Innovative pharmaceuticals: turn the arrow!

Medicine for innovation

Lilia Moskalenko, "Expert" No. 17-2012

In order to put the domestic pharmaceutical industry on an innovative track, it is necessary not to create a huge number of venture funds and clusters, but to build the infrastructure necessary for manufacturers and introduce the right taxes and tariffsIn the center of the laboratory on the table is a small plate divided into thousands of segments in the form of a grid.

"In each segment of the grid there is a single–stranded fragment of cell DNA that is responsible for the development of a certain type of cancer," the man in the white coat says matter–of-factly. – We take double-stranded DNA from the patient, translate it into a single-stranded form, attach a fluorescent label to it and put it on a microchip. In the presence of any complementary fragment on the microchip, the patient's DNA binds to it, forming double-stranded DNA and indicating the presence of a disease-related gene. This is how we identify potential targets of drug action. And we isolate the genes that interest us to create recombinant DNA." In a nutshell, the scientist of the American pharmaceutical company described one of the actual methods of production of biological drugs. It takes at least a billion dollars and fifteen years of work to bring one such drug to the market.

Soon such a high-tech and expensive production will appear in Russia. The government has designated the release of biological products as the main trend in the development of the domestic pharmaceutical industry. The share of Russian drugs in the domestic market should reach 50% by 2020. At the same time, 60% of domestic drugs should be innovative, created using biotechnologies.

Away from the outsidersTaking into account the fact that while the share of Russian drugs on the market does not exceed 20%, and biotechnologies in the country are just beginning to develop, the designated industry guidelines look very ambitious.

As soon as the pharmaceutical industry and biotechnologies became one of the priorities of the state's industrial policy, they began to acquire a large number of ideas, targeted programs and institutions designed to stimulate innovation. In particular, the government adopted the Strategy for the Development of the Pharmaceutical Industry of the Russian Federation until 2020 and the federal target program "Development of the pharmaceutical and medical industry for the period up to 2020 and beyond" (abbreviated "Pharma 2020"). This program provides for the investment of 120 billion rubles in the reconstruction of existing enterprises (primarily their transfer to international GMP standards), as well as in the development of research centers for the development of biological products. The government is also preparing a program for the development of biotechnologies until 2020 – "Bio-2020", the approximate amount of investments provided within its framework is $ 3.5 billion.

The government is trying to pull the industry out of outsiders and plans to spare no money for this (see chart). After all, the share of domestic medicines is no more than 20% in the pharmacy market and less than 10% in the public procurement market. Domestic pharmaceutical companies still produce mainly simple chemicals developed in the middle of the last century. At the same time, our manufacturers in the market are being squeezed by Indian, Chinese and Eastern European ones, which have lower costs. In fact, domestic manufacturers today survive in narrow market niches: for example, in the production of dietary supplements or simple medications such as iodine, corvalol, etc. At the same time, in recent years, about a dozen new biotech companies have appeared in the domestic pharmaceutical industry, which are engaged in the creation of innovative drugs. Under certain conditions, they could become the basis of a new technological structure in the industry. "If earlier 95 percent of orders for research work came from foreign partners, today we feel demand from domestic producers," says Dmitry Kravchenko, Director General of the Research Institute of Chemical Diversity. "Russian companies are already providing 30 percent of such studies, first on import–substituting, and now on innovative drugs." It seems that all efforts today should be aimed at helping new innovative companies develop their achievements. However, despite the steps taken, it has not yet been possible to create mechanisms for bringing domestic innovative drugs to the market.

Don't miss the waveBiotech is a powerful wave of innovation in the global economy, capable of changing many industries beyond recognition in the foreseeable future: energy, agriculture and forestry, food industry, pharmaceutical industry.

If Russia misses this wave, we will be forced to import bio-products in the same way as many industrial and information technologies were imported in the XX century, and we will again find ourselves outside the current technological structure.

Biotechnologies are developing best in the pharmaceutical industry: medicines occupy 25% of the global market of products produced using organic technologies. Biolecaries are products obtained using living organisms: proteins, DNA vaccines, monoclonal antibodies, peptide antibodies. New experimental approaches can also be attributed to biotechnologies in pharmaceuticals – gene therapy, stem cell-based therapy, the use of RNA viruses. Unlike conventional chemicals, the action of which is based on the suppression of certain processes in the body (for example, inflammation), biological products activate biological functions that help to cope with the disease.

