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Financing Cancer Battle Bruised By Government-Industry-Academia Disconnect

Raising venture capital for local life sciences companies continues to be a challenge, said Joe Panetta, president and chief executive officer of Biocom, the local industry association representing more than 550 member companies in Southern California.

“San Diego doesn’t have the depth of venture capital investment that the Bay Area or Boston do,” he said. “These cities have more mature biotech industries, with more established companies, and folks who were involved in early development of those companies were able to attract venture capital.”

Duane Roth, CEO of Connect, which fosters entrepreneurship in technology and life sciences, remains upbeat.

“I often tell people who are fighting so hard to fund research to focus on making it profitable,” said Roth. “There is opportunity. Decades ago, there was a lack of science, and there wasn’t interest in the market to invest in. Venture capitalists never viewed it as a way to get a return. San Diego changed that. Everyone is willing to invest in this now. Society is supporting this, and we will have remarkable innovations.”

Ivor Royston, founding managing partner of Forward Ventures, a venture capital firm that specializes in oncology, considers cancer therapies to be a prime place to invest. Because of the urgency of the disease, hundreds, rather than thousands, of patients need to be tested. And, he added, the Food and Drug Administration is more willing to expedite what is usually an expensive and time-consuming process to bring a drug to market , amounting to $1 billion and 12 years.

“The FDA hurdles are less, because of the huge unmet need,” he said. “In the venture world, every company that takes a drug to market will be spending $100 million over five to 10 years. Most is done by huge syndicates and involves multiple rounds of financing , $30 million or $40 million a round. When drugs are approved, they get the return on their investment. All I have to do is choose the right drug.”

But, Royston admitted that there are “huge risks.”

“I am not always going to be right,” said the man who was inducted into the San Diego Entrepreneur Hall of Fame in 2006, and appointed by President Bill Clinton in 1997 to a six-year term on the National Cancer Advisory Board.

The bar has been raised on cancer treatments, said Faheem Hasnain, senior vice president of the oncology rheumatology strategic business unit at Biogen Idec’s San Diego research center.

“Rituxan is an incredible drug, and we have been able to demonstrate a real impact in lymphoma,” said Hasnain. “As more and more drugs come out, and are able to improve survival, expectations for the next drugs go up. With the kind of expectations that the FDA has, the onus is on us to really design our clinical trials well. There are no free lunches here.

“The FDA is tightening up expectations on oncology development. We are starting to see now an incremental burden of proof that we are obligated to bring to the table.”

But, for cancer types that continue to evade treatment, it’s a different story, said Hasnain.

“Where there is significant unmet needs, with nothing having impact on a disease, such as pancreatic cancer, the FDA will be willing to work with the industry in the development of meaningful drugs. In the health care system, everyone understands that we have to demonstrate value, and bring drugs to the market that have real impact for patients. The bar has been raised.”


Bridging The Gap

Timing is everything, Hasnain observed.

“The complexion is changing from the venture capital perspective,” he said. “The model seems to be evolving, and they are caught between a rock and a hard place. They don’t want to be too early. You need to be pretty confident about the science you are pursuing.”

Biotech companies have their own perspective, he said.

“We are trying to balance our asset base by making sure we are looking at pathways that have been validated, and are more cutting edge,” he said. “We balance our portfolio on that perspective, and we try to place our bets accordingly. We are in the business of developing cancer therapeutics, and also in the business of managing risk. You have to bring 10 products to the clinic to see one come to market. To play this game, you have to be disciplined and smart about using biology to design your clinical trial program.”

A major gap continues to exist between the funding of research institutions and late-stage drug development, said Dennis A. Carson, director of UC San Diego’s Rebecca and John Moores Cancer Center, and professor of medicine at UCSD School of Medicine.

Carson, an associate dean for cancer affairs and holder of the Chugai Pharmaceutical Chair in cancer, is trying to enlist all of the stakeholders , the biotech industry, the government and academia , in solving a problem that he says is “hurting American competitiveness and patients.”

“Government can’t pay for drug development, and industries are on a short leash, and can’t afford any failures,” said Carson. “We both have to put more money into the process, but make the process more efficient.”

He also is pushing for more cooperation by the FDA and the National Institutes of Health, in trying new approaches in the development of drugs.

“The way that clinical trials are done follow a traditional pathway that has been used for 50 years,” he said. “Many blockbuster drugs have been developed that way. But there are not that many coming along now.”

Back in the ’80s, Carson developed a new agent, now marketed as Leustatin, for the treatment of a form of leukemia. The drug, he said, has resulted in long-term remissions, and also is effective in treating other lymphoid cancers, multiple sclerosis and psoriasis.

But that was then.

“It is extremely difficult to do what I did, nowadays,” he said. “I made the drug myself, I designed the trial myself. You can’t do this nowadays, because there are so many hoops to go through and the costs are incredible. There is more paperwork in everything now, because of litigation, and more and more regulations.”

The reality of the market today, said Carson, is that drugs are increasingly being targeted to smaller groups of patients, but the old ways of doing business still persist.

“The FDA needs to lower the cost,” said Carson. “The higher the cost, the less will be done.”

While he commends the agency for fast-tracking some cancer drugs, Carson noted that it usually involves treatments for desperately ill patients.

“Patients who are dying should try anything they can,” said Carson. “But I don’t think these types of agents solve the cancer problem. If you want to cure cancer, you need the treatments to be done earlier and be more targeted, involving new diagnostics, and treating patients who are not dying quickly.”

