The risk-reward balance in drug repurposing

Does drug repurposing overcome the hurdles and pitfalls in drug development? Having conducted several recent due diligence exercises in the repurposing space, we discuss the gems and the hidden hurdles in drug repurposing and provide insights that could help developers and investors alike unravel whether a repurposing venture is worth pursuing. Ultimately, we’ll show that although the development risks can be lower, the commercial risks are high and inevitably it is a balancing act between the two.

Although sometimes used interchangeably, the terms ‘drug repositioning’ and ‘drug repurposing’ have quite different connotations: the former is often an indication expansion route for companies to increase the market share and expand the label of a drug without the need to explore different mechanisms of action, often within the CNS, infection or oncology space. Drug repurposing often involves extension into a new therapeutic area, sometimes outside of the known mechanisms of action and usually with a different developer. For the purposes of this discussion we will define drug repurposing as developing an existing drug into a new therapeutic area.

The poster child for drug repurposing is Viagra (sildenafil, Pfizer); originally discovered and developed as an anti-hypertensive in the mid-90’s, Viagra was shown to have unexpected erectile effects in Phase I clinical trials. Not efficacious in angina, it was studied and approved for the treatment of erectile dysfunction (ED) in 1998. Since then, Viagra has generated over $35 billion globally, with annual peak sales of $2 billion in 2012 ¹. Ketamine is another prominent example of drug repurposing, where after 50 years of use as a dissociative anesthetic it is now prescribed to treat various types of pain and resistant depression (the latter indication having recently received FDA approval) ².

Viagra’s discovery was serendipitous; nowadays there are well-established methods at our disposal to identify repurposing candidates, with computational systems pharmacology approaches being the most favored. In fact, 75% of the current methods used in this space are computational in nature, including techniques like signature mapping which compares and correlates a drug’s characteristics (transcriptomic, structural or adverse event profiles) with other drugs or with disease phenotypes ³. The remaining 25% are experimental methods involving binding assays and phenotypic screening; although most modern repurposing programs will combine multiple methods from both sides.

Clinical stage companies like AI Therapeutics are a recent example of industry gaining traction in drug repurposing through developing proprietary algorithms supporting artificial intelligence (AI) driven drug development, utilizing the ever-expanding open source databases to identify common drug mechanisms across different disease areas. AI Therapeutics has multiple clinical programs in oncology and neurology. Earlier this year, Innoplexus and Cures Within Reach for Cancer partnered in the development of an AI-powered platform to identify and repurpose generic drugs to treat cancer. UK-based Healx also has proprietary AI technology for signature mapping and repurposing in the rare disease space; SOM Biotech and Pharnext are further examples focussed in CNS indications only, with the latter exclusively developing new combinations of approved drugs. Another example is Algernon, a company which takes a different approach by repurposing drugs approved and genericized outside of the US and Europe and brings them into these regions in new indications. Algernon’s pipeline is primary focussed in the inflammation and fibrosis space with its clinical lead in IPF.

A recent success story of Big Pharma making its mark in drug repurposing is with Novartis and ofatumumab (Arzerra), a CD20 monoclonal antibody developed originally for leukemia. Novartis acquired Arzerra from GSK for a total of $500M for its use in oncology and relapsed remitting multiple sclerosis and in August last year presented positive Phase III read-outs ⁴.

CRO’s are even in the business of building partnerships and offering their services for drug repurposing, for example, GVK BIO provides a combination of computational and experimental techniques and is actively looking for collaborations in pharma and academia. Charities are also exploring the benefits of drug reformulation, UK-based Findacure actively connects patients with drug repurposing programs in rare diseases and provides project funding.

Examining the pros and cons of drug repurposing reveals that in most cases, the development risks can be lower but the commercial risks are high:

• phiA faster and cheaper development pathway?
  
  The FDA’s 505(b)(2) route and the Hybrid Regulatory Pathway of the EMA are regulations that allow the submission of previously generated clinical data to support a repurposed product approval. This includes in vitro and in vivo data, chemical optimisation, toxicology, CMC and formulation development. In all likelihood these elements will have already been optimised, unless the drug was originally registered many years ago e.g. Colchicine, originally used in gout in 550AD and included within the British Pharmacopoeia in 1618 and now repurposed for cardiovascular indications ⁵. Or antimalarial artemisinins developed in the 1970s and more recently repurposed in CNS and oncology ^6,7. And so, more modern drug repurposing could allow for a faster process into the clinic in a new indication, and could even expedite the overall clinical trial process if enough data has been collected and interrogated (this includes trial failures). An Alacrita colleague, Dr. Saadia Basharat, recently published an article discussing this regulation in further detail and found that 50% of NDA approvals from 2013-2018 were for products submitted via the 505(b)(2) route. As a result of regulations like 505(b)(2), times to approval for repurposed drugs are between 3 to 12 years; much shorter than new-in-man programmes that generally take between 10 to 17 years ⁸. Thus, shorter timelines, more focussed spending and the benefit of ‘lessons learned’ could significantly reduce development costs.
  
