Biotechs Go Back to the Future by Re-Innovating Old Drugs

Xconomy San Diego — 

Biotechnology start-ups have long been seen as fearless innovators, embracing experimental technologies, like gene therapy, that big pharmaceutical companies won’t touch. But the news flow from San Diego this summer suggests the industry may have become a bit more cautious. More and more companies, it seems, are focused on reviving or repurposing older drugs – and avoiding the risks of inventing a medicine entirely from scratch.

Take Cadence Pharmaceuticals, (NASDAQ: CADX) which is developing an intravenous pain reliever containing acetaminophen, the active ingredient found in Tylenol. Another San Diego company, Somaxon Pharmaceuticals (NASDAQ:  SOMX), is working on a sleeping pill that contains the old antidepressant drug doxepin.

Then there is Avanir Pharmaceuticals (NASDAQ: AVNR), located just across the San Diego border in the Orange County community of Aliso Viejo. It hopes to market a tablet for a side effect of ALS and Parkinson’s disease that contains two existing drugs – dextromethorphan, an ingredient in over-the-counter cough medication, and quinidine, an old drug for treating irregular heart rhythms.

Working on existing drugs has some obvious advantages. Because the drugs have already been approved, companies have access to mounds of data to guide their development programs. In some cases, they may be able to forgo some pre-clinical tests or even clinical tests.

“You are dealing with known chemical entities. So from a baseline perspective, you are ahead of the curve. You do have a sense of how the compounds work, and a large amount of data,” Avanir CEO Keith Katkin tells me.

Getting a running start in this way can save start-ups many thousands or millions of dollars in research and development costs—and reduce the risk of failure. It’s a compelling strategy, particularly in an economy that has been brutal for more traditional biotechs. Over the last few months, we’ve seen La Jolla Pharmaceuticals (NASDAQ: LJPC) wind down its operations, and TorreyPines Therapeutics (NASDAQ: TPTX) announce a merger agreement to avoid a similar fate. The troubles aren’t confined to San Diego; to the north in Seattle, gene therapy pioneer Targeted Genetics (NASDAQ: TGEN) is fighting for survival.

But if the chances of losing big are lower, so are the odds of winning big.

A recycled drug isn’t likely to become a multibillion-dollar blockbuster like Genentech’s Avastin, a cancer medicine invented entirely in-house. That said, few drugs are as successful as Avastin. And the revenue potential of some reformulated drugs isn’t shabby; some analysts think Cadence’s intravenous acetaminophen could bring in $500 million a year.

So retooled drugs may become successful products – but are they innovative ones? It’s an important question to Xconomy, and I asked it of Eckard Weber, a venture … Next Page »

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3 responses to “Biotechs Go Back to the Future by Re-Innovating Old Drugs”

  1. Michael A. Swit says:

    Intereesting article. But, none of this is really news. These development efforts, especially Avanir and Somaxon, have been in the works for years.