Biotechnology's Time may be Now, But

It's a Long Road from Promising Discovery to Marketable Drug

JOHN GREENWOOD / Financial Post Canada  2dec00

Back in 1990 you may have heard news that scientists in Australia had discovered a gene that they said could be used to "switch off" cancer cells. Not only that, but they had proved their system worked by actually reversing the growth of cancer cells.

The next year, researchers at Toronto's Hospital for Sick Children said they had solved the mystery of why some people do not respond to chemotherapy when they discovered what they described as a tiny pump inside some cancer cells used to flush out chemotherapy drugs.

And almost two years ago, Nobel Prize-winning geneticist James Watson was quoted in The New York Times as predicting that a cure for cancer would be found within two years.

Well, a skeptic might say, what's going on here? If all the people in white coats really are on to something, where are the magic bullets that ought to be showing up in pharmacists' cupboards to deal with cancer and the other terrible afflictions that so far have defied cure?

This may well prove to be, as consulting giant Ernst & Young recently proclaimed, the century of biotechnology. But a lot of researchers and a large sector of the business community thought pretty much the same about the last two decades of the century just ended. The harsh truth, though, is that the path from research discovery to marketable drug is a long, tough and expensive road.

And if you're one of the many who feel frustrated by the seemingly interminable wait for those magic bullets, imagine yourself at the helm of one of the companies in the thick of biotech development. No matter how promising your discovery, the law requires that it pass through a lengthy and highly regulated testing process to weed out treatments that don't do what they're supposed to.

"Studies have to proceed in a very careful way to ensure patient safety and to prove efficacy," says John Kennedy, chief executive of Hemosol Inc., a Toronto-based company that is getting set to launch what may be one of the world's first approved blood-substitute products. And since government acts at a slower pace than industry, it's not surprising, says Mr. Kennedy, that the business of screening applications, which is handled by government, has become a bottleneck.

The bottom line is that most potential drugs that emerge from developers' labs never make it through the U.S. Food and Drug Administration's approval process. (Most players go to the FDA before any other regulator for the simple reason that the U.S. agency is gatekeeper to the world's largest pharmaceutical market.) On average, for every five drugs that make it to human trials, only one makes it on to the market.

According to the U.S. Office of Technology Assessment, it costs from US$200-million to US$350-million and takes from seven to 12 years to turn a potential drug into a product available from your pharmacy. When the product begins with a gene discovery, as many now do, you can add another two or three years to the process.

What can be frustrating for some players is that, while advances in biotech have revolutionized the way drugs are developed, the FDA's approval process is for the most part just as long and tortuous as it was 20 years ago. But there is good reason for that. Every so often regulators are forced to demand the recall of a product that is found, sometimes years after being given the green light, to have serious side effects. The best-known example is thalidomide, the morning-sickness treatment blamed for terrible birth defects in the children of pregnant women who took it back in the late 1950s and early '60s.

At its core, biotech is about harnessing the power of DNA, the double-helix-shaped chemical strand at the centre of each living cell, aptly described as the instruction manual of all life. Having opened the covers on that manual, it is only a small step for scientists to begin making changes in the wording.

That is important because many of today's most intractable diseases are caused by malfunctioning genes. The new technology allows scientists to come up with a new class of drugs that treat the disease -- even cure it -- instead of just masking the symptoms. More broadly, biotech puts enormous power into the hands of researchers -- the capability to make "magic bullet" treatments, to create new genetically engineered crop varieties, even to redesign ourselves. But most of that is still way in the future.

In Canada there are nearly 300 businesses in the biotech sector, most of them in drug development. The majority of those are focused on coming up with medicines for major diseases that at present have no cure (such as cancer, AIDS or diabetes) because that's where the money is. However, only a handful have succeeded in bringing blockbuster products to the market. Among the best known is BioChem Pharma Inc., developer of the AIDS drug 3TC, which last year had sales of more than $1-billion. BioChem seems likely to be joined by QLT Inc., the Vancouver-based inventor of a treatment for age-related macular degeneration, a leading cause of blindness among the elderly.

After that, the list of financial winners is pretty short, at least among developers of major drugs. Forbes Medi-Tech Inc., also of Vancouver, recently launched a food additive made from pulp-industry waste that it says lowers cholesterol. Most of the others are still back in the lab, plowing through the development stage.

