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David Miller's Main Points

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David Miller
Death of the Blockbuster Drug

  • Definitions
    • Antigen
      • Protein or other marker used as a target for a drug
    • Gene-level testing
      • A screening process used to discover the spectrum of antigens involved in a specific disease
    • Blockbuster drug
      • Drug that sells at least $1 billion per year
    • Therapeutic index
      • An expression of a drug's effectiveness relative to its side effects. Side effects are the denominator so that in two drugs with similar efficacy, the one with lower side effects has a higher therapeutic index.
    • Response rate
      • In cancer therapy, the percentage of patients who have their tumors shrink by at least 50%. Common measure of efficacy
    • Biologic drug
      • A drug that has living components. Monoclonal antibodies (Herceptin, Rituxan, Erbitux, Avastin, Bexxar) are the most common biologics.
  • Old School
    • 1980's-1990's
    • Patient-based (autologous) medicine
      • Take a piece of you and build a drug from it
      • Largely unsuccessful due to manufacturing problems
    • Gene Therapy
      • Add a missing gene or replace a defective one
      • Failed due to drug delivery problems
  • New School
    • 2002+
    • Personalized medicine
      • In-depth analysis of your particular disease
      • Doctor as sniper, not carpet bomber
      • Targeted medicines (mostly off-the-shelf)
    • Example: Cancer
      • Sad fact: We get excited about 25% response rates and 2-month extensions of survival
      • Step 1: Gene-level testing
        • Sophisticated test to determine exact cancer
      • Step 2: Choosing Medications
        • Physician's toolbox of targeted therapies
  • Habits of a Successful Personalized Drug
    • Very low side effects
    • Self-centered (no interaction with other drugs)
    • Exquisite specificity for the target
  • Differences from traditional drugs
    • Biologics, not small molecules
    • Almost no off-label use
    • Modest sales, even for the most effective drugs
  • Beyond Cancer
    • Cardiology
      • Blood protein markers
      • Lipid-palooza
    • Central nervous system
      • Blood proteins, chemical targets, some gene typing
      • Much more work to be done
  • The Blockbuster Platform
    • Fundamentally Different
      • Core delivery platform/system
      • Brand the platform, not the vial
      • Sell a test and a drug
    • Consequences
      • Slower sales growth
        • More approvals needed per dollar of sales
        • Roll out the gene-level test & the drug
        • Convince doctors the target is a valid one
      • Clinical trials
        • Longer to enroll
        • Smaller population
        • More false negatives (without FDA reform)
        • More expensive
      • Investor Overload
        • From two dozen to two hundred cancers
        • From 2-3 to 20-30 drugs for each cancer
      • Investment style changes
        • Post-approval investors thwacked
        • Skews success to early-stage investors
        • Incorporating the blockbuster platform concept
        • New financial and risk models necessary
      • Better patient outcomes
        • Lower side effects
        • Higher efficacy
        • Death of chemotherapy (as we know it)
        • Science-based care
    • When is this coming?
      • Company attitudes
        • Break the blockbuster drug addiction
        • Willing to "limit" a drug to a targeted population
      • Pivotal trials restricted by gene marker
        • Drugs entering pivotal trials for the first time restrict enrollment in the trial according to gene markers
      • Immunotherapy trial successes
        • The immune system is perfect for targeted therapy
        • Lead Phase III program data out 2H-2005
        • Both late-stage programs are platform-based
  • How Can I Profit Now?
    • Be conservative
      • No screen for gene types - not a targeted drug
      • Dampen sales projections for non-targeted drugs
    • Take a long look at immunotherapy
      • First to market with truly targeted drugs
      • Very high therapeutic index
      • Many misconceptions leads to an opportunity for profit
    • Test kit companies
      • All-in-one screening for multiple gene types
      • Fast
      • Cheap
    • Bias to biotech, away from drug companies
      • Pfizer has 2/3 of 2004 revenue going off patent by 2007
      • High partnership dollars, more acquisitions

No positions in stocks mentioned.

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