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2018-04-27 / News

Pennsylvania research universities are changing the way we think about Big Pharma

Regional Business Analyst

In May 2010, Emily Whitehead, then age 5, was diagnosed with childhood acute lymphoblastic leukemia, ALL, which is a type of cancer where the bone marrow makes too many immature lymphocytes, a type of white blood cell. Eighty-five percent of children with ALL are cured after two years of chemotherapy, but 15 percent fail to respond. Emily’s cancer relapsed twice despite more intensive treatment. Her parents, who are Penn State graduates, were told her doctors were out of options. Desperate to save their daughter’s life, the Whiteheads agreed to an experimental treatment called chimeric antigen receptor T cell, or CAR-T therapy, which was developed at the Children’s Hospital of Philadelphia by Dr. Carl June, director of translational research at the Abramson Cancer Center at the University of Pennsylvania.

In April 2012, doctors collected T-cells, another type of white blood cell, from Emily’s body. Using a non-infectious form of the human immunodeficiency virus, more commonly known as HIV, the T-cells were genetically engineered to identify and attack cancer cells. When the genetically modified T-cells were injected, Emily became very ill and spent weeks on a ventilator in the intensive care unit. Her doctors weren’t sure if she was going to survive.

Not only did she survive, but the T-cell therapy worked, and tests revealed no cancer cells in her body. This month, Emily is celebrating her sixth year of being cancer-free.

Other children, including Paulina Villanueva, who traveled from Mexico to Philadelphia for T-cell therapy for ALL, have received Dr. June’s life-saving CAR-T therapy.

“This is a uniquely Pennsylvania story,” said Christopher Molineaux, president and CEO of Life Sciences Pennsylvania, who serves as the chief advocate and spokesman for the life sciences industry in Pennsylvania.

“Last year, the FDA approved the CAR-T therapy that saved Emily’s life after the University of Pennsylvania licensed it to Novartis, a biopharmaceutical company that’s putting it into rapid scale-up production.”

Another Pennsylvania-based company, Spark Therapeutics, which also spun out of Children’s Hospital, developed the gene therapy Luxturna, which cures progressive blindness with only one injection. In January, Sparks announced the cost of its biologic therapy: $425,000 per eye, $850,000 for most patients.

A biologic, Sofosbuvir, that cures hepatitis C was invented in Pennsylvania by Michael Sofia, a scientist at Pharmasset, which was acquired for $11 billion by Gilead, an American biopharmaceutical company. The cost of the Sofosbuvir is $1,000 per pill. It’s taken once a day for 12 to 24 weeks, so the total cost of treatment could run between $84,000 and $168,000.

“How do you price a therapeutic that cures blindness or hep C when the pharmaceutical industry’s traditional business model has been making money from patients needing to be on a drug for the rest of their life, for example, a heart medication such as Lipitor or Crestor?” asked Molineaux.

“Grappling with how to price a cure is a good problem to have.”

The transition from medicines that treat symptoms to biologics that cure diseases represents one aspect of how Pennsylvania’s life sciences industry is reinventing itself. Another is a shift in drug and therapeutic development from Big Pharma to small startups that spinout of Pennsylvania research universities.

“Pennsylvania was the birthplace of many of the large, global pharma companies,” said Molineaux.

“You can trace that back to the Philadelphia College of Pharmacy, now called University of the Sciences, which graduated some famous alumni, including Ely Lily, Robert McNeal, John and Frank Wyeth, Henry Wellcome and Silas Burroughs, all of whom started pharmaceutical companies that became global giants.

“And we still have many major pharmaceutical players in Pennsylvania.”

Although headquartered in New Jersey, Johnson & Johnson has its pharmaceutical and biotech divisions in Pennsylvania. GlaxoSmithKline’s headquarters is in Philadelphia. Merck has a very large presence in the state, including research labs. AzstraZenica was another Pennsylvania-based Big Pharma company before it moved to Delaware. Wyeth was acquired by Pfizer, and Bayer has a big presence in Pittsburgh.

“What’s happened over the past 15 years is those Big Pharma companies realized that true innovation resides outside their walls, and in many cases, resides in research universities and in the startup spinouts from those schools,” said Molineaux.

A couple factors contributed to that revelation.

“When blockbuster pharmaceuticals, which are defined as products that generate more than a billion dollars in revenue annually, went off patent, many pharmaceutical companies did not keep up with those patent expirations, so they weren’t getting new products into the market fast enough to make up for the loss of those blockbuster drugs,” said Molineaux.

“The result is that over the past decade we’ve seen a significant contraction of the pharmaceutical industry; jobs have been outsourced, particularly in R&D, and many pharma jobs have been lost in southeastern Pennsylvania, because of the large pharma presence there.

“The silver lining is that many of those executives that were laid off formed companies of their own.”

Between 2011 and 2016, there was a net increase in the number of life science companies in Pennsylvania, with 4,317 life sciences patents being issued during that time. In many cases, those former R&D executives are now performing the same functions they did for Big Pharma, but now on a contract basis.

National Institutes for Health funding increased by 23 percent during the past three years, and this year’s federal budget boosted NIH funding for medical research by $3 billion, an investment touted by both parties. However, during most of the recession, NIH university research grant funding remained flat.

“The universities started to feel squeezed by the lack of increase in NIH funding, and many universities realized the value of commercializing the programs they were working on in their labs,” said Molineaux.

“Penn State, U Pitt, U Penn and across the commonwealth, more universities are engaged today in the out-licensing of life science technology that’s been developed in their labs.

“That’s true in all the top life science states including California, Massachusetts, Indiana, Michigan and New Jersey, and it’s resulted in an increase in the number of university spinouts.

“The large pharma companies are more reliant now on the universities to help fill their pipelines with either a direct licensed deal with the university, or when a company spins out of the university, that company can be an attractive license or acquisition target for Big Pharma.”

The out-licensing of new drugs and biologics reduces the costs for biopharmaceutical companies by allowing them to de-risk the entire process, because drug development is a very high-risk venture. For every 1,500 products that begin development with the hope of being approved by the FDA, only one will receive that approval. On average, it takes 10 to 12 years to go through the drug research, development, clinical trials and approval process. The average cost of getting a drug or biologic ready for an FDA review is $2.6 billion.

“Pennsylvania research universities have benefited from the reinvention of the life sciences industry by having additional revenue streams as they try to commercialize these products, spin them out and partner with Big Pharma companies.” .

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