Biotech Startups Have the Answers to Big Pharma's Problems
Pharma isn't what it used to be. Two major companies lost about 40% of their stocks' values in the past decade, when the industry shed 300,000 jobs.
Some analysts, including former pharmaceutical executive Bernard Munos, think more jobs need to be lost. Munos, now an analyst, thinks pharma has too much effort in research and development. In Munos' opinion, pharmaceutical companies should concentrate on blockbuster drugs, closing many of their laboratories to do so. In addition, big pharma should outsource research and development to small biotech startups that can explore the crazier ideas.
In a recent interview with Forbes magazine, Munos put it this way: "You cannot script innovation. You cannot boil it down to a code of best practices. Because it is unpredictable and the opportunities in science do not match the opportunities in markets."
Munos is not alone. Corey Goodman, a former pharma executive, is one of the founders of a biotech startup with anti-cancer drugs in clinical trials. Exciting data about his company's drug cabozantinib was presented at the annual meeting of the American Society of Clinical Oncologists in June and just last week at the American Association for Cancer Research meeting on molecular targets. Cabozanitinib is a dual c-Met and vascular endothelial growth factor receptor, or VEGFR, inhibitor. Big pharma has several VEGFR inhibitors on the market and in clinical trials, notably Sutent, Votrient and axitinib. No big pharma company is developing a c-Met inhibitor, although this type of compound causes cancer cells to die. Cabozantinib is just one example of the type of outside-the-box approach a biotech startup might take for cancer therapy, the approach that would be rejected by big pharma.
Munos is not surprised that true innovation comes from biotech startups and not from big pharma. As he sees it, big pharma expected innovation without having the means to measure innovation. Without new sources of novel ideas, big pharma is liable to collapse. When the cost to approve a new drug approaches $10 billion, it's definitely time to regroup.
Enter the small biotech companies. Often they are founded with specific goals in mind: find a specific treatment to cure or ameliorate a given disease. They have the agility to change targets rapidly. If c-Met isn't a good target for renal cell cancer, maybe fibroblast growth factor is. Whichever target is ultimately validated, big pharma will be ready to step up and underwrite the clinical trials to obtain approval.
