Inflamm Res 45:365-369 (1996) 1023-3830/96/080365-05 $1.50 + 0.20/0 �9 1996 Birkh/iuser Verlag, Basel

Meeting Report

Facing the future: Drug discovery reconsidered M. L. Bliven and I. G. Otterness

Department of Cancer, Immunology and Infectious Diseases, Central Research Division, Pfizer Inc., 558 Eastern Point Road, Groton, CT 0634.0, USA

A one-day symposium to mark the 25th Anniversary of the founding of the Inflammation Research Association was held on December 5, 1995 at the New York Academy of Sciences. The enthusiastic audience heard about changes in drug discovery from its beginnings through to the current status, with a glimpse of the future. The lively discussion which followed each presentation was continued through lunch and into dinner, allowing all who attended an opportunity to personally interact with the speakers.

Ivan Otterness (Pfizer Central Research, Groton, CT, USA) opened the meeting with a review of the history of Western drug discovery. From the Greek era through the Romans until nearly the 18th Century, sickness meant that the four humors were out of balance. The system failed to recognize individual diseases and specific treatments. Patients were treated with drugs that restored the balance. Specific therapeutic plants were being used by folk healers, but not by the doctors.

Frederic Serturner, an apothecary, prepared the first plant drug - morphine - and thereby opened the possibility of rational pharmacology. He engaged friends to test for active drug.

Francois Magendie may be considered the founder of pharmacology. He was the first to demonstrate drug absorption and an active site for a drug. He found that man and animals respond similarly to drugs, making detailed pharmacology possible. Magendie wrote the first modern pharmacopoeia carrying out rational testing in animals and in the clinic using pure drugs.

Plant-derived drugs could now be isolated and purified, and pharmacological effects systematically tested. Rational clinical testing began. A process for the discovery of drugs, however, was still unknown.

Sodium salicylate, as an antiseptic prodrug of phenol, was found useful for treatment of arthritis. It became the first commercially manufactured synthetic pharma- ceutical. In the following three decades, discovery of acetanilide (by error), antipyrine (by luck) and phenacetin

Correspondence to." M. L. Bliven

(by design) demonstrated that drugs could be synthesized. As a result, many chemical companies established their own pharmacology labs.

In the U.S., the interstate sale and transport of drugs was first regulated in 1908. Drug ingredients were labeled, but the choice of drug was left to the consumer. In 1938, safety standards for drugs were imposed.

Since the 1940's, industrial pharmacology and chem- istry has dominated drug discovery. At first, study of chemicals in animal models or on animal tissues was the norm. Now, isolated cells or proteins provided the dominant methodology of drug discovery. Once one company discovered a drug, others patented and sold similar but chemically differentiated drugs. After 1956, the law required prescription-only sales for drugs and physicians were given control of drug use. The 1962 drug law added efficacy standards. Clinical trials must prove utility, and experts judged their validity. Physicians were limited to choosing drugs from an FDA approved list.

Drug discovery and commercialization is still chang- ing. Discovery of compounds is now based on a purified molecular target. High speed chemistry and drug testing has accelerated the rate of discovery. With X-ray and NMR structures, de novo design is feasible.

Pharmaceuticals, too, have changed. Recombinant proteins have entered the market. Marketing require- ments are more stringent. A new drug must improve the quality of life and the cost of treatment must not outstrip the benefit. Old drugs are now quickly generic. Safe prescription drugs are now being approved for over-the- counter sales, thus returning some decision-making to the consumer. The stringent regulatory requirements for approval have served as a seal of safety and efficacy. The rest of the world is now demanding similar assurances from their regulatory agencies.

Marianne-Louise Pierce (Life Sciences Associates, Ltd., New York, NY, USA) discussed the effects of economics and financing on drug discovery and innovation. Historically, the pharmaceutical industry was a "crown jewel", with strong growth, high profits, an abundance of patent protected products and full product development pipelines. Established

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pharmaceutical manufacturers enjoyed high profits because high barriers for new entrants restricts competi- tion. From 1982-1992, the U.S. ethical drug industry grew rapidly with an impressive 18% average annual increase in revenues. In the late 1980's, even as product volume and new product approvals declined, price increases sustained profit growth.

