Novartis takes rare road to cures

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Novartis takes rare road to cures

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By Tom International Herald Tribune

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FRIDAY, JULY 8, 2005

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Switzerland & sort=swishrank> BASEL, Switzerland Generally, pharmaceutical

companies compete to develop the next blockbuster drug for diseases that

affect large numbers of people.

So, when Novartis in May trumpeted an advance in tackling Muckle-Wells

syndrome, a rare inflammatory disease which causes skin rashes, it took some

industry analysts by surprise.

The excitement at Novartis was not driven purely by altruism, however.

From its headquarters nestled on the Rhine in the Swiss town of Basel,

Novartis is pioneering the use of rare diseases, like Muckle-Wells, as a

testing ground to help find cures for larger - and more profitable - areas.

It's a strategy, that Vasella, Novartis' chief executive, hopes will

make it quicker, and possibly cheaper, to develop innovative new drugs.

" It's a change in focus, " Vasella said in an interview. " In the optimum case

it will take out one year or two years " from a drug's development time.

Like Novartis, most drug companies are scrambling to find cheaper ways to

make drugs. Costs have soared in recent years - to about $1 billion for a

single compound - as safety concerns pushed regulators to demand more

rigorous tests, which can take up to a decade.

Driving Novartis's new focus are recent advances in genetics, which have

allowed scientists to better understand the molecular similarities, or

" pathways, " between different diseases.

Traditionally, pharmaceutical companies have tested drugs by targeting a

single gene or protein.

What Novartis wants to do, Vasella said, is understand how a chain of genes

may be at the root of several diseases.

" If you know that there's a common pathway between two diseases, then of

course the chance that a medicine works in both is very, very high, " he

said.

Novartis is certainly not the only company focusing on genetics. But it has

been at the forefront of using new science, analysts say.

Pascal Franc, an analyst with Pictet, a private bank in Geneva, said it was

too early to evaluate the results. " It will take a few years for these

compounds to reach late-stage development, he said.

The drug development strategy is the brainchild of Mark Fishman, a former

Harvard professor whom Novartis hired in 2002 as its head of global

research.

To strengthen its links with academics, Novartis set up a new global

research center in Cambridge, Massachusetts, headed by Fishman. Since

opening, the center has hired 800 scientists, many of them from academia.

Muckle-Wells illustrates how Novartis hopes to make Fishman's research work

to its benefit.

Normally, the company would not focus on such a rare disease. But genetic

research showed the protein that causes Muckle-Wells may also be active in

people with rheumatoid arthritis - a much larger group.

Early stage drug testing, known as Phase 1, is normally done in healthy

volunteers to check whether a drug is safe. Only later is the drug tested on

people with the disease.

By using ill patients, such as with Muckle-Wells sufferers, Novartis hopes

to find out more quickly whether a drug works, and save money by terminating

studies if results are negative.

The success with Muckle-Wells " gave us the confidence to test this compound

in larger more important diseases, " said Jorg Reinhardt, head of development

at Novartis.

Novartis acknowledges that it runs a risk by putting resources into rare

diseases if this does not translate into breakthroughs on larger drugs.

The company will still have to go through large late-stage clinical trials

involving hundreds of patients - the stage at which most drugs normally

fail.

" They may speed up Phase 1, but they're still going to have to work out

safety issues, " said Mark Monane, an analyst with Needham & Co., an

investment bank in New York.

Novartis, like its rivals, has to face a tougher regulatory environment

since safety concerns forced Merck to withdraw its arthritis drug Vioxx.

" We see a slowdown in approval rates, " at the U.S. Food and Drug

Administration, Vasella said.

Still, Novartis has done a better job than many drug companies at developing

new medicines in the past few years. In 2001, the FDA approved in record

time its blood cancer treatment Gleevec, now one of its largest sellers.

Another colon cancer drug, known as PTK/ZK, which Novartis is developing

jointly with a German company, Schering, suffered a setback this year when

trials failed to reach statistical significance.

Trials are ongoing and the drug has a " 50 percent chance " of making it to

the market, Vasella said.

On LAF237, Novartis' much-awaited diabetes drug, Vasella said he hoped to

finish late-stage trials by the end of the year, and file for approval in

2006.

While Novartis still makes most of its profits from patented drugs, it

recently became the largest generic drug producer in the world after buying

Germany's Hexal and Eon Labs of the United States.

Vasella brushed aside criticism that it is hard to make money from generics,

cheaper versions of branded drugs that have lost patent protection.

Selling generic drugs, especially with U.S. and European health care systems

under such pressure, is " complementary " to selling patented medicines, he

said.

Novartis is also developing its philanthropic work, Vasella said, spending

$570 million last year on such initiatives as combating malaria,

tuberculosis and dengue fever in the developing world.

But even in these not-for-profit areas, Novartis is putting its new drug

development strategy to work.

Dengue shares many of the same genetic pathways as common liver diseases

like hepatitis C, said Herrling, head of corporate research.