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Adding DNA to the Rx mix
Sep 01, 2000 08:04 AM ET
By Ray Bolger, LocalBusiness.com
NEWS ANALYSIS BALTIMORE, Sept. 1 (LocalBusiness.com) -- Every day, doctors all over the country try to match drug prescriptions to patients with a mix of scientific reasoning and guesswork that rarely works more than 65 percent of the time.
For patients, it can mean long, painful and expensive delays in finding the right treatment. Some even die from a toxic reaction to the wrong drug. For the insurance industry, the haphazard formularies cost hundreds of millions of misspent dollars.
Until now, those so-so odds and steep costs have been widely accepted as an unavoidable part of the imperfect -- but steadily improving -- world of prescription medicines. But a group of fledgling U.S. companies say they've found the key to unlocking the door to identifying which drugs are designed to deliver the maximum benefit for each individual patient. It's called pharmacogenomics, and dozens of companies are painting a beguiling picture of the potential profits to be made.
While the Human Genome Project has gone a long way in developing a genetic map of "normal" Homo sapiens, no one in fact is "normal." Each individual's genetic makeup has variations, and some of them are associated with disease or with differing sensitivities to various drug therapies. Pharmacogenomics, related to the overall genome mapping project, aims to enable physicians to pinpoint correct dosages of a drug therapy for specific patients based on their genetic profiles. It also promises to determine which persons are among a minority segment of the population for which a widely beneficial drug is toxic.
"Currently, drugs are prescribed based on population averages," says Dr. Tony Frudakis, chief scientific officer of DNAPrint Genomics Inc., based in Sarasota, Fla. "If the percent of patients that have these bad reactions is low enough, they are prescribed, and basically, you roll the dice when you take your medicine."
The human cost
This is not a minor problem, according to Dr. Rick Sheridan, vice president of information science for PPGx, a Morrisville, N.C.-based company working in the field. According to the New England Journal of Medicine, drug reactions related to genetic variation cause an estimated 100,000 deaths a year, Sheridan says. The problem is particularly troublesome among the elderly, who frequently take up to seven drugs a day.
DNAPrint Genomics is evaluating DNA to uncover similarities among people with bad reactions to common drugs. Using sophisticated algorithms, the company will compare the genetics of those whose livers don't tolerate certain anti-cholesterol drugs, for example. When getting funding for his company, Frudakis conducted a virtual genetic tutorial for Craig Hall, director of corporate analysis at Tampa Bay Financial, a venture capital firm with a biotech and high-tech focus. Frudakis even took Hall to a San Diego biotechnology conference.
Hall admitted that funding pharmacogenomic firms is a risk. His company, which specializes in seed capital, put $1 million in DNAPrint and has a commitment for more as milestones are reached. Quantifying the risk is difficult, he said. "Normally, you can look at a company, their revenues, profit margin, its benchmarks," Hall said. "But in a field in its nascent stages, that is really hard."
One of the questions investors ask about a pharmacogenomics company is where the company is in the R&D process. Later stage research is going to be far less speculative than early stage, and therefore would hold less risk.
"Investment depends on what your risk profile looks like," John Bishop, president and CEO of Downers Grove, Ill.-based Vysis Inc. (Nasdaq: VYSI) told LocalBusiness.com. "If you have risks in determining the genetic markers, then in how to test for those markers, then with what therapy to pursue and then in the time for clinical trials, getting investors can be problematic."
Vysis is a genomic disease management company that markets clinical products to evaluate and manage various types of cancer. The company markets a genetic testing kit called PathVysion that detects the HER-2 gene in patients. Vysis is conducting clinical trials of PathVysion in partnership with Genentech Inc. (Nasdaq: DNA) for Genentech's Herceptin Therapy treatment for breast cancer. In May Genentech released patient outcomes data that showed a relationship between PathVysion's detection of the HER-2 gene and a successful Herceptin Therapy treatment. Now the two companies are analyzing tissue samples to prove a correlation -- ultimately with the goal of winning FDA approval.
"For biotech in general, historically the investors have been much more patient," Bishop told LocalBusiness.com. "But some investors have been burned and they're now more demanding that the company show revenues and profits sooner rather than later. They're less tolerant of futures."
PPGx, where Sheridan works, plans to be one of the first companies to offer a test that a consumer can self-administer to look for variation of the 2D6 gene, which affects the way individuals metabolize about 25 percent of the drugs currently in use, according to Sheridan. The gene produces an enzyme that helps metabolize medicines.
A joint venture formed between San Francisco-based Axys Pharmaceuticals Inc. (Nasdaq: AXPH) and Wilmington, N.C.'s PPD Inc. (Nasdaq: PPDI), PPGx hunts for predictive genetic markers for use in clinical trials of experimental drugs or diagnostic tests. It provides a variety of services to pharmaceutical and biotechnology clients. PPGx plans to launch a pharmacogenomics information Website for consumers and health care professionals in collaboration with Los Angeles-based ADoctorInYourHouse.com this fall. The Website will not only be used to deliver information about pharmacogenomics, but also to request demographic information and ask for DNA samples to conduct genotyping research to detect genetic variations that characterize the donor's response to drugs.
Tailor-made drugs
Dr. Dennis M. Smith Jr. sees a future where medicine will be tailored to a person's genetic makeup like a fine suit is cut to their shoulder width. Smith is the medical director and senior vice president of the Riviera Beach, Fla., firm AmeriPath Inc., (Nasdaq: PATH), a pathology and diagnostic service company with 301 doctors and operations in 14 states. "I think that most of us believe that the Human Genome Project is going to completely revolutionize the way medicine is practiced, everything from family practice to pathology," Smith said.
Still, John McCamant, editor of Oakland, Calif.-based Medical Technology Stock Letter, notes that pharmacogenomics as a business model remains untested. That said, the space is quickly heating up with "some heavy competition," he says. Pharmacogenomics has obvious promise, technologically and financially, in speeding up the process of drug development and reducing the risk associated with individuals having bad reactions to certain drugs. "The flip side is the cost," McCamant says, "and you have to prove to investors this area of biotech really adds value."
Greg Brown, vice president of global strategic marketing for Gaithersburg, Md.-based Digene (Nasdaq: DIGE), points out that there's the other natural hurdle to winning over investors: convincing them that the timeframe on returns isn't too far out. "One thing Wall Street wants to hear is that this new field is mind boggling in terms of its potential, but no one wants to hear they have to wait 10 years to see a return," he says.
Digene already markets tests that detect the genetic characteristics of viruses and bacteria associated with disease. It has patented what it calls a "hybrid capture gene analysis system" capable of developing tests for individual susceptibility to disease or sensitivity to drugs, says Brown. Such products are in the works at Digene, he says, though he isn't prepared to say precisely where the company is focusing its efforts.
Brown says for a company to become some kind of a market leader in pharmacogenomics, keys to success will be picking the right diseases to concentrate on and moving fast to build a bullet-proof patent portfolio. "He who succeeds in this field will be the one that focuses on one or just a few diseases and dominates in that area," Brown says.
Reporters Donna Balancia, Karen Cohen, James Heckman and Jeff Shuttleworth contributed to this story.
James Heckman is a staff writer for LocalBusiness.com. E-mail him with story ideas or comments.
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