  However, even though regulations like the 505(b)(2) pathway exist to benefit drug repurposing, data exclusivity laws prevent other parties from accessing data for an approved product for a period of time in order to prevent early competition from generics. These measures can significantly delay the above proposed expedited pathway for development and approval of reformulated drugs by up to 8 years in Europe and up to 3 years in the US, creating a reliance on access to preclinical and clinical publications which often don’t tell the whole story.
  
  
• Complicated IP and exclusivity?
  
  IP coverage is one of the most crucial factors underpinning a repurposed drug’s commercial potential. Although an original ‘composition of matter’ patent may well have expired, a ‘method of use’ patent should still be attainable, although this is often seen as a weaker protection. If the repurposed drug is developed at a different dosage to any variant on the market, the method patent becomes more valuable as to some extent it fends off the impact of off-label use of the original drug. Alternatively, a novel dosage form may itself form the basis of a new composition of matter patent. However, there may be a danger of existing prior art in the form of the originator patent; if broad patent protection was originally pursued by the originator including mention of the drug for use in the new indication, this could hinder subsequent innovators from pursuing a repurposed drug, even if the proposed new indication is not actively being pursued by the originator.
  
  However, this certainly was not the case in the 2018 court case involving Pfizer, where its Lyrica (branded pregabalin) patent protection claim was rejected and the court ruled in favor of pharmacists dispensing the generic form of pregabalin for neuropathic pain, without being liable for patent infringement (9). Although neuropathic pain was under Pfizer’s patent coverage, the court decided that pharmacists could in fact dispense generic pregabalin due to the formulation being the same and the assumption that it is impractical for pharmacists to enquire into the indication for which the drug is being prescribed. 
  
  In the absence of patent protection, orphan drug designation (ODD) can provide a period of commercial exclusivity. Besides benefiting drug development for disorders that might otherwise be neglected, ODD offers commercial incentives with up to 7 and 10 years of market exclusivity post-approval in the US and EU, respectively. Over 360 orphan drugs and biological products have been approved by the FDA since 1983, with 127 of those also approved by the EMA; 1 in 5 of approved orphan drugs are repurposed ¹⁰. Nevertheless, if the repurposed drug is sold in an identical strength and dose form as the originator compound it is extremely difficult to police the prescribing/dispensing to ensure the ‘right’ product is used for the particular indication.
  
  
• Higher probability of technical and commercial success?
  
  In theory, the probability of reaching the market with a repurposed drug should be higher. Indeed, literature reports repurposing success rates for pre-approved drugs at 33% from Phase I to market approval, a huge improvement over new drug products at 10% ^8,11. This is presumably attributable to the original drug having been through previous rounds of preclinical and/or clinical development and thus any safety issues or even efficacy signal already established.
  
  However, even if approval is obtained, a significant hurdle to overcome is ensuring clinical use of the repurposed drug which is often more expensive than an existing marketed generic version of the product. As mentioned above, the only way to ensure clinical uptake is to change the formulation or dose from the original marketed product.
  
  Physicians need to be convinced of the additional clinical value and payers are often averse to reimbursing a more expensive variant of an already marketed product, therefore companies often need to put forward a compelling case for why the dosage or formulation has changed and why this provides a real clinically meaningful benefit to patients over the existing version. This strategy can begin to diminish the above proposed faster timelines and reduced development costs in drug repurposing as it can burden the developer with requests for additional formulation, manufacturing and dosing optimization studies.
  
  Considering all of this, is repurposing really value-adding? Alacrita has recently conducted several due diligence exercises of drug repurposing companies and from the perspective of an investor, partner or licensor, there are several key questions to ask when determining whether a repurposing opportunity is commercially viable, including:
  
  
• Does the program ‘pass’ a technical due diligence exercise?
  
  The original product will often have been investigated at least up to Phase II clinical trials; therefore, it is essential to evaluate whether there are credible signals within the clinical data that suggest a repurposing project could be successful (or indeed unsuccessful) in the new indication. This should involve a deep dive into the mechanism of action as well as the prior and recent data collected to ensure that a repurposed indication is a suitable target.
  However, it is important to bear in mind that past preclinical and clinical evidence is not always reliable. Clinical trials, for example, may be incomplete, underpowered or may have focused on different aspects of the drug mechanism. In some cases, particularly where the drug has previously failed in the clinic, so many development steps may need to be repeated that the process almost becomes a new-product approval bringing the usual risks, costs and timelines along with it.
  
  
• Is there a real clinical need for the repurposed product?
  
  The key here is understanding the opportunity from a clinical perspective, more specifically, from the perspective of physicians who can help gauge interest in the product and level of unmet need, validate the clinical positioning of the product and proposed clinical development plan including clinical study endpoints, and importantly help the developer understand the risk of off-label use.
  
  
• Is there enough money to be made?
  
  Primary research with payers can help to inform the design of clinical trials, to ensure adequate clinical evidence is collected and importantly to understand realistic pricing scenarios. This could also be informative about the payers’ tolerance for off-label prescribing for the specific drug / indication in their jurisdiction.
  
  

Conclusion

There is potential for huge advantages in drug repurposing and it can be highly attractive as a potentially cheaper and faster route to market. However, hidden skeletons need to be uncovered and overly optimistic commercial assumptions need to be challenged in order to have a realistic understanding of whether a repurposing project is a worthwhile opportunity.

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