Going it all alone
Ariad Pharmaceuticals’ CEO Harvey Berger is not making the rounds with press to extol the virtues of external collaboration or open innovation. Instead, Berger is promoting a strategy that keeps all drug discovery, development and global commercialisation activities internal, within company walls. This DIY approach to producing innovative cancer drugs bucks the trend toward virtual companies in the biotech space, or deal-making specialty pharmas scanning the candidate pool for something to spruce up and flip in the market. Berger says the basic model originated with Genentech, and is “really the only model at the end of the day that gives you the ability to build a great sustainable business…everything else is a step along the way”.
In 2010, Ariad licensed ridaforolimus, a cancer drug it discovered, to Merck, but regulators determined (FDA last summer and EMA last November) that a mere three additional weeks of progression-free survival, paired with substantial side effects, wasn’t a strong enough case for approval. Going it alone, however, Ariad last December picked up an FDA approval for a different drug, Iclusig (ponatinib) – a small molecule therapy indicated for two rare forms of leukemia. EMA approved Iclusig in June, and submissions are planned for Australia, Canada and Japan in the coming months.
The drug, Ariad’s first product to reach the market, is off to an impressive start. In its first quarter on the market, Iclusig – priced at $115,000 for a year of treatment – beat Wall Street estimates with $6.4 million in net sales.
Berger attributes the success so far to the commercial group they put in place, a group, he says, was without question entirely designed, organised and structured for the launch of Iclusig. “Every member of the sales team wakes up every single morning thinking about how to make a difference in the lives of CML patients with Iclusig,” Berger says. “There’s no dilution of their efforts among multiple products or types of uses, and so I think intrinsic to the structure we put in place was the model for success, and the reason why building a dedicated commercial organisation to sell Iclusig worldwide, first in the US and now in Europe – next year in Japan – puts us in a very strong position to compete effectively against the big guys: Novartis and Bristol-Myers Squibb, which is our competition.”
He adds that there are relatively few biotech companies whose full line of competition is the big pharmas. “We’ve really gone after them in their sweet spot, and we think we can beat them in areas that they’ve controlled in the past.”
Iclusig was approved for patients who have become resistant to or can’t tolerate other products, notably Novartis’s Gleevec. But now, Ariad is testing it head-to-head against Gleevec and going after a front line indication; it’s also taking the same approach with AP26113, an AKL and EGFR inhibitor for non-small cell lung cancer. The reason behind this, Berger explains, is that virtually every medicine in the field of cancer starts by targeting the area with the greatest unmet medical need. “Clearly, there are loads of patients, if not all of them, who fail one of the other medications. If you can put patients under therapy with what we believe is the best in class BCR-ABL inhibitor [Iclusig], there’s no question that the place to start and the most rapid route to market is with patients who are resistant or intolerant to other medicines. Then you move forward into newly diagnosed patients or front line applications,” he explains.
To commercialise Iclusig in the US, Ariad has had to build a field force – not just reps – of about 65 people. That includes medical science liaisons and regional account executives, and sales managers; people in the field. For Europe, too, it’s about the same. “We think from a coverage point of view, Europe and the US are very similar,” he says. “Probably with a front line indication, we will justify increasing the size in Europe and the US, because you’ll want to go a bit broader, to more physicians that write fewer of the total number of prescriptions, and that’s the case in the front line. But resistant/intolerant disease is largely treated by physicians with experience who treat more than an occasional patient. Our sales force size is fine for now.”
Berger says on a global basis, the challenge in the cancer space is that of pricing and reimbursement, more so in Europe than in the US at the moment. Reason being that the US is pretty stable and pretty clear, but there is pressure around the world to only reimburse for drugs that really make a difference. “I was with one of the medical directors of a payer recently on a panel,” he narrates. “He’s an oncologist – and his comment to the group was, ‘if I could eliminate the 25 percent of medicines used in cancer that have no benefit, that are given but really don’t do any good, I’d pay virtually anything for the drugs that really matter, because I’d be better off, as a payer.’ I think there’s going to be far greater pressure on getting rid of stuff that just doesn’t do anything, and using the money that’s freed up to focus on medicines that do really matter.”
Ariad is one of the few companies that in-licenses nothing, discovers all its own drugs in-house, and takes them all the way through to global commercialisation; the company’s exclusive focus on the cancer space enables this capability. This approach, Berger says, is the foundation of why they think they are a sustainable, long-term, successful global oncology business. And this, according to him, goes back to two corporate values Ariad has: scientific excellence, and clinical scholarship. The second one, clinical scholarship, he says, they view as a critical part of their core values, and as a key distinguishing feature. “Not only do we discover really important new medicines,” he says, “but we take into account a deep understanding of the clinical and medical questions associated with those diseases, and we try to design and develop new medicines that are responsive to a deep understanding of the genetic and biologic basis of different diseases, and then incorporate that into our clinical trials and development, and ultimately into our commercialisation strategies. If the biotech industry merely becomes a small specialty pharma company that in-licenses products that others don’t know how to develop – big pharma – or universities say, ‘here you go, develop this,’ and in turn you add no real innovative value, you can’t win in the end. You may be able to generate value, but you don’t have a sustainable business, you become purely a small specialty pharma company.”
Len Schleifer of Regeneron suggested recently that outsourcing core functions of the development and commercialisation process leads to inefficiencies and missed opportunities intrinsic to the external knowledge transfer between partners. On this, Berger says: “Our basic scientists who were in the lab discovering drugs like Iclusig and AP26113 are the same folks that are working on the next product, so that what they learned on Iclusig applies to AP26113 and the pipeline behind it, and it also informs the clinical development group who sits down the hallway, on how to best design biomarkers and build the science in. Lastly, they all work together with the commercial group not just in the US, but worldwide. So the information from patients that we get in the marketplace worldwide comes back to the company and as Len suggests, it informs every step we take, from new products in the pipeline to product attributes and performance in different regions.”