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Of 22 children and 5 adults with Emily’s disease [acute lymphoblastic leukemia], ALL, 27 had a complete remission, in which cancer becomes undetectable. These were gravely ill patients out of options. Some had tried multiple bone marrow transplants and up to 10 types of chemotherapy or other treatments. Novartis , the third-biggest drug company on the Forbes Global 2000, is making this one of the top priorities in its $9.9 billion research and development budget.
“I’ve told the team that resources are not an issue. Speed is the issue,” says Novartis Chief Executive Joseph Jimenez, 54. “I want to hear what it takes to run this phase III trial and to get this to market. You’re talking about patients who are about to die. The pain of having to turn patients away is such that we are going as fast as we can and not letting resources get in the way. ”
It’s a stunning breakthrough,” says Sally Church, of drug development advisor Icarus Consultants. Says Crystal Mackall, who is developing similar treatments at the National Cancer Institute: “It really is a revolution. This is going to open the door for all sorts of cell-based and gene therapy for all kinds of disease because it’s going to demonstrate that it’s economically viable.”
Novartis has to run clinical trials in both kids and adults at hospitals around the world, ready a manufacturing plant to create individualized treatments for patients and figure out how to limit the side effects that nearly killed Emily. But Novartis forecasts all that work will be done by 2016, when it files with the FDA.
Progress like this explains why Jimenez is focusing his pharmaceutical giant on a simple mission: cure cancer. Already cancer drugs represent $11.2 billion of Novartis’ $58 billion in annual sales, but he says he’s “doubling down” on the cancer business. In April he did a deal that essentially traded Novartis’ unprofitable vaccine and consumer businesses and up to $9 billion in cash to GlaxoSmithKline in return for Glaxo’s cancer drugs, which currently generate $1.6 billion in sales but which Jimenez says include three pills he can turn into $1 billion sellers. The same day, he sold his veterinary business to Eli Lilly. He calls it “precision M&A”–bartering for the divisions you want, instead of bidding $100 billion for another rival, as Pfizer is doing with AstraZeneca . Jimenez’s move, which he terms “the antithesis of megamergers,” will drop Novartis’ 2016 sales 5% but boost earnings per share (before extraordinary items) by 10%, according to investment bank Jefferies.
Jimenez has competition, including one of the best-funded startups ever: Seattle-based Juno Therapeutics, which counts Amazon CEO Jeff Bezos among its backers. But that’s to be expected when the potential is so staggering–and tangible. “Anybody that gets associated with this technology and sees what this technology has been able to do really believes they’re participating in something that’s historic,” says Jimenez. “I look at it and think about the potential breakthrough that it could be. You could be looking at a transformation of the treatment of cancer over the next 20 to 30 years.”
Previous Novartis CEO Vasella’s proudest moment was the decision to ignore his own marketing people and instead listen to an Oregon oncologist named Brian Druker, who was begging him to develop a cancer drug called Gleevec–Vasella even wrote a book about it. Gleevec became a breakthrough, helping almost every patient with a particular rare blood cancer, chronic myelogenous leukemia. Patients stay on it for years, and it is so valuable that Novartis has quadrupled its annual price from $24,000 per year in 2001 to more than $90,000 today. Even the stingiest insurers pay, though some patients get it free.
What the marketers thought was a $400 million drug, Jimenez notes, is now a $4.6 billion one, and Novartis’ top seller to boot. The lesson: Worrying about marketing, instead of whether drugs work, is bad for business. “We keep our commercial people away from key decisions that are being made in research at an early stage,” Jimenez says. “Whereas another company might have commercial people in there looking at business opportunity or market size, we have said we don’t want that.”
First comes the challenge of figuring out how to deliver a personalized therapy to patients with ALL, the disease Emily had. Their blood will need to be filtered at hospitals, then sent to Novartis, then sent back. How do you manage that? Luckily, one biotech, Dendreon, solved this problem with its prostate cancer treatment, Provenge. Even luckier for Novartis, Provenge was not that effective and flopped, and Dendreon was looking to offload a manufacturing plant. Novartis gave Dendreon $43 million and kept 100 of the plant’s 300 employees. In fact, its treatment will be easier to manage than Provenge: The T-cells can be shipped frozen; Provenge couldn’t. Bruce Levine, the researcher tasked with growing cells at Penn, says the facility is a dream come true. “The results are there, the science is there,” he says. “It’s an engineering issue.”
There is the problem of competition. June, Novartis’ partner, wasn’t the only one to think of using CARTs to attack cancer, just the first to publish evidence that it could work. But others were on the same trail, and most of them pooled their efforts into a biotech: Seattle’s Juno Therapeutics.
Six of the top researchers in the CART field, from the Hutch and elsewhere, have banded together to produce the next generation of cancer-killing cells. “We want to be a $50 billion market cap company that cures people,” says ARCH partner Robert Nelsen. While Novartis bought one of Dendreon’s plants, Juno hired the man who built them: former Dendreon chief operating officer Hans Bishop, 50. “I’ve just never seen early clinical data like this,” he says. “I’ve been in this industry a long time and been in clinical development a long time, and the things we see are as different as night and day.”
A next-generation CART method being developed at the Hutch by Juno seems to cause less severe fevers. So far, patients have needed nothing more than Tylenol. Juno even has another option: a T-cell that uses natural, not man-made, receptors to detect cancer. It will mix and match to create even better CARTs.
Jimenez says, the biggest hurdle facing efforts to develop new cancer cures might be economics, not science. “What you know is not going to happen is the ability to stack therapies on top of each other at the current price and expect people to pay,” he says. “ The whole oncology pricing structure needs to be rethought because it’s reached the level that is not going to be sustainable for the long term.
When researchers talk about CARTs they often reference the cost of a bone marrow transplant–$350,000 for a single course of treatment. Why not? There are biotech drugs for rare diseases that cost $400,000 or more a year. But Jimenez says that would be too much–that even for a breakthrough the cost needs to be lower.
SOURCE – Forbes: http://nextbigfuture.com/2014/05/novartis-is-betting-billions-on-getting.html#more