In the 1990's, long-term factors and political trends coalesced and industry economic performance weakened. In the U.S., revenue growth slowed dramatically and worker productivity declined throughout the first half of the decade. Industry financial performance was so weak that in 1991, about one in every 12 jobs in the industry was eliminated. Downsizing provided symptomatic relief, but since the layoffs, industry productivity has shown little improvement.

Today, structural factors have caused a permanent change as the industry faces new challenges. First, generic drugs are eroding the profitability of branded products, long the source of financing for research. Between 1993 and 1999, patents will expire for drugs with annual sales of $20 to 25 billion. When buyers substitute generics for branded products, total industry revenues and profits fall, often dramatically. Secondly, power has shifted from drug manufacturers to payers, such as governments and HMOs, who use their purchasing power to force price concessions. Finally, high research productivity has attracted substantial investment to the biotechnology sector. Since 1983, at least 1,300 pharmaceutical com- panies have been incorporated, and today many are marketing or preparing to market products.

The recent wave of mergers and acquisitions between major pharmaceutical companies is in response to economic pressures forcing an industry-wide contraction. Across-the-board downsizing and "cherry-picking" of product and research portfolios follows most mergers, but, while necessary, are painful and not innovative.

Despite the negative factors, there are strong market and economic incentives for innovation, and rewards will flow to the most productive competitors. First, overall demand is growing. Populations are aging and older people have the highest level of consumption of pharmaceuticals. Additionally, new markets have opened, especially in Asia. Finally, important scientific advances have created new therapeutic areas, including pioneering advances from molecular medicine and genomics.

Declining research productivity has led to escalating costs for each new innovation. Most companies are not producing enough new drugs to sustain investment at prior levels. Historically, the pharmaceutical industry has had strong cash flows. Although many companies are still relatively cash rich, the pharmaceutical industry cannot indefinitely finance declining research productivity. In 1985, the cost to bring a drug to market was estimated at $50 million. A decade later, that figure has grown sevenfold and today exceeds $359 million.

A study of ten drug companies from 1965 to 1990, representing about 30% of the industry worldwide, documents declining R&D productivity. The study found that although clinical development costs were rising much faster than discovery costs, there was strong

evidence of productivity loss. In the sample data, in 1965 1.9 patents were granted per million dollars R&D spending, versus 1990 when only 0.1 patents were granted per million dollars R&D. The ratio of INDs obtained per billion dollars of R&D fell from a high of 275 in 1965 to 20 in 1990. Similarly, NDAs fell from a high of about 275 in 1965 per billion dollars of R&D to 16 in 1990.

Two concepts help explain declining research produc- tivity. "Racing behavior" arises when several companies compete to develop a drug. This arises when, after reviewing the same basic research, drug developers reach identical or similar conclusions and proceed to "discover" the same lead compound. Since duplicate research programs are funded, total industry R&D spending is disproportionately higher compared to its benefits: one new drug.

The second concept postulates that technologies, like products, have life cycles. In emerging technologies, such as biotechnology, a small investment potentially brings a large return; in a mature technology, larger and larger investments achieve smaller incremental advances. From the perspective of research management, "doability" is higher in familiar but mature technologies. Conversely, risk of failure is higher in emerging and unproved technologies. The desire for predictability and minimal risk tends to channel investment toward less productive but more established areas.

New realities in drug discovery economics will reward competitors who learn to optimize research productivity beyond downsizing and outsourcing. Some of the planning and management techniques that the most successful companies are using were described. These include life cycle concepts for research budgeting, advanced financial engineering tools for setting priorities and balancing risks, the game theory for managing competing investments.

Deborah Lubeck (Technology Assessment Group, San Francisco, CA, USA) discussed the role that the new field of quality of life and pharmacoeconomic analysis plays in drug approval. The need for evaluation of healthcare spending has come about because of the escalation of medical costs over the past decade. The increased role of managed care, cost competition among providers, and regulation of hospital fees demands establishment of a rational basis for evaluating medical procedures. Effectiveness and costs must be weighed properly in order to make good choices. The growth of healthcare legislation has led to the assessment of health outcomes based on (a) cost effectiveness and (b) evaluation of quality of life from the patient's perspective, Patient outcomes are emphasized in what is now called comprehensive disease management.