"Information about the presence of certain mutations in the patient's genome allows us to create a drug using genetic engineering methods that purposefully affects the key areas of the metabolic pathway for the development of the disease, that is, to use a personalized approach to the treatment of the disease," says Maria Soft, medical director of Amgen in Russia. This is the principle of creating biological products.

Today, their share in the global pharmaceutical market is more than 20%, and it is growing faster than the share of conventional chemical drugs: at least 30% per year. This is due to the fact that biologics make it possible to fight the most serious diseases, such as AIDS, oncology, autoimmune pathologies, etc.

Bio-medicines are also effective in the treatment of common diseases, and they have significantly fewer side effects than traditional medicines. "The importance of antibiotics for healthcare will decrease as they stop coping with many bacteria," says Ilya Shpurov, president of Inpark, which includes Kraspharma. – In recent decades, bacteria have developed a number of specific substances that neutralize these antibiotics. And the toxic effects from the use of antibiotics are great. Therefore, in twenty years many traditional medicines will be ineffective."

Niche innovationsThe domestic market of biological products in comparison with the markets of developed countries is small – $ 2.2 billion, while in the USA, for example, $ 20 billion.

More than half of the Russian market consists of genetically engineered hormones (for example, insulin), coagulants and therapeutic enzymes. Slightly less than a billion dollars account for the sale of bioengineered drugs based on monoclonal antibodies (arising from a single plasma cell by cloning for the continuous production of identical antibodies with the same therapeutic properties).

The market is mainly owned by foreign companies – Pfizer, Novartis, Sanofi-Aventis, Roche, Amgen. Domestic manufacturers – "Biocad", "Binnopharm", "Pharmsintez", "Pharm-Synthesis", "Izvarino-pharma", "Petrovax Pharm" – occupy less than 10%.

Our companies work in the segment of diagnostic or preventive means, such as vaccines, bacteriophages, test systems, or recreate high-quality copies of Western therapeutic drugs. For example, the Moscow company Pharm-Sintez, which is working on the creation of first-generation generics, occupies almost half of the segment of hormone-dependent anticancer drugs, leaving global giants Novartis and Roche far behind.

According to the upcoming target program "Bio-2020", the local production of biosimilars in our country for import substitution purposes is 13% of the total volume of biological products.

There are practically no fundamental innovations among domestic companies – this is due to the high cost of searching for molecules and bringing them to market. Companies, as a rule, focus on finding new therapeutic properties of already known molecules or on new ways of delivering active substances to the body. In this regard, Russian companies quite often turn to nanotechnology – manipulations with molecules and structures of atomic scale, since they provide targeted delivery to a strictly specified cell. In the future, nanoscale delivery systems with receptors on their surface for recognizing the right cells will be able to deliver active substances to gene sites in strictly defined cell types. This will allow radical progress in the treatment of chronic, including hereditary, diseases.

"A drug for the treatment of liver cancer, and then its metabolites after absorption from the gastrointestinal tract are usually found not only in the liver, but also in other organs and tissues, which is absolutely unnecessary for the patient," says Igor Varlamov, CEO of Binnopharm. "With the help of nanotechnologies developed and mastered by us, the medicine is delivered directly to the liver." Moreover, nanotechnology sets new consumer properties for biological products. Biologics are complex large molecules that are destroyed when passing through the human gastrointestinal tract. Therefore, they are used intravenously or intramuscularly. "Nanotechnology will also make it possible to use drugs of polypeptide nature orally, like conventional medicines," says Orest Ibragimov, CEO of the innovative company Izvarino–Pharma, "and this allows them to be used to treat diseases not only in the acute, but also in the chronic stage, which means to expand the circle of patients who need this drug it might help. In addition, unlike conventional biological products, low-molecular substances are able to overcome the blood-brain barrier. Therefore, they can be used to treat brain diseases such as mental disorders and neurodegenerative diseases. That's what we're working on right now."

The state order is not enoughHow to increase the share of domestic biotech companies in the domestic pharmaceutical market?

This is a spectacular, but elusive goal: the production of biological products is fundamentally different from chemical synthesis. The search for the right molecule, its transplantation and then the creation of a cell line based on it, which, in fact, is a medicine – all these stages are unique in each company, they cannot be replicated. The risks are also high: only one out of ten new biopreparations can pass the preclinical period (animal trials) and one out of three – clinical (three-stage trials on patients).