Another problem to be tackled, said Carson, is the patent process for new drugs, where everyone is vying for property rights.

“Ultimately, the market is chopped up into 15 pieces,” he said. “This constant chopping up, into little divisions, and the cost associated with it, makes it difficult to get a decent project team to solve issues. There are so many disincentives to getting stakeholders to work together. If you have a drug with potential sales, and 20 patents, it will be worth much less, and lawyers have to negotiate all of that, and, maybe, government needs to make regulations on each aspect of that.”

At the time of the interview, Carson was planning a trip to Washington, D.C., to meet with the head of the National Cancer Institute to discuss solutions.

“Everyone is aware of the problem,” he said. “It’s not that any one person is to blame, like the devil, it’s a combination of a lot of things. We need an alliance of government, research institutions and the industry, and to come up with something that is different than what has been done in the past, with more sharing of information. But, it’s not like a fire in the theater. We will eventually solve it, but it’s not going to happen overnight.”


No Magic Bullet

With all the major breakthroughs in cancer drugs, San Diego scientists agree that there is no magic bullet.

“Cure is a big word,” said Zuleima Aguilar, senior director of oncology at Pfizer La Jolla. “To say something is cured, no therapy can say that, but these drugs are more effective than before.”

The modern approach to treating cancer has shifted, said Royston of Forward Ventures.

“The goal now of modern cancer therapy and drugs’ development is to make cancer a chronic disease, one that you can live with without killing you,” said Royston. “If you can do that, you don’t have to wipe out every last cell. It is too difficult to find a magic bullet to kill cancer without killing the normal cells in the body.”

Unlike other diseases, cancer continues to have its own mystique, said Roth of Connect.

“We fear that disease, more so than heart disease,” he observed. “With heart disease, you either survive and are back on your feet tomorrow, or you die. Cancer is a painful, long-term thing, painful for the family, going through treatment, losing your hair and weight. And you can get a recurrence. It is an emotional disease, and society is going to pay today for very expensive research that invites more research. There is so much activity now.”

But trying to sell the general public on anything short of a total cure for cancer can be a challenge, said Kristiina Vuori, director of the NCI Cancer Center at Burnham Institute for Medical Research in San Diego.

“I was giving a tour to lay people at Burnham, and discussing making cancer a chronic disease, like diabetes,” she said. “At the end of the tour, someone came to me and said, ‘Don’t you want to cure this disease? Why do you want to make it chronic, where people will suffer forever?’ It can have the wrong connotation. It’s better to say that we are trying to make it a manageable disease. Cancer may not totally go away, but it can be something to live with, rather than die from.”

Progress is being made, said Hasnain of Biogen Idec.

“Hopefully, we can get down the road to a cure,” he said. “There are some cancers where we have made real progress, and extended survival quite significantly. You start looking at a cure after a survival rate of five years.”

Even with all the new drugs coming on line, Dr. Albert Deisseroth, president and CEO of the Sidney Kimmel Cancer Center in San Diego, doesn’t expect chemotherapy to be replaced anytime soon.

“Chemo is the foundation and it is the workhorse,” he said. “It will get easier and easier to go through, but for the next 25 years, there will be a combination of surgery, chemo, and radiation and vaccines. There is always a percentage of patients who are resistant to targeted drugs, so you need a cocktail. Because of the way cancer behaves, cells might be resistant to one approach, but if you use different types of therapy together, you have the greatest chance of killing different types of cancers at once.”


Hub Of Discovery

While the development of cancer drugs is booming here, the region still can do a better job of delivering cancer treatments, said Royston.

“We have some very good cancer delivery systems , UCSD, Scripps and Sharp,” he said. “But there are so many patients with cancer who leave San Diego and go to other places, such as UCLA. San Diego can do more to attract top-flight clinicians to deliver cancer treatments.”

Carrying the banner is Biocom’s Joe Panetta.

“When I talk to companies close to the size of Pfizer, that don’t have a presence here, they haven’t taken the time to find out about San Diego,” he said. “It’s one of the challenges of San Diego, especially with the major pharmaceutical companies located on the East Coast and in Europe. San Diego for them is literally on the other side of the world.”

But, he added, “It’s one step at a time.”

For instance, Panetta said he has an initiative going in Philadelphia, meeting with pharmaceutical and economic development representatives with the goal of attracting companies to San Diego.

“They want to see that as well,” he said.

Meanwhile, those scientists who are here sound content.

“I couldn’t be happier,” said Zuleima. “This is a very attractive place to develop drugs, because of all the intellectual stimulation we can get from all the scientific institutions around here. In that regard, we are very unique. There are so many great scientists around that you can interact with in person.”

Deisseroth agreed.

“We feel very happy to be in San Diego, because it is such an empowering environment, with all of our neighbors , Burnham and Scripps and UCSD,” he said. “We collaborate with all of them, and it creates a tremendous synergism. There is no where in the world like San Diego.”

Inder M. Verma, molecular biology professor at the Salk Institute, added, “San Diego is one of the greatest biomedical hubs in the world. Everything is here.”

For his part, Hasnain is optimistic about prospects for the future.

“We are going to see an explosion,” he predicted. “There is a lot of work in targeted therapies being done, and I don’t think we’ve seen anything yet. We are really on the edge of a breakthrough.”

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