Getting Clinical On New Drug Launches

Posted May 13th, 2019 in Pharma industry, R&D Productivity | Leave a comment

The IQVIA Institute released a data-rich report in April 2019 on the state of clinical R&D in the US pharmaceutical industry titled “The Changing Landscape of Research and Development: Innovation, Drivers of Change, and Evolution of Clinical Trial Productivity”.  The report is a fascinating deep-dive into lots of data cuts around what’s going on.

The increasing role of biotech in marketing their own drugs was the subject of much of the coverage on the report (here, here), which is indeed an interesting trend to see.  But rather than opine on that observation or the full scope of the report, I wanted to highlight a number of findings, largely glossed over elsewhere, relevant to the state of clinical trial activity and approvals that are relevant to biotech investors.

With clinical trial activity in the industry up 35% over the past few years, with over 4700 trials starting in 2018, it’s worth looking at some of the clinical trial metrics, especially since the features of clinical trials, such as the number of arms, numbers of patients, and years of trial follow-up are major drivers of costs.

Before diving in, some context on the data in the report: IQVIA tracks all the New Active Substances (NASs) that were launched in the US in 2018 (irrespective of what year they were approved). This includes 59 NASs for 2018, roughly half of which were orphan disease drugs. Here are a few of the key findings as they relate to clinical trial activity.

Features of the clinical trials in the regulatory approval packages:

  • Randomized controlled trials (RCTs) clearly remain the gold standard for approval: nearly 90% of drugs included RCTs in their regulatory packages.
  • Trials with active control arms are more common today, and were included in the regulatory filings of nearly half of these new drugs (46%), versus only 20% a few years ago. This highlights the increasing importance of comparative effectiveness in disease indications where existing standards of care are in place.
  • Only one registrational trial was required in over 40% (25/59) of these approvals; so much for the old “two well-controlled Phase 3 trials are required” regulatory guidance of the past.
  • Only Phase 1 or 2 studies did the trick in 12% (7) of the drugs’ approvals; these had no Phase 3 studies, so are obviously special situations.

Magnitude of patient exposures and time. 

  • There’s a huge range in the number of patients in these regulatory filings, as captured by the distribution below which was derived from the report. Roughly half of the approvals had fewer than 500 patients treated.

  • On the small end of the distribution, five drugs were approved with fewer than 100 patients of data. All were, as expected, orphan drugs. Four of these were approved on the basis on only a single trial. The 5th was elapegademase for ADA-SCID, which was approved on the basis of only 10 patients in two registrational trials!
  • The average number of patient-years of exposure supporting new drug launches between 2016-2018 has been 1800-3800 patient-years. Patient-years of exposure is often an important metric for understanding safety in particular, but also durability of efficacy
  • Orphan drugs had, on average, around 1000 patient-years of therapy over that period. While smaller than the non-orphan drugs, as expected, it’s not as small as I might have thought (e.g., could be 200 patients followed for 5-years of treatment or 5-years post-cell/gene therapy)
  • Collectively, achieving this magnitude of patient exposures has required a significant amount of development time: the cumulative years in the clinic and registration remains long and hasn’t changed as the average in recent years is approximately 12+ years. This rough average time holds for both orphan drugs and non-orphans, interestingly.
  • Although registrational trials for orphan drugs often include far fewer numbers of patients (about 5-fold fewer, ~430 vs ~2300 patients enrolled), these R&D programs still typically require long durations: in fact, the average trial duration for orphan drugs is actually 12% longer than for non-orphans, based on the 4-year averages (7.6 years vs 6.7 years). This was a surprising finding, and presumably reflects the broad range of orphan indications beyond just rare monogenic diseases.

These metrics highlight important aspects of the current clinical landscape.  Integrating these with our experience as early stage investors, and a few key takeaways emerge:

  • Active comparators with RCTs, even for orphan drugs in crowded classes, will likely be even more common going forward. Understanding comparability versus standard of care as early in development as practical will be increasingly important. Trying to run trials without them to save capital is not a recommended approach; plan the right study and convince investors to fund it, rather than cutting corners.
  • Single arm trials, poorly controlled, will continue to face challenges – as we all know from history. In cancer studies, this often leads to false positives, and thus late stage failures over time.  When they are used in rare orphan diseases, there are frequently no relevant long-term natural histories to rely on, creating further concerns. In these settings, companies should invest early (while in preclinical) to set up observational clinical studies aimed at creating adequate historic controls and benchmarks.
  • Going forward, we should expect that drug approvals will likely require ~1000 patient-years of exposure for “mainstream” orphan indications, and at least 2-3x more than that in non-orphan drugs. Gene and cell therapies with dramatic effects can be expected to have shorter aggregate exposures, but benefit from a constant accrual of patient-years even after a one-and-done intervention.
  • While special situations exist, unless there’s dramatic efficacy in early trials, very few drugs have or will be able to jump from Phase 1 or 2 straight to approval. It’s worth skeptically pressure-testing any pitches from teams that claim this expedited straight-to-approval approach is their base case plan.
  • Orphan drugs, while more efficient in some ways, are not dramatically faster in clinical development than non-orphan programs, due to the need to accumulate patient-years of safety and efficacy data from smaller overall patient numbers.