Outcomes research focuses on cost of care and measurement of patient functioning and well-being. Initially, therapy was expected to deliver a better outcome without regard to the cost of healthcare. Now cost is constrained, but still there's a focus on improving out- come for the patient. But outcome depends on one's point of view. For the healtheare provider, it is duration of hospitalization and expenditure during hospitalization; for the employer, it is healthcare expenditures and j ob-related productivity; and for the patient, it is quality of life.

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In looking at costs, there are four separate com- ponents to be examined: direct medical expenditures, direct non-medical expenditures, indirect costs related to morbidity and mortality, and intangible (quality of life) costs. Cost can be measured from the point of view of society, the patient, the payer and the provider, and those are all very different perspectives.

The opportunity for financial investment gives another perspective on the evaluation of costs. A pharmaceutical company must now consider probable cost benefit analysis in determining whether to make an investment. That in turn influences the research they're financing.

Cost analysis consists of four basic processes: cost identification, cost benefit, cost effectiveness and cost utility. Cost identification is defining the cost of illness. Cost benefit is the evaluation of the cost of providing care and drug treatment. Cost effectiveness calculates the cost of providing care and evaluating an outcome in terms of lives saved or disability avoided or mitigated. Cost utility analysis is the cost of care using patient assessment of how they value the outcome in assigning utility measures.

Various instruments are available for evaluating treatment. They attempt to measure patient satisfaction, patient outcome, physical function, and quality of well- being in clinical trials. Currently, there is emphasis on assessment of health status and outcome by index scoring. Index scoring tries to collapse all those changes - changes in pain, changes in mental health, changes in physical function - into a single value. Index scoring is being pushed by the FDA as it simplifies communication of results and gives a common standard of evaluation. However, the assumptions made in combining all the distinct measures are hidden in the single index.

Several studies of quality of life outcomes found that patients' overall assessment of their quality of life correlated well with index scoring. However, these methods are rarely validated. Quality of life and economic assessments are being done in modeling studies, piggy-backed on safety and efficacy components of clinical trials. This can be cost effective for drug manufacturers but tedious for clinicians conducting the trials. Currently, there is a growth of better validated, more operational databases such as for arthritis or HIV infection, with which Dr. Lubeck has done research for the past 10 years.

Outcomes research is growing in importance with increasing cost consciousness. There are numerous ways to measure cost and evaluate outcome. Outcome research in chronic diseases such as rheumatology is pioneering better methods. Development of validated high quality health status instruments and measure of utility in outpatients are necessary to insure selection of the best treatments, to quality control cost constraints, and to pinpoint areas for medical investments.

Douglas Daly (New York Botanic Garden, New York, NY, USA) described his efforts to identify new plants as sources of new drugs. He has led 30 expeditions to the Neotropics to collect and identify plants as sources for new drugs. Although some entrepreneurs are interested in exporting and selling traditional herbs and teas, political reasons prohibit this to prevent stripping the rain forests

and to prevent unidentified species being lost forever. Nonetheless, development is rapidly destroying plant species which might otherwise be a source of drugs for saving lives and improving life's quality.

There are currently over 200 companies investing in developing drugs from plants. About 25% of all prescriptions filled in U.S. pharmacies still contain one or more active ingredients derived from plants, and there are about 120 different pure compounds from plants still used in pharmaceutical preparations in the developed world. There are projected to be many more as yet undiscovered plant drugs. How do we increase our chances of finding them?

One way of focusing the search for plant drugs is using an ethnobotanical prescreen. In studies examining plant- derived pharmaceuticals, contemporary use was identical or closely related to traditional use for a significant number of them. Since random screening is expensive and inefficient, Dr. Daly proposes that we utilize the medical lore of indigenous peoples to identify probable uses. In some cases, indigenous people have a very sophis- ticated medical system. One of the Amazonian Indian tribes with whom he has worked involve some of the same procedures employed in Europe when empirical observation and replication was taking place in the early 19th Century.

