"HimRar" has started the sowing campaign

Nikolay Merkin, HimRar Ventures: We will make an innovative drug for $10 millionUNOVA
HimRar High Technology Center is one of the most active Russian players in the market of innovative medicines development.

His portfolio includes dozens of developments, including drugs for cancer, HIV and hepatitis C, diseases of the central nervous system. Nikolay Merkin, CEO of CJSC "HimRar Ventures", told UNOVA about the business of the organizations of the "HimRar" CVT, their cooperation with Rusnano, RVC, and the features of the pharmaceutical market.

What projects does Himrar transfer to the seed fund?

So far, we have submitted one project to the seed fund: this is a drug for the treatment of alcohol addiction. He is entering the second phase of clinical trials. The decision of the seed fund on the project is expected in the coming days.

In August, we plan to submit two more projects to the RVC FPI, and the plan is 5-10 projects by the end of the year. We will try to fulfill it, at least according to the minimum bar.

Can you tell us about two projects that you will submit to the seed fund in August?One is a drug for the treatment of prostate cancer, this is a very popular type of drugs aimed at those types of cancer that cannot be treated with drugs available on the market.

The second project is a remedy for the treatment of hepatitis C. Today, this disease is treated mainly with a combination of ribavirin and interferon, i.e., immune system stimulants, and there are no drugs directly acting on the virus on the market. Our project involves the development of an innovative drug that prevents the spread of the virus

Our other developments also relate to therapeutic areas with unmet need.

You recently announced a joint project with Rusnano, just to create a cure for hepatitis C. Are you planning to submit the same project to the RVC seed fund?

No, these are two independent developments with different mechanisms of action, but both aimed at suppressing the spread of the virus. We have submitted a drug to Rusnano that is already undergoing phase one of clinical trials, that is, it is being tested for safety. The mechanism of action of the drug is to suppress the process of virus entry into a healthy cell. We are submitting a drug of a different class to the RVC seed fund, aimed at suppressing replication and, accordingly, reproduction of the virus

At least forty hepatitis C drugs are currently undergoing clinical trials in the United States. All of them are designed for different stages of virus-cell interaction. This topic is considered quite hot. Our hopes here are connected with obtaining a first-in-class drug (i.e., the first drug with this mechanism of action) or best-in-class (i.e., the best drug among drugs with the same mechanism of action), in the worst case – a drug with similar characteristics to its foreign counterpart, which will keep the Russian market and the CIS will provide our market with a domestic drug that is not inferior to imported, but cheaper.

Who will be the private co-investor of the projects transferred to the seed fund of RVC?

One of the companies in our group will act as a co-investor in the projects I mentioned. In the future, we also see not only ourselves as a co-investor, but also our partners and other interested investors.

Pharmaceutical company in Russia: how good or bad is her life? What are the prospects for the industry?We are not a pharmaceutical company, we are a developer of innovative medicines for these pharmaceutical companies.

As far as I understand, the situation in the industry is improving now. At the same time, only one domestic company "Pharmstandard" is in the top 10 in terms of sales in Russia, although it constantly takes the first or second place.

The government is taking a number of measures to ensure that Western companies are localized in Russia and create their own production. These measures are beginning to produce results. On the other hand, large domestic distributors have started to create their own production facilities. In particular, production facilities are being created in the Kaluga and Yaroslavl regions.

Those productions that Westerners open in Russia will stamp out ready-made medicines, their own developments. This is, relatively speaking, a "screwdriver assembly". They don't need you with your innovative developments...

Absolutely true in the "screwdriver assembly" part. I will tell you more: there are few pharmaceutical companies in the world that have innovative drugs in their portfolio. Every year, 20-25 drugs are registered in the States, no more, and this applies only to large pharmaceutical companies. Most companies produce and sell generics. There are very few domestic innovative drugs in the portfolios of Russian pharmaceutical companies in significant therapeutic areas. About whether pharmaceutical companies need us with our innovative developments or not. The answer is unequivocal – yes, we do. After all, an innovative drug in a significant therapeutic area is the utilization of the production capacity of a pharmaceutical company and a rapid increase in sales. I don't see any problems with licensing rights for a new effective drug.

And where do you go with your development? Here you have made an innovative drug, it has been tested, everything is fine. Where do you go next if there is a "screwdriver assembly" of other people's drugs all around?

We are considering such a business model for ourselves. We do proof of concept, that is, we prove that the drug works, we look at the safety of the drug and its effectiveness. These are phase 1 and phase 2 clinical trials.

Due to the fact that we choose therapeutic areas that are "hot" for the whole world, we see a competitive innovative situation and understand that such a drug with a proven concept will certainly be in demand by big pharma. We know in which therapeutic areas which pharmaceutical company works and what types of drugs they are interested in.

So, if the concept is proven, the safety is good, the effectiveness is excellent, then we give all the rights to the drug on the world market to one of the big pharma companies. We get lump–sum payments for this (prepayment and step-by-step payments when the buyer company reaches control points, for example, the successful completion of Phase 3 clinical trials, registration of the drug), plus then we receive royalties in the form of percentages of sales. In Russia, we are completing phase 3, registering, and either producing the drug ourselves, or selling a license to a patronymic pharmaceutical company.