But that picture may soon get brighter, because a number of companies are on the verge of applying for marketing approval. Stressgen Biotechnologies Corp. of Victoria is in late-stage trials for a treatment for human papilloma virus infections, precursor to certain kinds of cancer. Another B.C. company, Anormed Inc., has already signed up a marketing partner for its treatment for complications of kidney-cleansing dialysis, which could be on the market as early as 2001.

The battle is going better in the United States, world capital of biotech. But even there, the nearly 1,300 companies in the biotech sector have made it to market with a grand total of only about 90 drugs, though another 350 are in human clinical trials. Amgen Inc. of California, one of the granddaddies of the industry, took its anemia treatment Epogen to market in 1989. Last year Epogen had world-wide sales of US$1.8-billion, making it one of the top-selling biotech drugs of all time. A version of a human protein produced by genetically engineered bacteria, it was one of the few biotech products to fulfill its early promise, a magic bullet for patients and a gold mine for the company.

For a public anxious for answers and a biotech industry keen to provide them, the good news is that the odds of success are getting better fast. Biotech has made a number of huge leaps forward in recent years, most notably in the field of genomics. In June, the U.S. company Celera Genomics set off a wave of excitement that spilled well beyond the scientific community when it announced that it had decoded the human genome -- meaning basically all genetic material in a cell, the set of instructions necessary to create a human being.

Craig Venter, the maverick scientist and former beach bum who founded Celera, concedes that the feat by itself is of limited utility. It's how cells use that information that's important. The cell's DNA tells it how to reproduce itself by making proteins and putting them in the right place. Right now, scientists have only a vague idea about that part of the process. The study of how it works is called proteomics, and that's the next step.

The biotech revolution began in the mid-1970s, when companies first began artificially producing human proteins -- the few they understood. Human growth hormone was one of the early ones. Researchers knew that dwarfism is sometimes caused by the body's inability to produce something called human growth hormone. So they found the genes that carry the code for the hormone and spliced them into bacteria. The result was new bugs that, often through a very expensive process, produced the stuff themselves. Another example is Epogen, Amgen's blockbuster anemia drug. But drug developers were dealing only with the few snippets of the genome that had been deciphered by that point, and the tools they were using to manipulate the genes were crude by today's standards.

owadays, companies such as Montreal's Nexia Biotechnologies have taken the concept further, using goats instead of bacteria. Unlike early developers that had to rely on the hit-and-miss approach, Nexia and others in this field have a pretty good idea not only of how long it will take to put a transgenic animal on the ground, but also how much of the protein it will produce. Not far off in the future, says Jeff Turner, Nexia's chief executive, many drugs will be manufactured in herds of engineered farm animals, providing an easier and far less expensive system than existing methods. Some companies are pushing the envelope even further, experimenting with genetically engineered crops such as canola, designed to produce a range of products, including human proteins. For example, Nexia recently announced that it had developed a goat that carried a spider gene. The company hopes that the goat will enable it to launch a business selling industrial spider silk.

Another major advantage offered by gene splicing is that it has enabled researchers to create what might be described as cellular guinea pigs. "If you know that a gene has a specific effect and you isolate that gene, you can then engineer a cell that asks, "Does my drug work?'" says Brian Bapty, a biotech-industry analyst at Goepel McDermid. "Now, instead of testing in animals, you can test in cell lines, you can test lots of drugs at the same time. It makes life a lot easier. It's tremendously powerful technology." While testing in isolated cells doesn't eliminate the need for testing in animals, it does mean that drugs that make it to that stage have a much better chance of succeeding.

At the same time that scientists have been decoding the genome, improvements in computer technology have provided other huge time savings. Indeed, the unravelling of the human genome could not have been accomplished as early as it was without the aid of computing power that didn't exist a decade ago. Most of the grunt work at Celera, for example, was accomplished by hundreds of sophisticated gene-sequencing machines housed in a building the size of a football field and run by just nine people.

Scientists have learned that some drugs affect patients differently, depending on their genetic makeup. For instance, some will react positively and get better, while others will get sicker. Now that we understand genetics better, doctors can start to look at patients' DNA as an indicator of whether to prescribe a particular drug. One Toronto company, Visible Genetics Inc., is already using its technology to read the DNA of the AIDS virus and thus to predict which drugs will perform best on individual patients.

There are about 100,000 drugs on the market today, all aimed at treating about 100 diseases, says Michael Dennis, chief executive of Signalgene Inc., a Montreal-based genomics company. The human genome contains about 80,000 individual genes. Scientists now believe that genetics has provided as many as 10,000 potential drug targets for biotech companies to pursue, each associated with a medical condition. "We've hardly started to scratch the surface," says Mr. Dennis.