Innovation in the pharmaceutical industry has come a long way in the last few decades, but with the saturation of medical technology, a slowdown as is being witnessed now was definitely inevitable. Big pharmaceutical companies are suddenly looking to collaborate at all levels to spark innovation.
Several companies have formed partnerships to advance new drug innovations including Medtronic plc (NYSE: MDT), Abbott Laboratories (NYSE: ABT), Zynerba Pharmaceuticals (NASDAQ: ZYNE), and Aequus Pharmaceuticals (OTC: AQSZF ) (TSX.V: AQS).
According to leaders in the field, by partnering with smaller companies that are innovation-rich, big pharma companies not only get access to novel ideas but do so at a fraction of the cost.
This is a big driver of innovation and major new drugs and therapies that contribute to better overall global health.
Leaders advancing this approach include Medtronic plc ( NYSE: MDT) that manufactures and sells device-based medical therapies, Abbott Laboratories (NYSE: ABT), which makes diagnostic devices and offers branded generic pharmaceuticals; along with and Zynerba Pharmaceuticals (NASDAQ: ZYNE).
A solid example of collaboration with a smaller company is Aequus Pharmaceuticals (OTC: AQSZF) (TSX.V: AQS), a pharmaceutical developr advancing novel delivery and a product pipeline with two significant partnerships; Supernus Pharmaceuticals (NASDAQ: SUPN), for the in-license Canadian rights to Supernus’s two epilepsy medicines, Topiramate XR, and Oxcarbazepine, and a separate deal with Corium International (NASDAQ: CORI).
Japanese pharma giant Takeda Pharmaceutical is one of the big companies that have led this push, signing more than 65 such collaborations in the last year and a half.
LOOKING FOR INSPIRATION
In recent years, there has been an observable trend where breakthroughs are happening outside big pharma environments, with small companies and academia taking the lead.
In order to reinvigorate their innovation portfolio, big pharma companies have been looking to partnerships with smaller companies with breakthroughs in new areas that have high innovative leeway such as drug delivery systems and treatments for neurodegenerative diseases.
Japanese pharma giant Takeda Pharmaceutical is one of the big companies that have led this push. Their partnerships take many different forms and are cut with players of all sizes, from one-person start-ups to universities and biotech companies. The company takes up ideas in all stages of research development, from earliest stages to market stage logistics.
Takeda usually takes the initiative to reach out to promising institutions, but cases where the other party contacts them first are becoming more common.
Takeda’s main areas of interest are oncology, CNS conditions and gastroenterology.
In one of the deals, Takeda is partnering with BioSurfaces to develop various drug-delivery systems for people with gastrointestinal illnesses.
Another deal, signed with AstraZeneca to help develop an antibody treatment for Parkinson’s disease represents another approach that Takeda is using to keep it at the forefront of biotech innovation.
Daniel Curran, senior vice president and head of Takeda’s Centre for External Innovation points to a prevailing trend where the majority of drugs approved in the last decade have been developed by small companies and academia.
Curran attributes this to high overhead and infrastructure costs associated with the structure big pharma, which diverts resources from innovation.
COLLABORATION CASE-IN-POINT: AEQUUS
Aequus Pharmaceuticals is a junior pharmaceutical company that has leveraged its collaboration to advance transdermal delivery systems.
Among the eight ongoing product programs in Aequus’s portfolio, four utilize a transdermal delivery system: AQS1301 (Transdermal Aripiprazole); AQS1302 (Transdermal Clobazam); AQS1303 (Transdermal Pyridoxine/Doxylamine); and AQS1304 (Transdermal Medical Cannabis).
By utilizing a patch, patients can have higher confidence in their dosages, especially with drugs that require multiple dose times during the day. A patient tied to the clock, over and over during the day, is much more susceptible to missing a dosage, and likely reducing the effectiveness of their medicine.
In the case of AQS1303, the transdermal form aims to replace a medication that is normally taken orally—up to four times a day.
Both AQS1301 and AQS1302 could be very important to their patients, as they both deal with neurological disorders that depend heavily on dosage consistency (schizophrenia, bipolar, depression, and epilepsy).
The company’s early collaboration with such large partners adds fuel to the investor interest as well.
HITTING THE MARK
This model of big to small collaboration is beneficial for all parties. It’s just a question of guiding the right growth.
Smaller companies often lack the resources to push their innovations through the full process of research and development, hence collaboration with moneyed companies helps to accelerate their development to market.
Big pharma on the other hand get in on the ground floor of promising innovations that help to keep their R&D costs down and open up new revenue streams. The entire healthcare industry is set to benefit from these partnerships, with novel biotech breakthroughs coming out to help deal with hard-to-treat conditions better.
Such partnerships will be increasingly important for critical breakthroughs in the healthcare industry.
The next push for global health improvement will be dependent on innovations in previously overlooked or already saturated areas of medical technology. Refining already existing technologies such as drug delivery systems like the innovations by Aequus Pharmaceuticals promises to yield the next wave of mass healthcare improvements akin to what was witnessed after the discovery of antibiotics.
With companies like Takeda directing requisite capital towards promising innovations in these areas, such a breakthrough does not to be far off.
POTENTIAL COMPARABLES
Medtronic plc (NYSE: MDT)
Medtronic plc manufactures and sells device-based medical therapies to hospitals, physicians, clinicians, and patients worldwide. The company’s Cardiac and Vascular Group segment offers implantable cardiac pacemakers, cardioverter defibrillators, and cardiac resynchronization therapy devices; diagnostics and monitoring devices; mechanical circulatory support, TYRX, and AF products; and remote monitoring and patient-centered software. It also provides transcatheter heart valves, percutaneous coronary intervention stents, surgical valve replacement and repair products, endovascular stent grafts, peripheral vascular products, and products to treat superficial and deep venous diseases. Its Minimally Invasive Therapies Group segment offers surgical care, wound closure, electrosurgical, hernia mechanical device, mesh implant, ablation, interventional lung, and care solutions. The company was founded in 1949 and is headquartered in Dublin, Ireland.
Abbott Laboratories (NYSE: ABT)
Abbott Laboratories manufactures and sells health care products worldwide. The company’s Established Pharmaceutical Products segment offers branded generic pharmaceuticals to treat pancreatic exocrine insufficiency; irritable bowel syndrome or biliary spasm; intrahepatic cholestasis or depressive symptoms; gynecological disorders among others. Its Diagnostic Products segment provides immunoassay and clinical chemistry systems; assays used to screen and/or diagnosis cancer, cardiac, drugs of abuse, fertility, infectious diseases, and therapeutic drug monitoring; hematology systems and reagents; and a suite of informatics tools and professional services. The company’s Nutritional Products segment provides pediatric and adult nutritional products. The company was founded in 1888 and is headquartered in North Chicago, Illinois.
Zynerba Pharmaceuticals (NASDAQ: ZYNE)
Zynerba focuses on developing and commercializing proprietary synthetic cannabinoid therapeutics formulated for transdermal delivery. Its product candidates include ZYN002, which is in Phase II clinical trial for adult patients with refractory epileptic focal seizures and osteoarthritis, as well as pediatric patients with fragile X syndrome; and ZYN001 that is in preclinical stage for the treatment of fibromyalgia and peripheral neuropathic pain.
For a more in-depth look into AQS you can view the in-depth report at USA News Group: http://usanewsgroup.com/2018/02/15/the-biggest-biotech-trends-analysts-are-talking-about/
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