Science and TechnologyWritten evidence submitted by Professor Anthony G M Barrett and Professor R Charles Coombes

1. Introduction

1.1 The Coombes and Barrett groups at Imperial College London have a major programme of drug discovery to address the urgent clinical need of treating tamoxifen-resistant breast cancer.

1.2 Breast cancer is the most common cancer in women in the western world, and 80% of breast cancers contain estrogen receptor. Tamoxifen is the standard treatment for endocrine sensitive breast cancer. However, whilst curing 28% of people who are given it as an adjuvant to surgery for primary breast cancer, it is commonly followed by the emergence of resistant cells, despite the fact that these emerging breast cancer cells, which are often in metastatic sites still containing estrogen receptor, the very target of the drug. The new generation of aromatase inhibitors, which act by inhibiting estrogen biosynthesis and thereby preventing estrogen receptor activation and which appear to be more efficacious than Tamoxifen, are also subject to the development of resistance. The National Cancer Institute (USA) noted that in the USA in 2007 there were over 180,000 new cases of breast cancer diagnosed with over 40,000 deaths. The comparable figures for the UK are 44,000 and 12,500 respectively. In 2007, the total numbers of newly diagnosed breast cancer patients in the seven top pharmaceutical markets in the world exceeded 450,000. Breast cancer is the most common cause of all deaths in younger women aged 35–54 years, accounting for 17% of all deaths. The high incidence of breast cancers and the attendant morbidity and mortality are major drivers for the identification of novel drug treatment regimes.

2. Key Questions

2.1 What are the difficulties of funding the commercialisation of research, and how can they be overcome?

2.1.1 Pharmaceutical discovery and the optimisation, development and ultimate commercialisation of new medicines is complex, very expensive and a process that takes at least ten years from concept to first sales. Most drug discovery programmes fail in the pre-clinical stag or later, and at much greater financial losses, in clinical trials. None-the-less there is much unmet medical need and the quest for new medicines to treat these diseases must continue. As stated above, breast cancer is one such disease that causes immense damage to the quality of life to the citizens of the UK and its economy.

2.1.2 Globally drug discovery is rapidly changing. The big pharma companies such as Pfizer, GlaxoSmithKline, AstraZeneca and others are leaving drug discovery rapidly and their exit will be complete in the next five to 10 years, perhaps sooner. The recent closure of Pfizer Sandwich and downsizing of AstraZeneca are not unusual events but are part of the inevitable global process. The trillion-dollar question is whatever next and where will the medicines of the future come from? Will pharmaceutical innovation be totally lost to the UK and the UK pharmaceutical industry, worth many billions to the UK economy, become another smokestack memorial.

2.1.3 The medicines of the future will be discovered in biotech companies, contract research organisations (CROs), laboratories funded by medical charities and a limited number of universities, which assemble the correct integrated teams of scientists and clinicians. The UK now has a very successful biotech and CRO sector including companies such as Biofocus-Galapagos-Argenta and Peakdale Molecular. In addition several universities including Imperial College London are assembling drug discovery and development teams. However, their outputs need to be taken further along the clinical pipeline and ultimately into market. Big-pharma companies, with their new strategies, are only interested in late-stage clinical assets with focus on compounds that have passed successfully through at least phase-2A, proof on concept in patient, trials. The Research Councils and medical charities in the UK such as the Wellcome Trust and Cancer Research UK do not cover the costs of all stages of drug discovery and development to a phase 2A clinical trial. As such there is a potentially catastrophic gap in funding that is disadvantaging pharmaceutical innovation in the UK. Funds that once existed to facilitate spinout companies from UK universities, such as the London Technology Fund, have insufficient resources to cover the gap.

2.1.4 Her Majesty’s Government can best assist in addressing the critical funding gap for the new pharmaceutical industries and parallel academic groups in the UK, by leveraging public recourses with sources of private equity with the offices of organisations such as the London Technology Fund and other regional funds. Although the UK has yet to catch up, there is again considerable appetite in the USA for the funding of early stage drug discovery. A recent example is Warp Drive Bio in Cambridge, MA, USA, which raised a commitment of $125M to fund early stage drug discovery from a consortium of SanofiAventis and 2 venture capital firms, Third Rock Ventures and Greylock Partners.1

2.1.5 It is also germane to note that several USA have been extraordinarily successful in drug discovery including Northwestern University with the blockbuster Lyrica, marketed by Pfizer; Emory University with a portfolio of antiviral drugs Emtriva, Emtricitabine, Epivir, Lamivudine, Reverset, Racivir and Elvucitabine marketed by Gilead and GSK; and Princeton with Alimta marketed by Lilly. All these very valuable innovations were discovered in universities with Federal support from the National Institutes of Health. UK universities including Imperial College have integrated drug discovery teams in place but face the funding gap, preventing realization of medical and commercial value.

