Pharma Ins and Outs Neuroscience
Krzysztof Potempa
Dreamster dedicated to the prevention and treatment of mental health disorders that affect at least 1 in 6 people worldwide!
Last Updated: 28 December 2024
A ‘renaissance in neuroscience’ could deliver a fresh crop of psychiatric medicines
In the early 2000s, as America warmed to the sounds of Shakira, “the mindset of Big Pharma was one pill for millions. Everyone was looking for the next Lipitor, and when that fizzled out, there was an exodus out of psychotherapeutic areas” says John LaMattina, senior partner PureTech Health, author & former president of Pfizer Global R&D (14).
To help new capital form investment decisions, Deloitte has studied the global neuroscience market (GNM) across segments and regions. The analysis indicates the GNM was worth $612 billion in 2022 and could grow to $721 billion by 2026, returning an aggregate compound annual growth rate of 4.2 percent across segments (ranging from 3.5 percent for behavioural therapy services to 27.8 percent for digital health) (30)
Timeline
In 2010, GlaxoSmithKline and AstraZeneca announced the closure of all their neuroscience research divisions globally. Pfizer and Merck, as well as the French company Sanofi, also pulled back on research into brain disorders. Rather than abandon neuroscience, however, Novartis said it would launch new programmes to study the genetics of psychiatric and cognitive disorders, in the hope of identifying new treatment strategies (1). Johnson & Johnson is one of the few major international firms keeping the faith, where Husseini Manji, says that “things are cyclical — for those who stay the course, the breakthroughs will finally come”.
2012: AstraZeneca cut way back on neuroscience, reducing the number of investigators it has in the field to a mere 40 or 50 in Boston and Cambridge, U.K. as it created a new a "virtual" neuroscience iMed team (2)
In 2013, Bristol-Myers Squibb left neuroscience.
2018: In January, Pfizer pulled out of neuroscience drug discovery and early development, cutting 300 positions in its neuroscience division (3). In October 2018, Pfizer teamed with investment firm Bain Capital to create a new company composed of its neuroscience assets and funded with $350 million from Bain. Its name: Cerevel Therapeutics, derived from the phrase “cerebral revelation,” explained Bain Capital Life Sciences Managing Director Adam Koppel. Pfizer's Doug Giordano, its senior vice president of worldwide business development, and Morris Birnbaum, chief scientific officer of internal medicine joined the biotech spin-out. The new company got about 10 programs in neuroscience and neuropsychiatry from Pfizer, including three already in clinical trials (4)
2019: Amgen's R&D head David Reese communicated that Amgen is stopping the vast majority of its neuroscience research, as company executives concluded their efforts are unlikely to yield long-term success (5). Around one-third of the Fierce 15 class of 2019 had some involvement in neuroscience R&D, and a scan of the mental illness and neurological disorder pipeline reports from PhRMA shows small players account for a significant share of assets in development (15). Pfizer neuroscience drugs saw revenues shrink from $6.4 billion in 2017 to $4.1 billion in 2019 (24).
2020: In January, Jacob Bell reported that while many large drugmakers no longer invest heavily in neuroscience, some biotech executives--Steven Paul at Karuna Therapeutics, Jeremy Levin at Ovid Therapeutics, Richard Peters, former head of rare diseases at Sanofi Genzyme and current CEO of Yumanity, and Vlad Coric at Biohaven Pharmaceutical-- expect that to change (6). For example, Roche Pharmaceuticals CEO Bill Anderson thinks neuroscience has the potential to be in the '20s what oncology has been in the last decade (7). Novartis buys neuroscience company Cadent for up to $770 million (26). Pfizer spinoff Cerevel to raise $445M in merger with blank-check company | BioPharma Dive
2021: Arch Venture Partners took the lid off its big bet on neuroscience. Having quietly put the startup together over 18 months, Arch unveiled Neumora Therapeutics—a biotech that starts life with $500 million, a collaboration with Amgen and a pipeline of eight prospects (17). The main goal is to develop precision small-molecule therapies for brain diseases (18). ?
2022: In January, Ovid paid AstraZeneca $5 million in cash and $7.5 million in stock to access a library of early-stage small molecules targeting the KCC2 transporter, including lead candidate OV350. AstraZeneca stands to receive milestones adding up to more than $200 million and retains an option for a strategic collaboration (11). Several neuroscience biotech start-ups have attracted investment from pharma and venture capitalists resulting in a number of high-profile acquisitions including AbbVie's $1 billion acquisition of Syndesi Therapeutics to gain access to SDI-118 (12). In May, Pfizer bought migraine partner Biohaven for $11.6 billion, betting on CGRP drugs in grand return to neuroscience (25).
