Strategies for developing and commercializing nanobio drugs, diagnostics and devices

Abstract

NanomedicineVol. 2, No. 2 EditorialFree AccessStrategies for developing and commercializing nanobio drugs, diagnostics and devicesMark BungerMark BungerLux Research, 535 Pacific Ave, San Francisco, CA 94133, USA. Search for more papers by this authorEmail the corresponding author at mark.bunger@luxresearchinc.comPublished Online:23 Mar 2007https://doi.org/10.2217/17435889.2.2.137AboutSectionsPDF/EPUB ToolsAdd to favoritesDownload CitationsTrack CitationsPermissionsReprints ShareShare onFacebookTwitterLinkedInRedditEmail Why nanobiotechnology?We live in thrilling times of scientific progress and promise in medicine, with the sequencing of the human genome, realistic hopes of cures for cancer and Alzheimer’s disease and groundbreaking discoveries in regenerative medicine making daily headlines. But, while the science thrives, business is not well: pharmaceuticals worth US$70–80 billion go off-patent in the next 4 years and generic competition is increasing pressure on drugmakers, as Pfizer’s recent announcement to lay off 10,000 people illustrates. Discovery is becoming more difficult: for every 10,000 compounds in discovery, fewer than ten make it to clinical development, perhaps two enter Phase III trials and just one gets to market. Even after launch, approved drugs and devices can suffer multimillion dollar setbacks, as the recalls of Merck’s Vioxx® and Boston Scientific’s Taxus® demonstrate. There are few remaining opportunities for blockbuster drugs and devices that will reach millions of patients; new products must address ever-rarer diseases and disease combinations (e.g., drug-eluting stents for diabetics). A recent article in the esteemed Harvard Business Review slammed the biotech industry, denouncing cutting-edge medicine as a noninvestable proposition and, indeed, questioning whether science should even be a business at all.Against this backdrop, one might legitimately be concerned about the cardiac health of a typical drug company executive, or ask whether anyone wanting to start a new life sciences company should have his or her mental health examined. Yet, at Lux Research – where we analyze the clinical results, scientific papers, patent filings and financial performance of hundreds of life science corporations, startups and academic labs from all over the world – we find enthusiasm for nanobiotechnology drugs, diagnostics and devices running high. The reason is nanomedicine’s enormous potential. As an illustration, we calculated the impact of four emerging nanobiotechnology innovations on breast cancer: if nanoscale screening tools that replace mammography, nanoenabled magnetic resonance imaging contrast agents that replace biopsies, nanoparticulate ablation procedures that replace lumpectomy and mastectomy and nanoreformulations of existing chemotherapy agents were universally applied to breast cancer treatment, patients would gain 7 years of life; 15-year treatment costs for 1 year’s worth of diagnosed patients would drop by US$4 billion – a saving of 39% – and entirely new product categories would be created in these fields.This specific example illustrates nanomedicine’s broad promise: wholly novel technical approaches to treating a disease; fundamental technologies that have potential applications across a wide variety of conditions; or hybrids of drug, device and diagnostic tool in one integrated system. Sometimes, nanobiotechnologies simply cost much less to manufacture or administer – making them potentially more profitable and accessible to more patients.These unique advantages lead their developers – and us at Lux Research – to view their commercial prospects optimistically. Our observations and interactions with these companies have uncovered useful strategies for developing and commercializing nanobio drugs, diagnostics and devices. Specifically, nanobiotechnology innovators should first match their technology’s promise to unmet needs and then navigate their product’s development through funding, patenting, partnering and roadmapping.Match promising technologies to unmet medical needsNo nanobio drugs, diagnostics or devices enter a completely unmapped field – nearly every condition that afflicts patients can currently be treated in some way. Clinical trials test new treatments against these existing ones to see if the new product is more effective; but they are tested initially on patients with very advanced disease states. Novel drugs and devices seldom have all their kinks worked out, meaning that many promising innovations do not pass this very high bar.Given this challenge, the simplest and most commercially successful approach to drug delivery has been nanoparticulate reformulations of proven drugs – milling small-molecule therapeutics, such as paclitaxel, down into nanoparticles and combining them with polymers to keep them dispersed. These nanocarriers’ specific advantages over microcarriers include higher intracellular uptake, the ability to penetrate submucosal layers and the opportunity to use systemic administration without aggregating and clogging capillaries. Already, many such drugs are on the market and dozens more are in the pipeline. Developers include Abraxis Pharmaceutical Products (APP) and Baxter (USA), Elan (Ireland), Solubest (Israel) and Eurand (Italy). APP’s flagship product Abraxane® was approved in 2005 but expected to see over US$170 million in revenue in 2006.In more technically challenging areas, such as delivery of