BIOPHARMACEUTICALS: a critical and growing sector

The global pharmaceutical market continues to experience high growth. Significant R&D efforts and innovative new treatments from smaller biotech companies are fuelling innovation for big pharmaceutical firms and for the market in general.

The global pharmaceutical market is forecast to grow to US$ 842 billion in 2010, an equivalent CAGR of 6.9% over the next five years. Drug companies have enjoyed extremely high returns on investment capital in recent years as well as a favorable company survivorship rate compared with many other industries, notes investment author and economist Larry MacDonald.

Demographic trends suggest the need for growth in the pharmaceutical sector to support future medical needs – particularly in Anavex’s areas of focus. In North America, the aging of the “baby boom” generation is already enhancing the demand for new, disease-modifying treatments for serious age-related diseases such as Alzheimer’s and cancer. Meanwhile, the rise of new middle class populations in emerging markets, such as China, India, Russia and Brazil, has created a vast new international market for the best medications available. Companies that can help to satisfy such needs are poised for enormous success.

A new generation of drugs

Alzheimer’s disease
According to the Alzheimer’s Association, by 2030, it is estimated one out of 8 people over age 65 will have Alzheimer’s Disease (AD) and nearly 50% of those over 85 will be affected. Now, more than ever, it is critical for researchers, industry drug developers and regulators to work together in order to bring disease modifying therapies for AD to market. According to a study performed by the University of Connecticut, the successful development of disease modifying drugs for Alzheimer’s could potentially save the U.S. Healthcare system an estimated $4 trillion.

AD is considered to be a healthcare system ‘time-bomb’. Medications on the market today only treat the symptoms -- they do not have the ability to stop the onset nor progression. Meanwhile, the majority of AD treatments currently in development are focused on reducing or dissolving amyloid-beta plaques. Recently, there were several well-publicized failures of those potential amyloid-removal therapies. They included Neurochem’s Alzamed, Myriad Genetics’ Flurizan and Lilly’s semagacestat. Vaccines that clear amyloid-beta plaques, such as Wyeth/Elan’s AN-1792, have also failed to impact the disease, while tau therapy (methylene blue) is considered by many to be based on highly questionable science, is not reproducible and fails to impact the cause. Monoclonal antibodies have also failed to show significant benefit in Phase 2 studies across the range of Alzheimer’s patients. Recently, Medivation/Pfizer’s Dimebon, an off-patent anti-histamine, failed in Phase 3 clinical trials.

Most of the many hundreds of studies underway on AD drug candidates are testing different versions of existing drugs. While 50 or so novel compounds are being studied, most are in big pharma pipelines or are tied up under existing partnership agreements. Typically, no small companies with compounds that have successfully cleared Phase 2 clinical trials are left unpartnered with big pharma.

Epilepsy
It is estimated that 50 million people are living with epilepsy worldwide, according to the International Bureau for Epilepsy. New drugs that could potentially modify the onset and progression of epilepsy are needed and may have blockbuster potential. Such drugs would have a novel mode of action that combines anti-amnesic, anxiolytic and neuroprotective properties, as well as excellent safety and tolerability profiles. Anavex is currently developing drug candidates seeking to deliver these properties.

Cancer
Cancer is projected to become the leading cause of death worldwide in the year 2010, according to the World Cancer Report from the International Agency for Research on Cancer. Cases of cancer doubled globally between 1975 and 2000, will double again by 2020, and will nearly triple by 2030, says the report. There were an estimated 12 million new cancer diagnoses and more than 7 million deaths worldwide this year. The projected numbers for 2030 are 20 to 26 million new diagnoses and 13 to 17 million deaths. Currently available treatments are not accessible nor effective for many patients, and have limited impact on survival for patients with metastatic disease. New treatments with novel mechanisms of action that can overcome resistance mechanisms, inhibit tumor cell proliferation, and trigger tumor cell death could offer greater therapeutic benefit and improved survival. The Anavex program is seeking to deliver such profiles in it’s drug candidates. Given the substantial unmet need in cancer, such agents may have the potential to become blockbusters.