For drug discovery research, scientific rigor is just as important in systematics and biogeographical studies as it is in the medical or pharmacological components. This is necessary to correctly identify the source, to guide geographical and ethnobotanical sampling, and to direct chemosystematic follow-up.

Shaman Pharmaceuticals is carrying out clinical studies of a plant from Western Amazonia called "blood of the dragon". The red sap from this plant, which was believed by indigenous people to be useful for treating blood diseases, contains a compound which has just completed Phase II clinical trials for herpes simplex, and is starting Phase II clinical trials for treatment of traveler's diarrhea. This may become a success story for the application of congruence strategy, as the plant is used for the same purposes throughout Western Amazonia.

A problem in using ethnobotanical studies is under- standing the cultural concepts of disease. It is important to know what traditional peoples mean when they talk about "rheumatism" or "tumors". In Amazonia, ethno- botanists designed a market study of medicinal plants. A physician set up a clinic to observe, diagnose, and treat ailments. At the same time, she interviewed people about the plant remedies they use. A botanist then accompanied the people back to their village to examine the plants.

There are ethical considerations to such studies. Agreements must be reached with the government about removing plants and paying royalties. Before collecting plants and interviewing people, the investiga- tors must go into the communities, describing the project and the benefits to the inhabitants, and basically ask their permission.

Finally, random collection of plants for empirical testing for inhibition of specific drug mechanisms has a much lower probability of success, but since most of drug discovery relies on the discovery of a lead compound, this

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introduces a source of novel compounds unlikely to be duplicated among synthetics.

John Schwab (University of North Carolina, Chapel Hill, NC, USA) discussed the use of an animal model of arthritis to explore potential mechanisms for intervention in arthritis. The bacterial cell wall model of arthritis can be manipulated to analyze molecular mechanisms of disease and to test potential therapeutic agents since it is a model that appears to reflect the etiology of some human inflammatory arthritides. Peptidoglycan- polysaccharide (PGPS) complexes from the cell walls of group A streptococci can induce arthritis. These complexes can be isolated from certain bacteria which colonize the human GI tract. At least two of these anaerobic species of bacteria are elevated in the intestinal tracts of patients with rheumatoid arthritis or Crohn's disease, and PGPS complexes isolated from the cell walls of these anaerobes are effective in inducing this model of arthritis. It appears that the relationship between these microbes, the occurrence in the intestinal tract, distur- bances in the permeability of the intestinal wall, and the association of these with rheumatoid arthritis may be very significant. Endotoxins and bacterial superantigens that can induce flares or exacerbations of arthritis in rats previously induced with PGPS may also be involved in human disease.

The histology of the rat joint shows that in animals injected with the cell walls, over time the cartilage is destroyed and the subchondral bone is invaded by pannus. In rats given muramidase three days after the cell wall extract, the joint appears normal, with healthy cartilage, subchondral bone and synovial membrane, and a clear joint space. A single injection of muramidase into rats two weeks after PGPS injection, when they had already started the chronic phase, caused the disease to recede. The only known relevant activity of the enzyme is to destroy PGPS of bacterial cell walls. This suggests the presence of antigen is necessary for establishing disease.

The essential role of T lymphocytes in the chronic disease process has been shown in this model by the use of anti-T cell antibodies and cyclosporin A. Reducing the number of T-cells in the rat had no influence on the acute early inflammation but significantly reduced the severity of the chronic disease phase. This is reflected in human clinical trials where reduction of total T-lymphocytes reduces severity; it does not eliminate the disease.

Arthritis is a disease in which cycles of remission and exacerbations occur over the course of the chronic disease. In the rat, if a small amount of PGPS is injected into the ankle, there is an immediate severe flare of inflammation which reaches a peak at 24-48h and then recedes gradually over the next several weeks to a background, chronic inflammation. If a suboptimal dose of cell wall extract is given i.v. at any time one to eight weeks after the initial injection, there is a more modest disease flare which is more amenable to treatment than the severe disease shown earlier. This flare would seem to have mechanistic relevance to the human condition.

