculate value of all possible outcomes

-> Risk adjusted project value!
Transposed from oil industry
Phase I: Researchers test a new drug or treatment in a small group of people for the first time to evaluate its safety, determine a safe dosage range, and identify side effects.

Phase II: The drug or treatment is given to a larger group of people to see if it is effective and to further evaluate its safety.

Phase III: The drug or treatment is given to large groups of people to confirm its effectiveness, monitor side effects, compare it to commonly used treatments, and collect information that will allow the drug or treatment to be used safely.

Phase IV: Studies are done after the drug or treatment has been marketed to gather information on the drug's effect in various populations and any side effects associated with long-term use.
Answering questions: Efficacious & Safe
Hiding subquestions
Checked by regulators
New questions during development
Monitor questions; not phases!
Phases
Drug development is...
Every year 200.000 compounds are examined on potential medicinal properties

About 20 new drugs are introduced every year

It takes an average of 12-15 years to discover and develop a new medicine

The average cost of bringing one new medicine to market in 2003 was estimated at $802 million (currently supposedly >$1,2 B).
Linear Drug Development -the "facts"
Wall street journal 18/4/2002
1. Lipitor
Sales: $11.4 billion

Generic name: atorvastan

Pfizer's cholesterol drug Lipitor remained the top selling branded drug in 2010, despite generic competition and three recalls.

Lipitor is an HMG-CoA reductase inhibitor, or statin. It lowers the level of cholesterol and triglycerides in the blood.

2. Plavix
Sales: $9.6 billion

Generic name: clopidogrel bisulfate

Plavix, a blood clot prevention medication, is marketed by Bristol-Myers Squibb and Sanofi-Aventis. Plavix was to lose its U.S. market protection in May 2012 but in January 2010, the FDA extended Bristol-Myers's patent for six additional months.

3. Enbrel
Sales: $8.4 billion

Generic name: etanercept

Enbrel is a biologic medication that blocks a protein called tumor necrosis factor. Enbrel is prescribed for inflammatory diseases including rheumatoid arthritis), plaque psoriasis, juvenile idiopathic arthritis and ankylosing spondylitis.

Enbrel, marketed by Amgen, will be the first biologic drug to lose its patent.
Risk-adjustment seems appropriate
Frequently used in other high-risk industries

Comparing different projects in advance
Pipeline valuation

Not useful for progress monitoring
Does not help in dealing with risk
No information about the scientific content of the phases


No incorporation of the value of knowledge on relevant scientific issues
Examples
Overall chance of success: 30%
Overall costs M€ 175
Project value estimation using real options
Does the biologically active compound/active metabolites reach the site of action?
Does the compound cause its intended pharmacological/functional effect(s)?
Does the compound have beneficial effects on the disease or its clinical pathophysiology?
What is the therapeutic window?
How do the sources of variability in drug response in the target population affect the development of the product?
Five questions - 5! Possibilities

Optimal order defined by:
cost of answering question
probability of successful answer

It’s all about optimising success chances/costs combinations

You can address different questions in early phase!
(see also FDA guideline on exploratory IND studies)

Use ‘real’ real options (questions vs phases)

New factor introduced: Sequence!

5 questions in random order = 120 different sequences

Analysis yields optimal path
M€ 24 difference in project value for two 1st choices

Same overall costs, payoff and success chance!

Your choice matters!
Example 1: Biomarker literature evaluation
Net present value

Introduces additional costs without direct benefit for investigational compounds
Consumes valuable time

NPV project value
DECREASE
Example 1: Biomarker literature evaluation
Question based development

Selection of adequate methods increases chance of success
Elimination of inadequate methods increases chance of success
Knowledge on biomarker has value!
(eg 1% increase in ‘pharmacology’ M€ 0.8)

QBD project value

INCREASE
Example 2: Developing new formulation
Retrospective actual development rilmenidine

Introduced on (small) market but needed improved SR formulation

Priority list:
Population
Site
Pharmacology
Window
Clinical
Example 2: Developing new formulation
Optimal development

Different if analyzed upfront

Priority list:
Window
Clinical
Population
Site
Pharmacology

No effect if successfully developed
Different risk profile!!
Example 3: Bridging studies with Japan
New oral contraceptive drug

Early bridging scenario is considered

3 options;

1. Early bridging study: two ethnic groups are ‘similar’ (probability estimated to be 60%)
2. Early bridging study: two ethnic groups are ‘different’. Drug is developed in parallel in the two groups (probability estimated to be 30%)
3. the drug is developed in parallel in the two groups
Focus on ‘population’
Example 3: Bridging studies with Japan
Sensible to perform bridging study

Each drug has unique set of probabilities and costs

What is the probability of success and costs for ‘clinical’ in this case?

