Drug development risks

A recent review of option models in drug development, co-authored by a biostatistician from AstraZeneca in Molndal, Sweden [14], suggests that there has up to now been a lack of appreciation among pharmaceutical executives of the value that statistics could bring to the decision making process. This review quantifies the value of information that could terminate unsuccessful projects early and assesses the time-risk trade-off. It proves that projects split... 

DiMasi JA. Risks in new drug development approval success rates for investigational drugs. Clin Pharmacol Ther 2001 69 297-307. 

There is no cure for AMD and the efficacy of most treatments is low. Newer drug developments show promise but no treatment can reverse damage that has already occurred.23 Early diagnosis is critical. High-risk patients need periodic eye examinations because some patients do not notice any changes, even when neovascularization has occurred.20... 

At the health care provider level, choices will be made among many therapeutic regimens that differ in effectiveness and cost. At the producer level, pharmaceutical companies must decide whether targeted drug development is economically feasible. Will there be a sufficient return on investment to justify the risks involved in pharmacogenomic research Will companies only pursue research and drug development for diseases for which there is... 

DiMasi,., "Risks, Regulations, and Rewards in New Drug Development in the United States," Regul. Toxicol. Pharmacol. 19, 228-235 (1994). 

The initiative to add mandated safety pharmacology studies to the drug development process is overdue in arriving. However, its actual implementation and the use of the resulting data in risk/benefit decision will take some time to be worked out. During the year 2001, many small companies were put in a difficult position when the... 

Pharmacogenetics provides a rational framework to minimize the uncertainty in outcome of drug therapy and clinical trials and thereby should significantly reduce the risk of drug toxicity. The reader is referred to the Internet sources in Table 20.1 for more details on pharmacogenetics and drug development. Potential improvements in patient inclusion criteria will be addressed later in this chapter. 

QT liability during drug development are important milestones but leave many questions unanswered for example, do false nondinical negatives with a significant clinical torsadogenic risk exist Are there reliable markers of the true torsadogenic potential of a new drug ... 

The potential of drugs to cause QT prolongation and the associated risk of cardio-toxicity remains an important issue in drug development. Although the advent of automated electrophysiological systems and other predinical screens has helped in early identification of hERG channel blockers, the outcome can be highly unsatisfactory. The process is wasteful and expensive and the development of potentially valuable compounds is halted. The wealth of information continually uncovered... 

The first edition1 of this book was published approximately 13 years ago. Its primary objective was to present an overview and a "roadmap" of the process of new drug discovery and development, particularly oriented to individuals or companies entering the pharmaceutical field. It was written by one of the authors (Smith), with no contributors, and drawn on Smith s experiences in the industry and field over the course of nearly 40 years. In the second edition, the scope of the first book has been expanded and technical details in the form of hard data have been included. In addition to the editors own commentary and contributions, the major part of the book is the result of contributions of experts in the industry. New chapters on risk assessment, international harmonization of drug development and regulation, dietary supplements, patent law, and entrepreneurial startup of a new pharmaceutical company have been added. Some of the important, basic operational aspects of drug discovery and development (e.g., organizational matters, staff requirements, pilot plant operations, etc.) are not repeated in this book but can be found in the first edition. 

DiMasi, J.A., Success rates for new drugs entering clinical testing in the United States, Clin. Pharmacol. Therap., 58,1-14,1995 DiMasi, J.A., Trends in drug development costs, times and risks. Drug Inform. /., 29, 375-384,1995. 

The two key elements of any biotech story are the importance of the medical need and the rationale for why this idea is likely to work when previous efforts have failed. While the time value of money should theoretically be important, given the long timelines for drug development, in practice estimates of successful drug valuations and technical risks usually overshadow the risk-free time cost of money. 

These plans envision assembling a portfolio of in-licensed drug candidates for which collective development risk is deemed to be relatively low. The idea is to in-license molecules that either are too specialized (small market potential) for large pharma or are not visible to their radar because they come from places like Eastern Europe. These stories are favorites of professional investors, because rNPVs can be calculated with relatively low development risk on the basis of demonstrated clinical utility and/or pipeline diversity. Examples include Dura Pharmaceuticals, who marketed prescription products that treat infectious and respiratory diseases, and Gilead who marketed antiviral nucleotides discovered in the Czech Republic. 

A question I am consistently asked about funding a biotech company is, "What kind of investor can afford to accept the extremely high technical risk of drug development while waiting 10 to 15 years for a product launch "... 

---