The flare model has been used to try to understand some of the molecular mechanisms of the disease process. To implicate the involvement of mediators in this

arthritis, one should fulfill three criteria: measurement of increased levels of the mediator in the diseased tissue, induction or recurrence of disease with the mediator, and blocking progress of the disease with a specific inhibitor.

Dr. Schwab has used recombinant technology to block disease with a specific IL-1 inhibitor. Tissues from an inflamed joint were taken after PGPS injection and placed into culture to isolate fibroblast-like cells. These cells were transfected with a retroviral vector carrying the genome for secreted IL-lra, the IL-1 receptor antagonist, and then injected into the swollen joint of a PGPS arthritic animal. One day later, the arthritis was then reactivated with an i.v. injection of PGPS. The arthritis was blocked, and when the synovial cells were removed 8 days later, the cells still expressed IL-lra mRNA,

Chronic inflammation in joints or other tissues can be induced and maintained by bacterial cell wall products, either during infection or under pathological circumstances, from normal microbial flora. This is an important factor in many chronic inflammatory diseases that has not yet received sufficient attention, and may offer keys to successful treatment.

Peter Hobart (Vical Inc., San Diego, CA, USA) discussed the potential of gene therapy as a means to treat metabolic and infectious diseases in addition to treating heritable defects. Much work in this area has centered on the delivery of gene sequences using viral vectors. An alternative approach, which was the focus of this talk, is the direct injection of plasmid DNA ("naked DNA") into tissues in vivo. This is viewed as a much simpler, presumably more pharmacologic approach. It assumes DNA can be treated as a conventional drug.

Dr. Hobart described how DNA, upon direct injec- tion into muscle (IM), leads to uptake and expression of the encoded gene product. As an example, he reviewed the use of naked DNA to express specific influenza viral antigens by muscle cells as a means to induce a protective immune response to viral challenge. Indeed, transfection using plasmid DNA encoding the nuclear protein core (NP) antigen leads to a long-lived, cross-strain, protective humoral and cell-mediated immunity. This method for developing protective immunity has been extended to other viral diseases using several animal model systems. Recent results of a protection study using an HSV-2 glycoprotein D expression plasmid in the guinea pig model were shown.

To use non-viral DNA for the therapeutic treatment of metabolic diseases, plasmids must be able to express high levels of proteins in transfected cells in vivo. Data was presented showing that plasmid DNAs can be simplified by screening for (and eliminating) sequences that do not positively contribute to enhanced in vivo (IM) expression. In addition, efforts have been made to eliminate all sequences that might complicate use of plasmids in the clinic. Using such streamlined plasmids, new sequences can then be added which manifest a general increase in expression or which confer cell/tissue- specific expression.

These improved plasmid DNAs have since been used for the efficacious delivery of therapeutic proteins in vivo. Initially such improvement was shown by injecting a highly modified IL-2 expression plasmid directly

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into solid tumor tissue and demonstrating, for the first time, tumor regression and animal survival. It is argued that such treatment avoids the inherent toxicity of systemically delivered IL-2 while magnifying its cytokine activity by localizing expression at the site of tumor growth. Moreover, a single injection of an improved murine erythropoietin (mEpo) expression plasmid was shown to raise systemic hematocrits to between 60-70% of blood volume (1.3 to 1.5 times the normal level) for more than 90 days.

In addition to enhancing expression, modifications have been made to plasmid vectors to enable inducible expression via a small effector molecule. The prokaryotic tetracycline repressor protein, whose DNA binding activity is regulated by the antibiotic tetracycline, has been modified for use as a specific and unique

transactivator protein in eukaryotic cells. In animals injected with a plasmid DNA encoding this transactivator and a reporter dependent upon the expression of the transactivator, it was shown that the level of reporter protein could be regulated by the systemic administration of tetracycline. This offers the promise for limiting the expression of a therapeutic protein to a period when it would be most efficacious.

To date, all the scientific meetings of the IRA have been focused on detailed mechanisms of drug discovery. However, for this symposium we changed gears, with the goal of putting the role of drug discovery into a broad context. By examining the past and the present, and placing that experience in perspective, we attempted to address the future and the changes going on right now in drug discovery.