Sometimes a company has to withdraw a drug from production at the final stage of clinical trials (for example, due to side effects detected), and it incurs huge losses. Both the registration of the drug and its serial production require large investments (for example, the production of biological products requires so-called cell cultures obtained by an expensive method of growing cells in the laboratory).

The main driver of pharmaceutical production is an increase in the state order for the purchase of innovative drugs, which is happening in Russia today. "The appearance of targeted programs has changed a lot in the pharmaceutical industry," says Orest Ibragimov, "the Ministry of Industry and Energy has begun to be interested in many developments that have been gathering dust on the shelves in research institutes for the past twenty years."

However, not all companies that have innovative ideas can count on government orders today. The state enters into contracts only with those who already have a significant research reserve, a developed dosage form, confirmed by preclinical and initial phases of clinical trials. Obviously, first of all foreign companies fall into this category, and not domestic ones, which are mainly at the level of startups. "The Pharma 2020 program does not create conditions for creating high-tech industries from scratch," Viktor Dmitriev, head of the Association of Russian Pharmaceutical Enterprises, is convinced. – There is no production base in Russia for the production of modern biological products. Even the generic production facilities, which are much better developed in our country, have long been outdated – only a third of them meet modern GMP standards." There is practically no infrastructure for preclinical research in Russia either: today there is a large vivarium in Pushchina, which belongs to the Institute of Bioorganic Chemistry of the Russian Academy of Sciences, and the All-Russian Scientific Center for Biologically Active Substances founded before the revolution in Staraya Kupavna. Companies that need to conduct preclinical tests are often forced to apply to foreign laboratories, which increases the already considerable research costs. There are practically no other types of research conducted in Russia, including research on cell cultures, since these cultures are not produced in the country.

Officials believe that there is a good foundation for the development of medical innovations in the country – scientific institutes and laboratories left over from Soviet times, around which medical and biological clusters can be formed. These institutes really have advanced developments – in genetic engineering, the study of monoclonal antibodies, and so on. For example, the Research Institute of Chemical Diversity ("Himrar") today offers many innovative developments, has a library of molecules on the basis of which you can create biological products. There are promising developments at many research institutes in Moscow, St. Petersburg, Perm, Tomsk. But their knowledge is not transformed into commercial products in any way.

Companies believe that it is more expedient today to focus not on clusters, but on demand. "Biotech startups will appear where there is demand, and not where officials are going to build clusters. It is not necessary that all the technological stages of drug production should be in one place. The division of labor on the planet today is such that it is sometimes more profitable to conduct tests in one country, and laboratory research in another. For example, we conduct some research at R&D sites in Israel and Denmark," says Orest Ibragimov.

Short ventureBut the availability of state orders and research institutes for the development of biotechnologies is not enough.

We need financial organizations that would allow us to provide intermediate stages of bringing new drugs to the market. In Russia, there is no practice of attracting private investment in startups, there is no institute of business angels. However, in recent years, numerous projects have appeared to finance innovations, for example, the Skolkovo Technopark, where biopharmaceuticals should become the leading direction.

However, so far innograd cannot provide companies with the production infrastructure they need so much, but only allocates the status of a "resident" and, if lucky, grants (they can reach up to 100 million rubles) startups that offer a "truly innovative idea." According to biopharmaceuticals, there should be no mention of production activities in the charter of newly minted residents of Skolkovo – this is carefully monitored at the selection stage. That is, in fact, Skolkovo is designed for R&D centers, and not for manufacturing companies. And this stops Russian startups: almost all of them left the manufacturing industry and turned to innovation only after they learned how to make money on the production of generics, having accumulated experience and financial resources.

However, the management of Skolkovo claims that over time it will be able to offer infrastructure services to companies. "We intend to build production facilities on the territory of the technopark, as well as a preclinical testing center, which we are developing together with the biological center of the Institute of Bioorganic Chemistry in Pushchina. The project will be funded by both the state budget and private investors," says Gelena Lifshits, director of medical programs at Skolkovo.

Startups are also repelled by the fact that the technopark does not yet have enough experts to select grantees. "We have developed a remedy for the treatment of diseases of the gastrointestinal tract. But Skolkovo told us that we cannot apply for a grant yet, because there are no gastroenterologists in the expert panel," says one of the developers of the biopreparation, who wished to remain anonymous.

