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The Rise of Niche-Busters: Has the 'Long Tail' Phenomenon Reached Big Pharma?

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Despite the doom and gloom scenarios portending the death of the blockbuster, big pharma appears to be making its peace with pharmacogenomics by using the discipline to carve out a new profit model dubbed the “niche-buster.”
 
A few weeks ago a Novartis official placed a 10-year expiration date on the blockbuster model [see PGx Reporter 03-14-07] and outlined the company’s learn-and-confirm R&D strategy involving a heavy dose of PGx and biomarkers in the preclinical setting.   
 
Separately, during a recent biomarker e-symposium hosted by the International Society of Pharmacogenomics, Werner Kroll, global head of molecular diagnostics and theranostics program at the Novartis Institutes for Biomedical Research, gave a name for the company’s new profit model – the “niche-buster” – further solidifying the fact that the era of the blockbuster is tapering off.
 
“We can see with the blockbuster model, where every patient gets treated with the same drug, we encounter limitations,” Kroll said during the symposium. “We see a lot of patients who don’t respond anymore and a lot of patients who could also see side effects.”
 
“But with the new model, which we call the niche-buster model, we think we will address the needs of the patient much more [in] in vitro [studies], and better,” he said. “We might see more drugs for smaller subgroups that are treated much more efficiently.”
 
The term niche-buster was popularized by Wired magazine editor-in-chief Chris Anderson’s book The Long Tail, which proposes that culture and the economy are shifting away from relying on a small number of "hits" or “blockbusters” at the head of the demand curve and toward a much larger number of niche markets in the tail [see accompanying graphic].
 
Source: Anderson, Chris. The Long Tail.
“As the costs of production and distribution fall … there is now less need to lump products and consumers into one-size-fits-all containers,” Anderson writes.
 
But industry observers had initially reasoned that since blockbusters still comprise a significant portion of pharma revenues, the Long Tail phenomenon would probably wag past them.
 
Based on Kroll’s comments, however, it would seem that pharma, seeking to reduce attrition rates in late-stage clinical trials and lower drug-development costs, has begun to fall in step with the Long Tail theory.
 
While some say that pharmacogenomics technologies will eat into pharma’s profitable blockbuster model, others have long predicted that big pharma will not abandon the blockbuster but rather use biomarkers and pharmacogenomics opportunistically to arrive more efficiently at cash-cow drugs.
 
“People have been talking about [personalized medicine] for a long time and a lot of people who think it won’t happen anymore,” Kroll said. “But I think it will and it will come soon.
 
“Drugs in the future will be developed and approved based on predictive biomarkers and … we don’t want to wait necessarily in our clinical trials until the hard endpoint,” he added. “We would like to have biomarkers which would indicate [successes and failures] much earlier so we can adapt our activities accordingly.”
 
The Long Goodbye
 
Unlike the entertainment industry, the sector in which one can see the Long Tail theory most readily play out, pharma has been slow to warm up to the niche-buster model. While pharma now appears upbeat about the prospects of PGx, the industry has been waving a long goodbye to the blockbuster model.
 
Although Pfizer’s Lipitor, also called atorvastatin, topped the list of blockbuster drugs in 2006 with $7.8 billion in US sales, it is well known that as many as 50 percent of patients won’t benefit from the drug. Additionally, the efficacy rate for oncology drugs is among the lowest across drug classes, at about 10 percent.
 

“But with the new model, which we call the niche-buster model, we think we will address the needs the patient much more [in] in vitro [studies], and better. We might see more drugs for smaller subgroups that are treated much more efficiently.”

High profile drug failures due to adverse reactions in late-stage studies, like Pfizer’s cardiovascular drug torcetrapib, has contributed to drug development costs exceeding $800 million for a single agent.
 
A final push away from the blockbuster model might be due to the fact that $27 billion worth of blockbuster drugs will lose their patent exclusivity this year, and an additional $29 billion of the mega-sellers will lose patent protection in 2008.
 
According to Kroll, the niche-buster concept is based on “one compound, one mechanism, and multiple indications.”
 
For instance, Novartis is studying the utility of a biomarker found in an orphan disease population in broader disease markets. The company recently conducted a successful proof-of-concept study for ACZ-885, an antibody that targets the IL-1 beta signal to treat a rare inflammatory condition called Muckle-Wells syndrome.
 
The company has said it plans to use its IL-1 beta biomarker to identify subpopulations within rheumatoid arthritis, asthma, type-1 diabetes, and psoriasis markets that can benefit from ACZ-885.
 
Kroll also noted development plans to study the m-Tor signal, which could potentially be useful in a number of disease settings including oncology,  tuberosclerosis, and immune disease.
 
“These diseases are in totally different areas but they are all tied together through the pathway and the positions of that specific target in that pathway,” Kroll said. “This change of concept is also reflected in the way our R&D offices work, and how biomarkers are involved in this activity. Biomarkers are supporting all activities from the beginning in exploratory research toward the full release and even afterwards in the market.”

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