proteins and peptides, nanocarriers’ tailored shape, surface charge, molecular weight, coatings and size enhance cell membrane permeability, ensure a short biological half-life and can prevent the loss of secondary or tertiary structure of their payload. The ‘tunability’ of these systematically administered therapies is best illustrated by micelles, liposomes and polymersomes – lipid or polymeric nanoparticles that mimic cells and viruses, protecting their active payload from being attacked by the immune system and/or enabling triggered release by embedding the drug in pores or the surface of an externally activated nanosphere. Companies pursuing this approach include Johnson & Johnson (J&J), Gilead, Nanocarrier, Nutralease, Samyang and Kereos, with products such as J&J’s Doxil®, which contribute to a total market of over US$100 million. Startups, such as Mauro Ferrari’s Leonardo BioSystems, illustrate the most complex end of the spectrum – combining and tweaking several of these properties to address very specific tissue types and disease states. But this complexity means that, initially, the startup’s products will probably not be tailored perfectly to compete with incumbents in well-trodden areas, such as breast cancer. Innovators should prove the efficacy of their new drug, device or diagnostic test in narrow areas of unmet needs first, before pursuing larger markets and widespread conditions that are already being addressed.Drug–device combination products are a new category of therapies that promise the advantages of both chemical and mechanical or electric interaction with the body; a conventional example would be drug-eluting stents, but a great many nanobiotechnologies fall into this new category. For example, there are nanoporous materials that function as amorphous implants, enabling controlled delivery and a variable rate of sustained or delayed release for small molecules, peptides, small proteins and DNA. Australian startup pSivida has developed a brachytherapeutic liver cancer treatment by enclosing radioisotopes of potassium in honeycomb-like cells etched into nanoporous silicon. The radioisotope is held in place near the tumor continuously for several days of treatment, until it decays to nonradioactive forms; the silicon is degraded into bioresorbable orthosilicic acid by the body and both are eliminated. Although this therapy is currently in clinical trials, the company is also pursuing small-molecule drug-delivery applications, and a spinoff called AION is pursuing diagnostics. Other nanobiotech companies with similar products are Nanobiotix (France), Sol-Gel (Israel) and BioSante (USA).Another example of drug–device combination nanotechnologies are externally activated nanoparticles that promise ultraprecise targeting. For example, companies such as MagForce Nanotechnologies, Triton Biosystems and Nanospectra Biosciences coat metal or metal oxide nanoparticles with a targeting ligand, such as folic acid or a particular glycoprotein, and inject them into the systemic circulation. The targeting moiety ensures preferential uptake by tumor cells but an external energy source (e.g., infrared light or an oscillating magnetic field) applied from outside the body heats the particles only at the disease site, thermoablating the tumors. Not only does the treatment promise more precision and fewer side effects than chemotherapy, it is also potentially less expensive. One researcher working on a similar treatment at the University of California, San Francisco, told us that, because it is noninvasive and uses readily available materials, such as gold, instead of patented chemicals like Novartis’s Glivec® (a US$27,000 a year therapy) it has the potential to be affordable even to third-world patients and practitioners. These therapies are very close to market: MagForce® is in Phase II trials for the brain cancers glioblastoma and astrocytoma, and in four Phase I trials for cancers in several other tissue types; Nanospectra plans to start clinical trials for head and neck cancers in 2007.Nanobiotechnology has also brought innovation to diagnostics, with some of the most successful new companies coming in this field. Immunicon uses magnetic nanoparticles to identify very rare cells that result from conditions such as metastasis of breast tumors; the company has grown over 500% since its IPO in 2004 and closed 2006 near US$10 million in revenue. In vitro diagnostics startup Nanosphere topped Lux Research’s recent science pipeline rankings; its tests for biomarkers, such as prostate-specific antigen, are orders of magnitude more sensitive than conventional tests, can be multiplexed and cost approximately US$50 per patient, compared with up to hundreds of dollars for today’s tests. It raised US$57 million from renowned Bain Capital in 2006 and will have products on the market in the first half of this year. Many nanobiotech companies cross the diagnostics/therapeutics gap. For example, Nanospectra’s gold particles absorb infrared light at one wavelength to heat tumor cells and reflect another wavelength to image them – a ‘theranostic’.Navigate development through funding, patenting, partnering & roadmappingIdentifying the right technology to address a specific condition – or the right conditions to attack with the technology you have developed – is only the beginning. After this technical work is done, companies still need to navigate the process of funding development, patenting their innovations, finding outside partners and designing a roadmap that ensures multiple ways