Is Big Pharma Learning From Its Late Stage R&D Setbacks?

Big Pharma hardly needs to be warned of the fickle nature of drug development, but the industry received a timely reminder on Monday when Sanofi announced the termination of two late-stage assets; iniparinib for lung cancer and otamixaban for acute coronary syndromes. This was followed on Tuesday by AstraZeneca 's decision to return commercial rights for fostamatinib to partner Rigel Pharmaceuticals .

David Grainger – CEO at the drug development consultancy TCP Innovations and a Venture Partner at Index Ventures – suggests that fostamatinib is indicative of a problem that has plagued Big Pharma for some time; that progression into Phase III studies is too often seen as an opportunity to salvage something from earlier trials that have either been equivocal or worse, which have failed.

Painful as it would be, development of fostamatinib should have been wound down – or re-calibrated – when Phase II data were first assessed, argues Grainger (I recommend you read more of David's insightful analysis here)

And how quickly things can change. Four years ago at the ASCO conference, Sanofi's iniparinib – a potential lung cancer treatment – was something of a darling of the oncology community. Now it has been discarded – by virtue of its failure to match promising Phase II data in much larger, pivotal-stage studies. Sanofi CEO Christopher Viehbacher's comments in view of iniparinib were sober; "you have to be humble in the face of science," he told Bloomberg . Similarly, one analyst noted that in such circumstances, AstraZeneca could be applauded for its decision not to invest more resources in a product that it deems to be non-differentiated from what is already available.

Whether investors will buy such sentiment is debatable. The ability to 'kill' failures early is an increasingly referenced and sought-after skill among pharma management, but these latest announcements illustrate that 'duds' continue to slip through the net. These recent examples should also serve to sharpen scrutiny of Phase II trial design, says Grainger, particularly in light of how new products must offer a compelling value proposition that satisfies the demands of not only regulators but also payers.

He argues that "despite the Phase II findings for fostamatinib being deemed 'good' by industry commentators, the drug was always unlikely to challenge established products in the rheumatoid arthritis market based on this same clinical data". This was particularly the case, given that fostamatinib's development timeline was behind that of Pfizer 's Xeljanz – the first oral rheumatoid arthritis treatment to reach the market.

External dynamics clearly play some role here also. The appointment of Pascal Soriot as AstraZeneca's new CEO during the second half of 2012 has helped to shape a sense of re-organisation and rejuvenation at the company. As reflected by the analyst comment cited above, the decision to halt development of fostamatinib now can almost be viewed in a positive light – but would this have been the case when 'robust' Phase II data became available and the previous management set-up were desperately in search of compounds to move into Phase III testing to help off-set a run of late-stage setbacks?

The ebb and flow of broad trends in the pharmaceutical research space is also important. Just as fostamatinib rode a wave of enthusiasm for oral rheumatoid arthritis therapies, numerous commentators have pointed out that the PD-1/PD-L1 cancer immunotherapy products that dominated last weekend's ASCO meeting will also rule the roost over the melanoma and lung cancer space for the next few years. That is not to say that the PD-1/PD-L1 compounds will fail, but companies developing alternative therapies for these indications are likely to find it harder to recruit patients for example.

A similar trend has occurred in the anticoagulant space. Such was the level of expectation for the newest generation of anticoagulants that research in this area has dried up substantially. While the likes of Pradaxa, Xarelto and Eliquis may generate decent sales, Grainger argues they are far from the 'end game' that many expected – with warfarin unlikely to disappear from the cardiologists' armoury for some time.

If an ability to look beyond industry trends is one route to success, a fundamental area of change should also focus on how Phase II data are assessed, says Grainger, who cites the way that beta-amyloid therapies were progressed into (ultimately failed) Phase III studies. "Instead of reading the data in the way the experiments were designed, that is as a failure, the immediate response was to look at post-hoc meta-analyses, sub-groups and the like and assemble a 'plausible' argument for why there was some residual value. This then underpins massive spending on pivotal-stage studies and eventually, the kind of disappointment we now see with fostamatinib," Grainger adds.

The solution is to rigorously design Phase II studies and then act according to the outcome – a seemingly simple task but one which is often overlooked as a means to ensure that failure (at a later stage and at a higher cost) occurs on someone else's watch, says Grainger.

What Big Pharma struggles to achieve occurs with more automation in biotech, since investors or purchasers have to be convinced to take on the asset. Data is more often (but not always) more heavily scrutinised, a lesson that Big Pharma must learn if it is to reduce its Phase III failure rate.