To make matters more challenging, the major drug developers are presented with an even larger pool of potential partners. With less competition in partnering discussions, these drug developers have their choice of companies. The result of this changing landscape is that it is no longer enough for a start-up biotech to simply be first in class or have a decent compound. Rather the company must view itself and its programs from the perspective of the major drug developer. From this perspective, it is easier to see how to develop programs that will bring potential partners to the table for discussions.  

 

Monumental challenges in R&D

 

Small biotech companies face monumental challenges in the R&D arena. It is costly. It is complex. It is uncertain. One must find that elusive, perfect balance between cutting-edge science and commercialization potential. Large companies have the luxury of fielding multiple programs to find one blockbuster, but start-ups live and die by one or two programs they have chosen to work on.   

 

A number of start-ups are based on new discoveries or novel insights into biological pathways. There are also start-ups that practice the art of being “fast-followers.”  Byetta is an example of new discovery. Lorcaserin is an example of novel insight, while Alogliptin is an example of a fast follower. These demonstrate that success can come from all arenas.

 

Whichever route a company takes, it is important to demonstrate added benefit to existing treatment paradigm in multiple ways, such as safety, compliance and efficacy. Many biotech companies fail because they develop products with minimal market needs.  

 

Where the market is headed  

 

When viewing programs from the perspective of a major drug developer, it is important to evaluate where the market is headed. This is a key step for these companies.

 

Understanding the competitive level and need for new therapeutics in the future plays a major role in deciding which programs to pursue. This can be understood by looking at the potential cost-benefit and global disease distribution for a product candidate.  

 

Other conditions, such as whether a disease would be treated by a primary care physician or a specialist, may also influence the decision of whether or not a program receives resources. When small biotechs look at a program in the same manner, the quality of target selection with respect to commercialization potential will also improve.  

 

Understanding the difference between this approach and simply guessing which major drug developers will be interested in new products makes a big difference in the early stages of target selection.  

 

Think programs, not compounds  

 

A growing trend is to develop a single candidate for partnership instead of programs with multiple candidates. However, major drug developers understand the value in back-up compounds, making them important in partnership discussions.  

 

These back-up compounds should be structurally different from the lead compound in order to become valuable assets for partnership discussions. The back-up being structurally different mitigates the risk that both candidates will suffer from the same compound specific stumbling block. Having back-up candidates will allow the company to continue with full development with only minor delays should the lead candidate succumb.

 

In addition to being structurally different, the back-ups should also only be behind the lead compound by a short amount of time in order to have the most value.  

 

‘Best-in-class’  

 

As competition has become fierce among biotechs, the only way to stand out is by demonstrating best-in-class potential early in the drug development process. This is very attractive to potential partners who have a focus on eventual commercialization of the product.   

 

The issues described above highlight many of the requirements sought by potential partners in seeing a program as “best-in-class.” The job of the start-up in accomplishing these endpoints is complicated by the fact that most have limited capital resources at their disposal. This fact makes it especially crucial for start-up companies to have high hurdles at every decision point, ensuring that only the best and most promising product candidates advance in development.  

 

For example, a company may be pursuing a candidate that is likely to have toxicology problems. The first inclination is often to wait on the toxicology assays or not push the dose high enough, hoping that there will be enough of a therapeutic window to navigate its development. Major drug developers will see through these lacking studies or narrow windows as potential liabilities in full development. This provides them an excuse to walk away from discussions.   

 

The end result is that the biotech has squandered precious capital. Killing product candidates early before large capital investments may seem counterintuitive, but will pay off once a program is ready for partnership.

 

Have an ‘inside’ track

 

Having an understanding of how major drug developers in general think is important, but every company is different. As a result, it is important to have an “internal champion” at a company. After all, deals built without an understanding of the internal operations at a company do not tend to work out in the end. These major drug developers are constantly undergoing considerable changes, including mergers and reorganizations, which may result in challenges during partnering discussions.

 
Having an internal champion at the company to provide updates on changes and delays can be very valuable. This person can also help to move things along when it seems that discussions have stalled. The champion may not necessarily be in a business development role, more likely to be in other functions such as discovery or commercial operations. When there is not an internal champion involved in the process, discussions are often abandoned too early.  

 

In the constantly changing climate of this industry, it is more important than ever that small biotech companies see themselves from the perspective of major drug developers. Understanding every aspect of a program—from target selection through market potential—from this perspective will result in the best potential deals for both parties.  

 

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Dr. Peppi Prasit is chief scientific officer and a member of Amira Pharmaceuticals' board of directors. He has more than 20 years of experience in pharmaceutical research and management, most recently serving in various positions with Merck. Prasit has led and/or contributed to research resulting in more than 65 published papers exploring various elements of drug discovery and holds more than 30 granted patents. He received his Ph.D. in organic chemistry from Victoria University of Wellington in New Zealand and served as a post-doctoral fellow in organic and organometallic chemistry at Princeton University in New Jersey.

  

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Dr. Hari Kumar is chief business officer at Amira Pharmaceuticals. Kumar has almost 20 years of Big Pharma experience, including 17 years at Hoffmann-La Roche. In 1996, Hari moved to Eisai Ltd, where he served as the company’s European marketing director before returning to Roche in 1999, where he was instrumental in securing partnerships with Isotechnika, Biotie, Biocryst and Actellion. Kumar trained as an immunologist at University College London, where he completed his Ph.D. under the supervision of Professor N.A. Mitchison. Kumar then completed post-doctoral fellowships at Tufts New England Medical Center in Boston and at the Marie Curie Cancer Research Centre in the United Kingdom.