May 15, 2011 (Vol. 31, No. 10)

As Pharma Activities Narrow, Contract Research Organizations Rapidly Increase Their Offerings

In its goal to advance safe, effective, and profitable drugs to market, the pharmaceutical industry has long acknowledged contract research as an essential resource. But as several CROs discussed at Select Biosciences’ recent “Pharma Outsourcing Congress”, the CRO-pharma relationship has been integrally changing in response to pharma’s new challenges and business models.

“To remain competitive, pharmas are being forced to evolve significantly or abandon traditional approaches in favor of new R&D models,” said Simone Braggio, Ph.D., director at Aptuit. “These models are the basis for a new type of relationship built on strategic partnership rather than simple customer/vendor transactions.”

Dr. Braggio noted that big pharma is increasingly partnering with CROs “for more programs and for more types of activities” that previously were conducted by pharma in-house.

Smaller pharmas, too, are benefitting from CROs, which increasingly offer “expertise and technologies not operationally or economically feasible,” allowing these small pharmas to advance molecules to a level meaningful for licensing deals or development partnerships with bigger pharmas.

Clinical Focus—In Early Development

Pharma’s growing trend to involve CROs in ever earlier stages of discovery has encouraged CROs to develop relevant expertise either in-house or through acquisitions. In July 2010, Aptuit acquired the operations of Glaxo­SmithKline’s Medicines Research Centre in Verona, Italy, which has particular strengths in neuroscience, anti-infectives, and cardiovascular therapeutics. Dr. Braggio predicted an increasing move toward externalization by pharma of lead-optimization projects, either in part or entirety.

Aptuit specifically focuses its efforts on parameter assessment that will be meaningful in clinical outcomes. “Traditional lead-optimization strategies are good in designing and selecting candidates that can move adequately from the site of administration into the body—in other words, that survive to Phase 0 or Phase I—but they may not evoke a response in clinic nor be safe enough in the longer term for an adequate risk/benefit balance,” Dr. Braggio noted. “Aptuit’s approach puts a greater emphasis on clinical outcome—in particular, on clinical efficacy and safety.

Strategic Alliances

Since its inception more than 60 years ago, Charles River Laboratories has seen the entire gamut of partnership agreements with pharma. In his talk, David Collins, senior manager, described the range of possibilities of commercial collaborative relationships: from transactional relationships, to preferred provider, to strategic partnering, to alliances between CROs and client pharmas. He noted that which of these is the best fit depends on the particular customer’s specific circumstances, “how mature they are, what their product pipeline is like, and how they are constituted as a company.”

The looming, industry-acknowledged patent cliff will see generics come on-stream as IP protections on branded drugs dissolve, decreasing pharma revenues by as much as 30%, according to some estimates. This is all while pharmas are seeing the “low-hanging fruit already picked,” Collins said, even as the scientific landscape becomes more complex—looking at diseases with intricate etiologies and poorly understood mechanisms while facing the technical challenges of working with complex molecules like biologicals and immunomodulators.

Still, one concern among pharmas in selecting broad-service CROs is that those suppliers may lack the nimbleness associated with focused expertise. To this, Charles River cites the strong intraorganization communication it has developed among active, global working groups with deep expertise in a number of therapeutic areas.

“We can spot trends very early according to patterns in the kinds of requests we receive from our customers. As a global network of various working groups, we can then either see where we already have that expertise or quickly identify how we will develop it.”

In response to a growing demand for earlier-stage discovery work, Charles River has been building its discovery capabilities over the last three years, with the acquisition of Piedmont Research Center and Cerebricon, augmenting its range of efficacy models. Indeed, over the last decade, Charles River has strategically made numerous acquisitions preemptively to broaden its capabilities from discovery through early-stage development.

In response to growing demand for earlier-stage work, Charles River has been building its discovery capabilities through a number of acquisitions.

CROs Face Future Head On

  • The nature of the CRO-pharma relationship is integrally changing, given increasing streamlining of focus within pharmas.
  • CROs are now being recruited for services at ever-earlier stages in the discovery process. To ensure the ability to meet this new demand, CROs are developing expertise either in-house or through acquisitions.
  •  A requirement for assessing clinical relevance in earlier-stage assays is a demand CROs must address.
  •  A move toward specialization of function is being seen in most CROs, setting the stage for a contribution of innovation unprecedented from times past, when CROs provided mainly routine execution services.
  • In silico and computer-assisted discovery and development is critical for CROs to meet changing customer demand for data quality without compromising throughput.

Specialization a Clear Trend

Still, CROs that effectively span the full range of drug discovery and development services are an elite group. Most CROs continue to provide some means of specialization. Prestwick Chemical expressly focuses on medicinal chemistry. In his talk, Bruno Giethlen, Ph.D., CSO, stressed that the function of medicinal chemistry must always be to advance likely candidates for testing and eventual registration, never synthesis for its own sake.

Prestwick’s customers are not likely to have already designed their compounds, as those seeking med-chem help traditionally have been, according to Dr. Giethlen. The company proposes and designs compounds in-house, communicating with its clients about research priorities in order to complement customers’ own competence and create synergies.

To do so, Prestwick combines traditional med chem with more modern methods such as computational chemistry and structure-based, or ligand-based, design. The firm shares executive managerial ties with in silico discovery company Inte:Ligand, allowing co-development of specific software capabilities as needed to respond to the CRO’s customers’ needs.

Interestingly, Prestwick does run some of its own drug discovery projects but never in areas that overlap with customer pipelines; furthermore, the company seeks only to bring these projects to preclinical stage, with the goal of establishing eventual licensing agreements. This is the business model adopted in an agreement with Merck Serono announced in January this year, focused on a modulator of metabotropic glutamate receptor mGluR4 to treat Parkinson disease. “We completed a license agreement with Merck Serono after we co-developed this compound with Domain Therapeutics” Dr. Giethlen explained.