Do you sell the drug and the rights to bigpharma, but do you keep the Russian market for yourself?Yes. We sell the rights to the world to Big Pharma, with the exception of Russia and, perhaps, key CIS countries.

Is bigpharma aware of your plans?Sure.

It is ok. We already have a deal with the global pharmaceutical company Roche, built on a similar scheme. We took from them a molecule that was ready for the clinic, undertook to conduct clinical studies of the first and second phases, that is, to prove the concept. If everything goes well, they reserve the world rights and pay us royalties for making a proof of concept, while the rights to the drug in Russia, Kazakhstan, Belarus and Ukraine remain with us. Here we commercialize the drug as we see fit: we sell a license or do the third phase of testing ourselves, register, produce and sell. We also pay royalties to Roche from sales in Russia and the CIS.

Are there any other companies like you in Russia that are trying to work according to this scheme, and have a certain portfolio of innovative drugs?I don't have any system information on this topic.

Of course, innovative drugs are being developed in Russia. However, I think it will be difficult to find companies with a technological platform and Western development experience, which the ChemRar Central Research Center has in Russia.

What is the problem? High risks. World industrial statistics say that the probability of success of the drug and its entry into the market from the moment of "entering a person", that is, from phase 1 of research, when the tablet was first tested on humans, is only 17%. That is, if you have launched less than ten projects, you have every chance of being left with nothing at the exit. Launched a dozen, then you can count on something. And if we take more accurate statistics on oncology and in other areas, there are also more modest figures – 7%, 10%, 12%, that is, less than ten drugs cannot be launched in these areas.

How much does it cost to conduct one project in pharma?The figure of a billion dollars appears in world statistics.

Although if you look more broadly, the range can be from hundreds of millions to 5-6 billion dollars. It all depends on the drug, how it started, what its history is.

If we take a billion as the most common figure, 50-60%, that is, 500-600 million is the cost of promotion. The actual development – from the discovery to the registration of the drug – costs hundreds of millions of dollars. At the same time, it is possible that some drugs are being developed for tens of millions of dollars.

But what is the meaning of the whole system. I named a figure – 17% of successful drugs. This means that in order to get one successful one, you have to incur the costs of 6 drugs, 5 of which will "come off" from the distance, and the costs for them must be attributed to the very one that will be successful. If we trace one drug by itself, it will turn out to be not so expensive, the cost is increased by unsuccessful drugs.

In Russia, we believe that tens of millions of dollars can be safely met. 10-25 million dollars – these are the figures that allow us to develop a normal, world-class drug.

Can you name the "hot" areas for innovative drugs, in which of them Russian enterprises can produce something?There are quite a lot of them.

For example, medications for specific types of cancer. The same pancreatic cancer – today there are practically no drugs for it. The most common types of cancers are lung cancer, breast cancer, prostate cancer. Of course, there are some drugs there, but we all understand perfectly well that, generally speaking, the situation is completely unsatisfactory, and if we manage to get a really effective drug with high safety, then the fate of a blockbuster drug is guaranteed.

Another niche is virology, the same hepatitis C – there is nothing targeted at all, and the disease is treated with immune stimulants (interferon and ribaverine). Currently, about 40 innovative drugs are undergoing clinical trials mainly in the USA. The cost of hepatitis C therapy with interferons starts from 20 thousand rubles a month, no one really understands all the mechanism of action and side effects, in most cases therapy does not work. Therefore, if an effective target drug appears, then a queue will immediately line up behind it.

The central nervous system, the same Alzheimer's disease, Parkinson's, and in general everything related to cognitive functions is almost completely zero. Current drugs allow, at best, to slow down the progress of these diseases, but we do not know how to treat them.

There are many so-called orphan drugs designed to treat rare diseases. Pharmaceutical companies are not willing to undertake the development of drugs from them, in the West various privileges have been introduced to developers so that they take up orphan drugs. In Russia, they are also going to introduce similar benefits in the hope of activating such developments.

In general, there are quite a few promising niches. We have chosen oncology, virology and diseases of the central nervous system. These are the areas where there are a lot of uncovered therapeutic needs or they are covered, but to an insufficient extent.

Will you be dealing with HIV drugs?We have one HIV drug.

We are currently in phase 1 testing. If it ends successfully, we will go to phase 2, prove the concept. If it works, we believe it will be a very serious drug.

It is a non-nucleoside reverse transcriptase inhibitor. Such drugs exist on the market, but they all have one big problem – the mutation of the virus. The virus adapts very quickly and the drugs stop working. In order for the virus to adapt to our drug, two or even three simultaneous mutations are required, which is unlikely. We tested our drug on virus strains resistant to existing drugs, in 92% of cases it copes with it calmly.

That is, it will be possible to carry out monotherapy of the virus with your drug, and it will be enough for patients to take one pill instead of several?We hope so.

Clinical studies will finally answer this question.

Portal "Eternal youth" http://vechnayamolodost.ru27.08.2010