Pharma’s Cutting Edge

I remember back in the late 1990’s being intrigued by the science behind Onyx’s lead product, Onyx 015, an adenoviral-based therapy for head and neck cancer. To this day, I consider the underlying concept behind 015 ingenious; too bad that ingenuity does not a successful drug make. When 015 was eventually killed in 2003, it signalled the beginning of the end of Onyx. No wait. That didn’t happen, did it? We all know what actually happened, Onyx wasn’t done in by the loss of their lead product; they succeeded this week in taking a drug to market. Why did Onyx succeed? What can other development-stage companies learn from Onyx’ experience, and can it be replicated today? I don’t have all the answers, but I do know that Onyx was never a one-trick pony. Spun off from Chiron in 1992, from the beginning Onyx pursued more than one line of discovery research. Sure, viral-based oncology products were their initial focus, but they also made concurrent substantial investments in small molecule research related to cell cycle regulation, including a collaboration with Bayer that began in 1994 aimed at discovering novel ras pathway modulators and other (not-to-be) collabortions with Warner-Lambert and Pfizer. Tuesday’s approval of Nexavar is the culmination of the Bayer collaboration. So, the strategy of pursuing multiple lines of discovery research can succeed in a startup. But can that model be replicated anew today? It’s increasingly tough to do. In fact, if Onyx hadn’t been spun out from Chiron, I’m not sure we’d be celebrating its success today. The limitation is money. Discovery research is very expensive and very risky. Increasingly, early-stage investors are unwilling to focus risk in any single management team; they’d rather spread out risk among different small organizations, each focused tightly on one one target, chemical class, or technology platform. So, we’re seeing lots of one-trick ponies springing up, each with enough just-in-time funds to carry out their primary mission. Startups with cash for multiple robust discovery programs are the exception today, and maybe it’s for the better. We won’t know for several years down the road. In the meantime, we can celebrate Onyx’ success and admire their tenacity. This is likely to be my last note in 2005. I wish all of you a very happy holiday and look forward to sharing 2006 with you. Until then.