to succeed.Find funding for starting upWith a promising discovery in hand, the first step towards commercialization – for both startup entrepreneurs and corporate ‘intrapreneurs’ – is getting funding. Happily, life sciences startups in nanotechnology remain popular with investors. Lux Research’s recent examination of nanotechnology venture capital (VC) found 12 VC deals in healthcare and life sciences in 2006, for a total of US$124 million. While the average deal size was US$10.4 million, two investments – Nanosphere’s US$57 million and Transave’s US$35 million – pulled the average up considerably. Internal startups – corporate projects that get funding from R&D or line-of-business budgets – are also getting attention: we estimate another US$120 million in corporate funding this year. It is particularly important for startups to seek ‘smart’ money: investments from corporate VC arms that place less of a premium on financial return and instead emphasize product development and also help the startup with legal and sales expertise and labor. The biggest source of funds for nanotechnology research in life sciences remains government programs, which at US$1.3 billion are approximately 80% of the total; some of this is accessible through business grants and company–academic partnerships.Tiptoe through the patent minefieldThe number of nanotech patents issued has risen steadily from just 125 in 1985 to 4995 today, with a compound annual growth rate of 20%, far outpacing other areas of innovation. In nanomedicine, a combination of large market sizes and selectively high relevancy yields a field with multiple battles worth fighting. Ceramic nanoparticles have the highest relevancy across the greatest number of healthcare/cosmetics markets, with applications ranging from dental filler (already shipping from companies like 3M), to cancer treatments (in multiple clinical trials), to sunscreen additives (already in hundreds of millions of dollars worth of end products). Fullerenes and carbon nanotubes are theoretically relevant to a wide range of nanomedicine applications because their attachment-friendly structure makes them good carriers of other molecules, while their small size gives them desirable pharmacokinetic properties. For example, Vitamin C60 BioResearch in Japan is developing pharmaceutical and cosmetic ingredients that use fullerenes to eliminate free radicals. But scientific research on such applications of these nanomaterials is so early that any market opportunity must be heavily discounted today.Unfortunately, nanomedicine patents are a veritable minefield. For example, the popularity of antimicrobial nanosilver in medical devices such as Smith & Nephew’s Acticoat™ wound dressings has sparked vigorous patent disputes, such as the disagreement between South Korea’s ABC Nanotech and Nanux over rights to a technique for incorporating the metal in polymers. Another highly patented nanomaterial is dendrimers, which Australia’s Starpharma is using in an US FDA-fast-tracked vaginal microbicide that is currently in clinical trials against genital herpes and HIV. These materials’ 3D, highly customizable structures make them well-suited for supporting or carrying a range of substances, from drug molecules to diagnostic reporters. Today, there are 262 US-issued dendrimer patents, with healthcare and cosmetics claims accounting for 38% of the total; Starpharma and its partners control much of this intellectual property (IP). Similarly, diagnostic tools called quantum dots are embroiled in controversy as companies, such as Nanosys and Invitrogen, battle others, such as Evident Technologies, who view these as invalid given prior art claims from Russian work in the 1970s. Metal nanoparticles show great promise in treating tumors and preventing infection but these applications are heavily defended by, for example, Naomi Halas’s patents surrounding gold nanoparticles (licensed to Nanospectra). Halas’s IP covers comprehensive claims seminal to the commercialization of semiconducting nanoparticles, including plasmon resonance-based sensors using metal nanoparticles and nanoshells as well as drug-delivery applications.Accelerating innovation via partnershipsCorporations developing next-generation products look to nanotech startups to provide unique materials, license lynchpin IP and make time-saving shortcuts on their roadmaps to market; our most recent survey of corporations indicates that 70% use partnerships with universities and startups to get to market faster. So, in October 2006, we ranked the world’s 136 independently operating, venture-backed nanotech startups on four factors – a solid science pipeline, the ability to scale up to commercial viability, a robust legal and regulatory position and operational and financial performance – to identify the well-rounded firms that have the best potential to create value for corporate partners. We found that the diagnostics startups (e.g., Nanosphere and Immunicon, which ranked number one and three, respectively, among life sciences startups) were most advanced and of most urgent interest for corporations, since they are not just potential partners but actual competitors in the market today. We also found that nanomedical startups are leading the trend that blurs the line between therapies and diagnostics, with startups such as Kereos (number two) and Capsulution (number four) already in clinical trials.Develop a roadmap that maximizes strategic options, not long-term revenueNanomedicine’s pace of development is limited by an unavoidable