Thanks to the team at the IQVIA Institute for a stimulating and thought-provoking read.








An Encyclopedia Of Advice For Startup Boards

Posted May 6th, 2019 in Biotech startup advice, Boards and governance | Leave a comment

Startups management teams often have a love-hate relationship with their Board of Directors: while Boards can be hugely helpful and constructive in the best of times, they can be dysfunctional and damaging in the worst. And most CEOs enjoy complaining about their Boards, even if just for entertaining effect on conference panels and the like.

But it is critically important for every CEO (and lead investor) to work together to best optimize the way a startup Board interacts with a management team. As a venture creation firm, we spend a lot of time engaging with our CEOs around board governance and strategy.

In 2012, under a post titled “High-Performing Boards in Early Stage Biotech”, I outlined nine themes of good Board management: insist on a prepared board, set the context, right-size your board, get independents onboard, include the senior management team, ensure quality Exec sessions, communicate frequently off-cycle, make your board work for you, and never have surprises.  These all remain true and agnostic to sector.

I’ve been asked multiple times to blog more on these Board-related topics; thankfully others have already done it.  And done it far better than I could.  Mark Suster, a partner at a tech venture firm called Upfront Ventures and world-class blogger, has recently delivered a veritable encyclopedia on the topic on his blog “Both Sides Of The Table.” It’s a lengthy multiple-blog series on “Startup Boards” that is exceptionally well done, covering nearly ever topic you can think of about Boards.

Here are some of the topics with links:

I won’t rehash them all as they are quick reads, but these are all excellent and worth reviewing if you are new to the boardroom dynamic, or want to refresh on the topics. Mark really covers a lot of ground.

Three of the posts warrant special attention.

  • How to Stop Your Board Meeting From Going Down a Rathole. This is a classic and a must-read, as it is a wonderfully colorful review of some common Board Director phenotypes: the “Detail Merchant”, the “Negative Nelly”, the “Distracted Senior citizen”, the “ADD Director”, and the “Ally”.  I could convert these phenotypes into more biotech-specific labels, and poke fun at my own data-obsessed profile, but Mark’s labels are generally applicable. I’ve certainly seen them all in boardrooms over the last 15 years. I would encourage fun-loving, risk-taking CEOs to come up with name cards with these phenotypes and assign them to their respective directors; that may go over well, or not.  But it would be fun nonetheless.
  • Who Should Be On Your Startup Board? Mark’s piece covers lots of tech nuance around founder control, types of VCs, types of Board members. The reality is biotech is typically very, very different. On the “expertise” aspect of Board evolution, we often recommend that Series A and early stage biotechs have at least two independent directors involved with expertise in both drug R&D and business development/fundraising. Science-first early stage biotechs need advice on those two topics more than anything else. As companies progress towards the public markets, bringing on financial/accounting expertise to fill out an audit committee is important. And as programs advance into the middle of the clinic with an eye to the market, commercial strategy and marketing expertise is worth adding.
  • Eliminating Electronic Distractions from Board Meetings. There are lots of ways of minimizing electronic distractions that are very practical – no computers please, no iPads please, no phones please, etc… And Mark reviews lots of good strategies in this blog. But let me just say this, without it excusing suboptimal director behavior… especially since I’m guilty of multi-tasking on my phone under the table on occasion in board meetings… the best strategy for eliminating distractions is to make the board meeting less boring and more engaging. Boredom for a director can be caused by many things, but a few examples are worth mentioning. The most common one is this: I’ve read the 100+ page “pre-read” deck in detail, so why are we walking through every word of every page? Can’t we just jump to the important data or strategic discussion?  Or, another variant might be that we discussed a particular point in detail during our pre-board one-on-one meeting, so why are we belaboring here if we’re all in agreement already? Or, an all too common one related to the point above, but why is my fellow director going down that irrelevant rathole (… and therefore I’ll take a moment to peek at my phone)? Many others come to mind. But director boredom is often the primary catalyst of distractions, perhaps amplified by the attention deficit phenotype of many investor-directors (like me).

Two other Board-related points are worth making in addition to all the great Board advice that Mark’s series shares.

First, creating a constructive board dynamic at the inception of a company is important, as the precedence-setting nature of the interaction manifests over time.  Thiel’s law for companies for the most part also applies to Boards specifically: a Board messed up at its foundation cannot be fixed.  So getting into the right habits as a Board, including “good hygiene” around non-CEO Executive Sessions and the like, is really important.

Second, I’d also emphasize the prominent role of emotional energetics in the boardroom, and the importance of managing them: balancing the emotions of fear and greed. Fear of losing your shirt leads to a defensive posture from many investor-directors, and even preliminary negative data (common in drug R&D) shared out of context can augment those emotions. And greed leads to demanding far more from a story than it’s actually worth, frequently attended by dreams of “we’re the next Genentech” and “these data are by far best-in-class.”  Great CEOs are good at stabilizing that unfavorable energetic state of balance between those two, which helps lead to optimal Board discussions and decisions over time.

Since so much has been covered by Mark’s series already, I’ll stop here. But feel free to ping me if there are other Board-related topics worth covering here at LifeSciVC.