The Drug Discovery Process
The process of drug discovery can be organized into four stages: target identification, target validation, high-speed screening, and lead optimization.
Target identification establishes a link between specific genes and a disease, in which researchers identify and characterize important proteins and regulatory pathways responsible for the expression of the genes. These pathways often contain multiple targets and fully exploring the pathways increases the likelihood of identifying the best target for therapeutic intervention. Researchers use a combination of biochemical, molecular, biological, and genetic approaches to discover novel regulatory proteins.
Target validation begins once a target has been identified, to ensure that it functions as expected in the disease process. This involves cloning and expressing the gene that codes for the target protein. Cloning permits the biological evaluation of the protein’s specific function in the disease process. To evaluate the physiological function of potential drug targets, researchers manipulate their expression in cells using two methods; they map the pathways by which the targets interact with other regulatory proteins to regulate genes and seek to understand the cell types in which the targets are expressed.
The validation of a molecular target in vitro usually precedes the validation of the therapeutic concept in vivo; together this defines its clinical potential. Validation involves studies in intact animals or disease-related cell-based models that can provide information about the integrative response of an organism to a pharmacological intervention, thereby helping to predict the possible profile of new drugs in patients.
High throughput screening involves researchers using primary assays to screen targets against existing chemical libraries for hits — that is, compounds that inhibit the action of a target or affect it in some other way. Secondary assays then eliminate those hits that lack potency or specificity, or have other unwanted characteristics. Generally, hits with promising results in animal models and desirable chemical characteristics become lead compounds. Any compound that survives secondary assay screening then undergoes further testing and ultimately molecular modification and optimization.
After assaying, the target compound is screened against several chemical and biological compounds to identify those chemicals that interact with the target and alter its function. Typically, this involves large numbers of samples. To help increase researchers’ productivity, powerful instruments have been developed that facilitate the screening process. These high throughput screening instruments range from small capacity workstations to sophisticated and flexible systems that use robots programmed to perform several procedures.
Screening for drug discovery can also benefit from large libraries of diverse molecular structures. They permit researchers to screen targets for interactions with hundreds of thousands or even millions of synthetic compounds and natural product extracts. A chemical collection may also include chemicals produced through combinatorial chemistry methods.
Lead optimization is a complex, non-linear process of refining the chemical structure of a confirmed hit to improve its drug characteristics with the goal of producing a preclinical drug candidate. Also included in the lead optimization step is understanding the adsorption, distribution, metabolism, excretion and toxicity (ADME/Tox) profiles of compounds. It also involves improving potency against a specific molecular target, reducing cytotoxicity, and verifying that physical and chemical properties are biocompatible. In order to achieve this, researchers rely on a wide range of medicinal chemistry tools and computational chemistry methods, along with in vitro pharmacokinetic screens. These methods are supported by powerful data-handling and analytical software programs.
Drug development is a high-cost and risky business, since only a fraction of the therapeutic targets selected for study will actually yield products that obtain regulatory approval from the FDA. The average drug can take 10 or more years to progress from the discovery phase to the clinic, with only one compound out of 10,000 evolving into a viable product. Typically a majority of compounds do not proceed further than the preclinical stage, with only five in 5,000 advancing, before moving onto clinical testing, which includes multiple phases, a plethora of regulations imposed by the FDA and the need for large batches of volunteers.
Advances in molecular biology and the emergence of new-generation biological therapies since the 1990s have led to an increasingly complex drug discovery process. These advances, along with the emergence of new technologies, have made it unsustainable for companies to undertake all drug discovery functions in-house. Therefore, the industry has chosen to outsource core drug discovery functions more frequently.
Specifically, the need for clinical outsourcing is being driven by declining R&D budgets; overall expenditures on discovering and developing new drugs by PhRMA members increased nearly 10% in 2010 to reach $50.7 billion; the 2010 rise was short-lived as PhRMA estimates R&D spending dropped just over 2% to $49.5 billion in 2011. In order to accommodate shrinking budgets and the demand for new market drugs, companies have turned to outsourcing to manage their core functions, which has resulted in time and cost savings as well as financial and operational flexibility.
For pharma companies and outsourcing regions, drug discovery services can provide mutual benefits. The field requires technical expertise in the areas of molecular biology, ultra-high throughput screening, molecular and behavioral pharmacology, and combinatorial, medicinal, and analytical chemistry. University and higher education programs throughout BRIC nations have focused heavily on developing skilled workers in these and associated fields. In addition, crossover and new advancements in chemistry, molecular biology, pharmacology, microbiology, and biochemistry have resulted in the evolution of new methodologies and their application in drug discovery. These advancements come with the promise of generating greater numbers of more effective drugs, while maintaining or reducing current costs.