2.2 Are there specific science and engineering sectors where it is particularly difficult to commercialise research? Are there common difficulties and common solutions across sectors?

As is stated above, there is a funding gap in pharmaceuticals between the pre-clinical discovery phase and phase 2A clinical trials. It would be a fatal mistake to assume there is a common solution across sectors. For example, the start-up to IPO or trade sale stage for an IT or electronics material company is usually much shorter than the 10 years plus time frame for pharmaceuticals.

2.3 What, if any, examples are there of UK-based research having to be transferred outside the UK for commercialisation? Why did this occur?

The Coombes and Barrett teams have assembled a portfolio of potential drugs to treat breast and other cancers including their most advanced candidate, BS-194, which is now in late-stage preclinical studies and is now nearly ready to enter phase-1 clinical trials. Both sought to raise money in the UK to take this important compound into man in the UK itself, but these efforts were unsuccessful. As a result, they arranged for clinical trials to be undertaken in the MD Anderson Cancer Center in Houston, Texas. This is especially disappointing, from the UK’s perspective given the fact that Coombes operates one of the most important cancer clinical centres in the UK. In January 2012, Barrett met with venture capital funders in the USA from both California and Massachusetts to discuss the transfer of other drug candidates from the IC group for development in the USA.

2.4 What evidence is there that Government and Technology Strategy Board initiatives to date have improved the commercialisation of research?

Translational activities from the MRC have been useful in addressing some of the problems in the pharmaceutical arena. However, their remit has not allowed for adequate resourcing with partner organisations in the private sector including venture funds to facilitate adequate return on early stage drug discovery in the UK universities.

2.5 What impact will the Government’s innovation, research and growth strategies have on bridging the valley of death?

There is not a straightforward answer to this question. It all depends on how the money is actually spent. In the area of pharmaceuticals, the Government should seek advice on how this money is utilised by involving senior scientists and business development managers not from big pharma but from successful biotech and CROs such as such as Biofocus-Galapagos-Argenta and Peakdale Molecular, venture funds with considerable focus on the pharmaceutical arena such as MVM Life Science Partners, as well as reinvigorating regional funds such as the London Technology Fund. The appetite for venture capitalists for early stage pharmaceutical discovery should move across the Atlantic and the Government’s innovation, research and growth strategies could impact to accelerate and amplify the availability of these large funds in the UK.2

2.6 Should the UK seek to encourage more private equity investment (including venture capital and angel investment) into science and engineering sectors and if so, how can this be achieved?

Yes this can be achieved in the pharmaceutical sector with favourably tax and coordinating efforts with medical charities, biotech companies and the Government being aware of funding amplifying possibilities by parallel investments from funds associated with big pharma companies, as they exit drug discovery but still need late stage clinical assets to take to market, as well as venture funds as they move back into early stage pharmaceutical discovery in the UK. Replication of the early US start-ups such as Warp Drive above would be an excellent outcome for the future of the pharmaceutical sector in the UK. Our view is that it is not realistic to expect angels to fund the pharmaceutical sector (or any other capital intensive sectors), even with generous tax breaks. They do not have the resources to keep up with multiple rounds of funding, and therefore—even with successful companies—will be heavily diluted. As a result, angels prefer companies with lower capital requirements and, in order to avoid the risk of failure inherent in start-up and early stage investing, they also prefer growth and other later stage investing.

2.7 What other types of investment or support should the Government develop?

In the pharmaceutical sector, the most important issue is the long time lines. It is crucial that Government support is not one off but continuous for more than a decade. The pharmaceutical industry in the UK has been of immense importance over the last 40 years. Its continued presence in the UK is now very fragile and, with appropriate support, could remain a main sector in the UK for the next 40 years.

3. Declaration of Interests

Barrett is the one of the founders of Argenta Discovery, which is now part of Biofocus-Galapagos-Argenta. He no longer has any material involvement in the company. He is on the Scientific Advisory Board of the London Technology Fund. Barrett is a co-founder and shareholder of Pulmagen Therapeutics, a company in the MVM Life Science Partners portfolio. Coombes is a shareholder of Pulmagen Therapeutics.3

February 2012

1 http://en.sanofi.com/Images/29392_20120110_BIOLAUNCH_en.pdf

2 www.biofocus.com/; www.argentadiscovery.com/; www.peakdale.co.uk/; www.londontechnologyfund.com/; www.mvmlifescience.com/

3 www.mvmlifescience.com/portfolio/detail.asp?pid=6

Prepared 11th March 2013