And the tax benefits that Skolkovo offers to residents are not obvious. For example, the income tax is reset to zero for the first ten years. But during this period, biotech companies are conducting clinical trials of drugs, and they can't have any profit in principle.

Venture funds that are developing in the country today, primarily represented by Rusnano, the Russian Venture Company and other federal and municipal organizations, are also not always focused on innovation. Today, their budgets accumulate hundreds of billions of rubles, but companies complain that these organizations often do not have clearly defined criteria on the basis of which they can receive funding. At the same time, venture funds require guarantees that in five years the revenue from sales of a new product will be at least 250 million rubles. "No biotechnological laboratory can guarantee that it will make a successful medicine," the specialist, who wished to remain anonymous, is hot, "therefore, in Western countries, developers in case of failure have no obligations to venture funds. The investor only shares the risks of the startup or its successes. It is impossible to bring the drug to the market in five years. It will take about 12-15 years to conduct a full cycle of preclinical and clinical examinations."

For support to the WestIn search of investments, Russian startups often cooperate with Western pharmaceutical manufacturers.

For example, Izvarino-Pharma has signed an agreement with the largest Swiss company – the world leader in infertility treatment - to create a nanotechnology platform. Biocad cooperates with global Pfizer in terms of personnel training. Petrovax Pharm cooperates with Phizer in the production of innovative vaccines.

Such alliances are more profitable than applying to domestic venture funds. For a Russian company, this is an opportunity to receive development financing on adequate terms. "We are developing a certain technology for our partner that will allow him to produce drugs for women's health in a new, more convenient form. At the same time, innovation remains our intellectual property. Cooperation will allow us to establish the production and distribution of our drug," says Orest Ibragimov. Western companies are also interested in cooperation with local R&D centers, which, as a rule, are more mobile and creative than multinational giants.

However, cases of such cooperation in Russia are still rare. Mostly foreigners are more interested in our country as a market for medicines. The domestic pharmaceutical market is growing by 15-20% per year – more than five times faster than the European and American markets. Almost all representatives of Big Pharma have opened factories in Russia in recent years in order to be closer to the end consumer and localize production, as required by local authorities today. However, Western pharmaceutical companies are launching the simplest stages of production in the country, primarily packaging.

We need the right tariffs and infrastructureDomestic startup companies say that for the development of biotech in Russia, it would be more useful not to create numerous funds, but to build the necessary infrastructure: to create preclinical testing centers (vivariums), to establish the production of raw materials – cell cultures and organic preparations.

Today, young companies have to conduct preclinical tests abroad, and buy raw materials there, which increases their costs. According to businessmen, the right customs tariffs could stimulate their development. "Fundamental developments require certain chemically active substances, which are very difficult to import into Russia. Substances unregistered in Russia, even in gram quantities, can be imported only by letters of authorization from the Ministry of Health. Chemical ingredients for obtaining new medicines can be delivered by the so-called refusal letters of the department. Thus, in order to conduct an experiment, a scientist must submit an application to the Ministry of Health every time. The deadline for consideration of this application according to the regulations is five working days, in fact – up to four weeks. This, of course, slows down research work, – Russian biotechnologists say. – In addition, the biotechnological substance requires special storage conditions. Being at customs for several days, outside of these conditions, it loses its qualities. Therefore, Russian scientists often have no other choice but to import the substance from abroad in their personal luggage at their own risk." In order for the raw materials to be delivered to the scientific laboratory in a short time, accredited organizations must work in the country that will supply active substances by express mail, without authorization letters.

It is also necessary to optimize the import of equipment for the production of innovative medicines. Today, pharmaceutical companies can import duty-free equipment into the country if it fits the definition of "unique". But it is sometimes impossible to prove this uniqueness at customs. Therefore, companies have to pay 20 percent duties for it, which, given the high cost of equipment, amount to millions of dollars.

In addition to infrastructure, it is necessary to create the right regulatory framework in the field of biotechnology development in the country. Existing legal norms hinder this development: for example, the 94th law on public procurement is in force in the country, the key criterion of which is the price. "Why should a company strain with innovations when the main thing is to produce medicines at the lowest price? You can make generic generic drugs, that's all," Viktor Dmitriev is sure.

Portal "Eternal youth" http://vechnayamolodost.ru02.05.2012