2023: "BMS has been investing in neuroscience for several years now. Obviously, we have [multiple sclerosis medicine] Zeposia … but we actually have four programs that are about to enter Phase 2 development, all in the neuroscience disease area — one in Alzheimer’s disease, another in ALS and then two others. And so with Zeposia and with this emerging portfolio, we have the underpinnings of a robust neuroscience pipeline, which we're looking to expand. We have a dedicated discovery team within the organization. We have some outstanding neuroscientists focusing on our internal portfolio, as well as the work we do with our collaborators at Evotec and Insitro, with several of our academic collaborations and with our broader interactions with the biotech ecosystem." Ken Rhodes, Bristol Myers' Vice President of Neuroscience Research (20). Bristol Myers Squibb pulled the trigger on two neuroscience options, paying Prothena $55 million for a global license to a clinical-phase Alzheimer’s disease drug candidate and handing Evotec $40 million for rights to certain late-stage discovery programs (21). BMS closed the year by acquiring Karuna for $14 billion (22). AbbVie swoops on Pfizer spin-out Cerevel with $8.7bn offer | pharmaphorum
2024: The period from December 2023 to June 2024 saw increased commercial activity, particularly from big pharma companies, focusing on therapeutic approaches to tackle these unmet needs (27). Novartis’ R&D chief Fiona Marshall, Ph.D., says the company has been “pretty aggressive and active” in neuroscience-focused business development, looking for a boost to one of the company’s four key therapeutic pillars (23). Novartis acquired Kate Therapeutics for up to $1.1 billion in a deal that expands the buyer’s presence in both neuroscience drug development and gene therapy. Novartis paid $1 billion upfront in a licensing deal for an experimental Huntington’s disease treatment from PTC Therapeutics. BMS ends decades-long drought in novel schizophrenia drugs | pharmaphorum
Neuroscience M&A-A hard pill to swallow
Mergers and acquisitions (M&A) in neuroscience hasn't been as attractive as it has with cancer drugs or, lately, cell and gene therapy. There have been 12 neuroscience acquisitions valued at $1 billion or more since 2009, according to Pitchbook, whereas oncology saw at least four deals of that size since December alone (9) "Anytime a company pays a large premium for a pipeline-stage company, it's a credit negative event. There are still R&D hurdles and the risk that the commercialization is not successful, even if the drug is approved" says Michael Levesque, a senior vice president at Moody's (9)
As Big Pharma Abandons Neuroscience, Can Biotech Provide Answers?
"I think the idea that neuroscience is withering and wilting is actually untrue. There are challenges in large pharma, that’s for sure, but I think in biotech, neuroscience is flourishing. “The challenge in neurodegeneration is how to get an early indication of efficacy. Every single thing needs to line up preclinically, because if it’s not lining up preclinically, it’s definitely not going to line up in the clinic. You do see a number of companies or academics who try and shortcut. They might not do a pharmacokinetics study, which I know is really boring, but it’s absolutely critical. If you put a lot of effort into an early discovery effort, ultimately you got to persuade something to write a large check to run a quite expensive clinical trial. Coming up with the best evidence early on that this is likely to work in humans is what you need.”?says John Isaac, Senior Director of Neuroscience External Innovation (10)
“For the most part, the money is not going to come from the J&Js or the Mercks, but the expertise can. If the small biotech that’s seed-funded goes and talks to pharma about what they’re doing, all of these concerns and ideas and risks will come forward”? points out Lesley Stolz, CBO of Annexon Biosciences (10)
“Multiple sclerosis has been maybe the most successful indication in neurology in general because we have such a powerful biomarker. In phase II, you can see whether your drug works or not. That has helped put almost 18 drugs on the market, which is not the case in other indications.” says Marie Trad, Vice President at the contract research organization IQVIA (10)
“The major difference is that if you just look at the sheer number of publications in oncology compared to neurodegeneration, it’s probably tenfold higher. That is a direct correlation with success – an increase in understanding,”?said Jill Richardson, Senior Director of Discovery Research at MSD (10)
Big pharma backed away from brain drugs. Is a return in sight?
“These days, it does seem like pharma is increasingly interested in the orphan business model. If there were products that seemed like they’d be very successful orphan therapies in neuroscience, I think pharma would probably be interested in acquiring those”-Phil Nadeau of investment bank Cowen & Co (6).
“My cautionary point on the whole hype-train surrounding monogenic CNS diseases is: the more we’ve dug into them, the more we’ve realized they’re not as simple as you might hope,” Stifel analyst Paul Matteis (6).