factor – the rate of progression of disease. It will take years, even decades, to prove the efficacy of nanomedical treatments for protracted conditions, such as Alzheimer’s and heart disease. Even with conditions that progress extremely rapidly, like infectious disease or traumatic injury, focusing on only one application makes the technology – and hence the company or division – vulnerable to failure in late-stage trials or to superior competitive products. For this reason, companies developing nanomedical products need a technology roadmap that provides multiple interim commercializable innovations to ensure success in case long-term goals prove to be unattainable. For example, many researchers are pursuing electrospun polymeric nanofiber scaffolds to guide neural regrowth in cases of spinal injury or neural degeneration; these same materials also have use in relatively easy applications, such as wound and burn care. The latter application – even in a simple scar-preventing children’s bandage, available over the counter and adorned with Disney figures – would partially finance more complex and invasive treatments in cardiac and nervous tissue, which will be many years in development, if they succeed at all. Given these uncertainties, commercialization roadmaps should prioritize short-term innovations to establish cash flow, then those that give the maximum number of options and lastly those that have the maximum predicted payoff.Future perspectiveEven in light of so much activity today, it seems that much of nanotechnology’s promise lies years off in the future. What, specifically, will nanomedicine mean from a commercial perspective?Nanomedicine will drive a new wave of innovative drugs, devices & diagnostic toolsThe sheer number of new technologies in the development pipeline gives great hope that many more effective, more accessible treatments for intractable disease are on their way. From Starpharma’s HIV-fighting dendrimers blocking receptors on the viron’s surface, to 3DM Puramatrix’s synthetic peptides aimed at repairing nerve damage, to the wide array of cancer treatments from companies such as Nanospectra, MagForce, and pSivida, it appears almost unavoidable that patients will soon be thriving despite conditions that are severely debilitating today and surviving diseases that we currently view as fatal. Further in the future, we see early-stage research in areas such as regenerative medicine and gene therapy that looks equally promising. If costs and accessibility improve, as also seems likely, nanomedicine’s overall benefit to patients will be remarkable and pervasive.Nanomedical innovation will intensify competitionLife science majors – skeptical pharmaceutical makers, especially – should not view the apparent immaturity of nanomedical startups as cause for complacency. Smith & Nephew’s nanoenabled Acticoat™ outgrew its product category by 300% in the last 2 years, meaning that the product stole market share from competitors with conventional products. The performance and cost advantages of nanomedical products will also exacerbate the already heated competition from generic drugs, developing countries and companies in adjacent industries. From comprising a minute fraction of currently available therapies and diagnostics, we estimate that, in 2014, 16% of manufactured goods in healthcare and life sciences – tens of billions of dollars in revenue – will incorporate nanotechnology.Innovation & competition will ultimately change the structure of the life science industriesWe have only begun to see the clinical and commercial impact of theranostics, such as Kereos’s, and drug–device combinations, such as Acticoat. Look at the case of Invitrogen, which acquired Quantum Dot Corporation (QDC) in November 2005 for just US$5 million. In addition to a fancy new product to enhance its lab equipment and material catalog, it gave teeth to QDC’s claims of the diagnostic utility of quantum dots and granted Invitrogen a hotly disputed patent monopoly that it is now using to pry open the US$100 billion in vitro diagnostics market. The following month, Affymetrix put its CFO on the board of biosensor maker Nanomix and, last year, started collaborating with nanomedicine startup Signalomics, an in vivo diagnostics tool maker. These commercial moves in nanomedicine mean research, in vitro diagnostics and in vivo diagnostics are not separate markets any more but are separate product categories in one market, giving players on both sides of the old boundary a new set of customers and competitors to deal with. The biggest scientific shifts caused by nanomedicine – and the biggest commercial opportunities – will come from companies whose products break down the barriers that separate drugs, medical devices and diagnostic tools.FiguresReferencesRelatedDetailsCited ByEngineered nanoparticle exposure and cardiovascular effects: the role of a neuronal-regulated pathway3 January 2019 | Inhalation Toxicology, Vol. 30, No. 9-10Market Considerations for Nanomedicines and Theranostic NanomedicinesCompany Profile: Kindling translational cancer nanotechnology researchSandra Chapman, Nicholas J Panaro, George W Hinkal, Sara S Hook, Uma Prabhakar, Krzysztof Ptak, Dorothy Farrell & Piotr Grodzinski2 March 2012 | Nanomedicine, Vol. 7, No. 3Nanobiotechnology—quo vadis?Current Opinion in Microbiology, Vol. 13, No. 3 Vol. 2, No. 2 Follow us on social media for the latest updates Metrics History Published online 23 March 2007 Published in print April 2007 Information© Future Medicine LtdPDF download