Still, the company’s main focus is to provide its med-chem expertise, informed by computer-assisted drug design and in silico screening, to help its customers select from among their lead scaffolds those compounds with “more affinity, selectivity, bioavailability, and less toxicity, as quickly as possible.”

A decade ago, he observed, CROs might be given more than two years to get a project running; now pharma customers expect go/no-go decisions every three to six months. “Prestwick Chemical applies its med-chem skills to improve compounds with very rapid turnaround. For this, cheminformatics is absolutely essential, as is solid communication with the client on a frequent and regular basis, to ensure that assay development—which we do not do in house—renders information that will directly influence the likelihood of getting lead candidates successfully through clinical trials.”

Prestwick Chemical augments its med-chem expertise with computer-aided drug design and in silico screening to help customers select compounds with more affinity, selectivity, bioavailability, and less toxicity.

Ion Channels: Niche Focus

Olaf Scheel, Ph.D., CSO at Cytocentrics, also noted major reorganizational changes in big pharma, as well as “significant budget restrictions.” This comes in an era when the number of potential assay applications is actually dizzying. Furthermore, the delicate inverse relationship between throughput and data quality persists, all of which is “creating a demand for division of work between pharmas and CROs.”

This affords a growth opportunity for CROs focused on customer-identified critical skills. Cytocentrics has expertise in ion channels and patch-clamp methods. The company also offers its in-house-created CytoPatch™ instrument, an automated whole-cell patch-clamp device for voltage- and ligand-gated ion channels “optimized for flexibility and for data quality similar to that obtained with manual patch clamps,” while the platform’s modular design addresses demand for higher throughput.

With a dedicated pipette designated for gigasealing, separate from the cell-capture component, and its capacity for continuous perfusion, the CytoPatch device allows high gigasealing and cell stability, permitting readings even for ion channels that may be slow responding to various test compounds, such as the hERG ion channel; yet the CytoPatch is also capable of fast compound application as needed for fast-desensitizing ligand-gated channels.

The device is offered as a standalone product to pharmas—and to other CROs, illustrating an intra-CRO cooperation also on the rise in the contract research sphere.

According to Cytocentrics, its CytoPatch instrument offers flexibility and data quality comparable to the manual patch clamp. Several single devices can be easily connected to form one multichannel system to increase throughput.

Integral Partners

Katya Tsaioun, Ph.D., CSO of Cyprotex, likens the pharmaceutical industry to the auto industry, given the unravelling of vertical integration and the movement toward specialized function each has seen.

For the most part, Dr. Tsaioun believes that niche CROs make the most sense “because no single organization, not even the largest pharmas, can now actually buy that much expertise. To get a compound from concept to market requires an enormous amount of very diverse expertise,” from basic biology and chemistry to pharmacology, formulation, animal toxicology, human toxicology, regulatory affairs, marketing, commercialization, and manufacturing. “The pharma industry is thus moving away from vertical integration and disaggregating its functions.”

The resulting demand for specialized expertise has pharmas turning to CROs, allowing pharmas’ research teams to focus on their core strengths. Dr. Tsaioun noted numerous other benefits of working with CROs, including expertise setting up the purpose-designed platforms and/or the assays that are outsourced, in turn saving on hiring and training time; assay validation; expertise to rescue failed or failing projects; and enough specialized knowledge to predict what assays might be needed downstream.

“A main scientific challenge is to combat the growing trend of failure in late stages of development or once in the market, either of which is hugely expensive,” Dr. Tsaioun said. “While failures due to pharmacokinetics have fallen dramatically over the last decade, failures due to adverse events in humans and to lack of efficacy are increasing.”

This highlights the need for better animal and human tissue models, along with better translation to human disease, as well new toxicity-assessment tools that can be applied early to reduce late attrition.

For example, Cyprotex has invested “massively into our highly automated ADME screening platform and into our CellCiphr™ high-content toxicology assays. At the scale and level of refinement that we have pursued, it wouldn’t make sense for even the world’s biggest pharmaceutical companies to invest at this level. By aggregating the volumes of hundreds of pharmaceutical companies, as a CRO, we see economies of scale that not even the large pharmas can feasibly attain,” according to Dr. Tsaioun.

As for addressing pharma’s need for earlier predicted eventual clinical relevance, Dr. Tsaioun cited various dedicated Cyprotex screening panels expressly designed for preclinical animal toxicity (rat primary hepatocytes) versus human-responsiveness panels—since not all toxicity mechanisms translate between animal and human assays. This alone can save customer companies hundreds of thousands of dollars, she claimed, given that proper IND-enabling studies cost roughly $1 million per compound.

“For years, the CRO industry was scientifically dull; we just executed. Now we are deeply involved in process innovation, frequently acting as an extension of pharma companies’ R&D teams. In the future, there will be nimble, fast-on-their-feet drug discovery companies spun out from universities, led by entrepreneurial leaders.”

Big pharma will continue to apply its decades-long expertise in managing drug portfolios—identifying markets and patient populations, determining manufacturing economics, assessing development-capacity and marketability of drug candidates—but, according to Dr. Tsaioun, it will be the CROs that “will innovate on how to get drugs from idea to FDA-approval quickly and cost-effectively, with the lowest risk of late failure.”

Example of CellCiphr compound-toxicity profiling at Cyprotex: HEPG2 cells were treated for 24 (A) or 72 (B) hours with a positive control. The cells were then stained with DNA stain (blue), antitubulin antibody (green), and mitochondrial dye (red, seen on image as yellow due to overlay over tubulin dye). Panel C shows toxicity ranking and classification (H-high, M-moderate, and L-low risk).

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