This case: ‘clinical’ outweighs ‘population’!

Development was stopped because low probability of success on clinical question
Example 4: Market advantage
Additional phase I study
GABAa selective partial agonist
Select less sedative dose


Net present value

Introduces additional costs
Consumes valuable time

NPV project value
DECREASE
Example 4: Market advantage
Question based development

Additional costs are introduced
eg M€ 2 increase

Success probabilities are improved
eg 1% increase in ‘pharmacology’, ‘site’ and ‘window’

QBD project value

INCREASE
M€ 2.2
MT203 Pilot
Agree on overall baseline values
Same overall success chance (12%)
Same overall development costs (M€ 90)
Gross Profit scenario III (M€ 8417)

Together discuss the relevant development questions and success probabilities
Together discuss the associated costs distribution for adequate answering

Fixed overall baseline values!

Define critical questions and associated costs
Business case scenario III has a positive risk adjusted project value

Additional prioritisation of questions on critical path can yield additional value (improved risk profile)

Additional R&D investments are justified if it improves PoS of relevant questions

Explore possible in vitro endotoxin inflammation challenge/proliferation study
Indication of EC50 of MT203 in different RA populations
Indication of EC50 of MT203 relative to relevant anti-TNF

Combine scheduled Ib and bridging study and DRF to extended DRF (and POC) in relevant population
Adaptive dosing design guided by biological response
Sc panel addition of relevant dose to compare with iv data (from First-in-Human study and DRF)
Explore possibility to end with MD panel with positive control (TNF Ab) and placebo
Include functional infection risk assay
No issue IF YOU SUCCEED

Does not alter intrinsic compound development risks

It helps you gain insight in what your priority list should be

Sometimes additional studies can add value to drug development!

It can help you choose between development strategies

Chance/Costs estimation determines optimal development strategy

QBD better incorporates value of knowledge

QBD better incorporates true risks of innovative drug development

Knowledge (not sequence) can and should be valued!!
MT203 Pilot
Question Based Drug Development
Scenario I:
DMARDs failures
Gross profit= M€ 4804
R&D costs= M€ 90 / International Marketing P&R M€ 875
NPV= M€ 93,29

Scenario II:
TNFs failures
Gross profit= M€ 3612
R&D costs= M€ 90 / International Marketing P&R M€ 875
NPV= M€ 15,21

Scenario III:
DMARDs and TNFs failures
Gross profit= M€ 8417
R&D costs= M€ 90 / International Marketing P&R M€ 897
NPV= M€ 376,58
Scenario I:
DMARDs failures
Gross profit= M€ 4804
R&D costs= M€ 90 / International Marketing P&R M€ 875
NPV= M€ 93,29
RISK ADJUSTED: M€ -26,26

Scenario II:
TNFs failures
Gross profit= M€ 3612
R&D costs= M€ 90 / International Marketing P&R M€ 875
NPV= M€ 15,21
RISK ADJUSTED: M€ -36,28

Scenario III:
DMARDs and TNFs failures
Gross profit= M€ 8417
R&D costs= M€ 90 / International Marketing P&R M€ 897
NPV= M€ 376,58
RISK ADJUSTED:
M€ 10,10
QBD Project value
M€ 11,84
(17% vs linear)
Conclusions/recommendations
Combined study and in vitro population study will not be cheap (~5M€) but:
Current budget Ib study + iv-sc bridging study = M€ 2,77
Current budget Phase II DRF (including POC) = M€ 14,10
Time gain?
Impact on PoS of critical path questions?
Scheduled meeting relevant CPT members with Leiden experts at CHDR
Available methodology and experience
Feasibility
Cost quotations
Timing
Re-evaluate critical path after study results are available (PoS and costs change with new insights!)
It’s all about optimising success chances/costs combinations!
Think and discuss how you need to prioritise questions
Further reading:

Download thesis at www.chdr.nl
Clin pharmacokinet 2008;47(6):373-381
Nat Rev Drug Discov. 2010 Nov;9(11):856-65
Full transcript