Fears of intellectual property protection have been outweighed by advantageous, low-cost drug discovery outsourcing, in addition to allowing pharma companies to leverage new technologies and scientific expertise.
Market Growth Heaviest in BRIC Nations
The market for outsourced drug discovery services is robust and has an optimistic outlook, despite the current unsettled economic environment. The global market reached $9.4 billion in 2011, up 15% from $8.2 billion in 2010. This market is expected to experience robust growth reaching $11.1 billion in 2012. The global drug discovery outsourcing market is expected to grow at a compound annual rate of 16% over the next five years, exceeding $21.0 billion by 2016.
Another major trend that continues to gain momentum is choosing outsourcing partners in Asia and Eastern Europe. It is not only large pharma and biopharma companies that are moving their outsourcing offshore, but smaller companies are following this trend as well.
Small biopharmaceutical firms, including virtual companies that lack the infrastructure to carry out complex chemistry, biology, and lead-optimization services, are choosing outsourcing partners in India or China, thus expanding the rapidly evolving global drug discovery outsourcing market.
Growth Among BRIC CROs?
BRIC nations are seeing the largest growth since they have been developing the academic and scientific workforce necessary to carry out high-tech core functions. Chinese CROs offering drug discovery services have expanded significantly since 2004. Only a few companies were operating in Shanghai in 2004; by late 2007, several drug discovery laboratories were opened in Shanghai, Beijing, Suzhou, Guangzhou and other cities, as China continues to develop its life sciences sector.
Additionally, China rallied FDA support with the opening of an office and facilities in 2008 in Beijing, Guangzhou and Shanghai; this has allowed Chinese experts to work in concert with regulatory authorities in the U.S. China and the U.S. also formed an anti-counterfeit partnership in 2009, which strengthened the oversight and enforcement of APIs, adding strict record-keeping requirements and regulating unregistered Chinese companies advertising and marketing APIs.
Major pharmaceutical companies operating R&D activities in China include Novartis, Roche, AstraZeneca, Pfizer and GlaxoSmithKline. Specific Chinese CROs in drug discovery include2Y-Chem, AbMax Biotechnology, Chemizon, HD Biosciences, Pharmaron; many of them are led by world-class scientists and managers, and not all of them Chinese. Currently, the leading CRO in China is WuXi, which boasts nine of the ten largest pharmaceutical and biotechnology companies by revenue as its clients.
India’s pharmaceutical industry is robust, driven by its emergence as a global leader in the generic manufacturing field, as well as its contract clinical research and contract manufacturing organizations. Drug discovery in India is still in its infancy; it has only been recently that contract drug discovery research has become a focus.
India’s clinical research agreements include large multinationals forming strategic partnerships with Indian subsidiaries, global and local CROs forming partnerships, independently-operated CROs and subsidiaries of Indian pharmaceutical companies. Specific to drug discovery, the following CROs are in operation: Actimus Biosciences, Advinus Therapeutics, Chembiotek, Indus BioSciences, Shasun Pharmaceuticals and Syngene Pvt. Ltd. These companies span several key cities, including Bangalore, Hyderabad, Kolkata and Andhra Pradesh.
One of the main drivers that led to India’s growing CRO presence was the introduction of the Trade Related Intellectual Property Rights (TRIPS) agreement in 1995, which came into full effect in 2005. Its disallowance of ‘reverse engineering’ added support from multinationals, along with updated patent filing systems and partnerships with the FDA.
To keep pace with the Chinese and Indian competition, many CROs in the former Soviet bloc have culled together their most experienced chemists, providing services which include preparing custom libraries, advancing screening hits into families of leads, and designing libraries that target important biomolecules, such as kinases and ion channels. Many also offer, or are planning to offer in the near future, in vitro biological screening of the chemical libraries they build.
The drug discovery CRO landscape in Eastern Europe is highly fragmented, with a large number of private companies competing. Among the leaders are U.S./Russian integrated CRO ChemBridge and ChemDiv, which are both headquartered in San Diego with subsidiaries in Moscow. Other successful competitors in the Eastern Europe are Asinex and Enamine. Several CROs operating in Russia and Ukraine also have facilities in North America.
As major pharmaceutical companies continue to scale down their own R&D operations, outsourcing core tasks such as discovery will become more prevalent.
Steven Aldrich is a marketing associate at Kalorama Information. He can be reached at email@example.com. This article derives from Kalorama Information's report Outsourcing in Drug Discovery, which focuses on the market for contract research organizations and drug discovery. The report is available at www.kaloramainformation.com. All figures courtesy of Kalorama Information.