“The risk is pharma swoops in and buys companies at lower valuations, extracts the value, and then you might be in the cycle. They’ll keep you as long as neuroscience is important to them, and then they’ll be out of it again” -Vlad Coric, CEO of Connecticut-based Biohaven Pharmaceutical (6).
Other expert opinions
“Progress based on neurotransmitters has become small and incremental. Genetic analysis will provide a real scientific opportunity in psychiatric and cognitive disorders, even if new drugs only arrive in the distant future” —Mark Fishman, president of the Novartis Institutes of BioMedical Research (NIBR) (1)
“Standard approaches to developing drugs for mental health have not reaped significant benefit in the past two decades. But it is a dilemma for the companies because there is a large and growing market for these products” says Ken Kaitin, director of the Tufts Center for the Study of Drug Development in Boston, Massachusetts (1)
“We are certain that the rewards will come and I’m glad we will be well-placed to enjoy them. We need a critical mass of companies there when the new targets come,” NEWMEDS coordinator Tine Bryan Stensb?l, director of research at the Danish pharmaceutical company Lundbeck in Valby (1)
"Things are cyclical — for those who stay the course, the breakthroughs will finally come" Husseini Manji, head of neuroscience at Johnson & Johnson (1).
"The basic science is such that it's quite difficult to identify a new target, so you start with your hands tied behind your back." Vallance also cites problems with unrealistic animal models, unpredictable results from early trials and difficulties in diagnosing and allocating patients to trials. "At every stage of the process your risk is very much higher" for brain disorders than for other conditions, says Patrick Vallance, head of medicines discovery and development for London-based drug giant GlaxoSmithKline, which stopped funding drug-development programmes in psychiatry, pain and cognitive neuroscience in 2010 (16)
“Biopharmaceutical research companies have a decade-long commitment to advancing medical innovation for neurological and mental health disorders. Any notion that the biopharmaceutical industry has abandoned neurological or mental health research is grossly misinformed,” Andrew Powaleny, Senior Director, Public Affairs, PhRMA (19)
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“It is true that a few big pharma largely exited neuroscience, but there are nuances. GSK has left but has quietly revived some neurodegeneration research. Likewise, BMS exited but continues to support some CNS research via its subsidiary, Celgene. Pfizer has exited, other than for rare diseases and some venture funding. Astra Zeneca has left, other than for a few lightly funded research collaborations. It would be more true to say that many pharma companies have stopped working in Psychiatry (GSK, BMS, Eisai, Roche, Sanofi, Takeda, Lilly)—largely because the areas of depression and schizophrenia were so dominated by generic drugs in the US, but companies like Biogen and Novartis have increased their investment in Psychiatry. To some degree the industry has de-emphasised in-house research, seeing it as too expensive, and outsourced discovery to small companies, preferring to partner promising programs. Thus in 2010, large and midsize pharma firms made $400 million in upfront payments for neuroscience partnerships. In 2020, the total was almost $4 billion, essentially ten times what it had been a decade earlier. Most of these partnerships have been for neurodegenerative programs, though in 2020, a considerable portion went to Psychiatry, largely because of a single hi-profile partnership between Biogen and Sage Therapeutics. Overall, I would say that there was a considerable withdrawal of big pharma focus from neuroscience during the period 2011-16, but there has been a revival of interest and investment in neuroscience from 2017 on” Dr Harry M Tracy, President, NI Research (19)
"I don't see a mass exodus of pharma and biotech out of neuroscience. Quite the opposite, the field is becoming increasingly competitive, especially in neurodegenerative disorders, multiple sclerosis, pain & rare diseases of the nervous system"—Morgan Sheng (3)
“We’re seeing a resurgence of interest in central nervous system disorders, and for folks that have been in that space for some time, we’re delighted to see investment coming back” Gene Kinney, CEO, Prothena Biosciences (28)
“I’ve never seen a more exciting milieu of drug development.” Dr. Jeremy Levin CEO, Ovid Therapeutics (29)
"Alzheimer’s disease drug candidates have one of the highest failure rates of any disease area (i.e., 99.6 percent). What we need are ways to investigate drugs alone and in combinations in smaller studies that hopefully tell us the biology is moving in the right direction, and that there might be some benefit beyond the single agent. But the field isn’t there yet, and we don’t currently have the validated progression biomarkers to better guide clinical investigation. But we may soon have what’s needed to run proof of concept (POC) studies like we do in other diseases. In Schizophrenia for example, you can run a six-week to 12-week study with 100 patients per arm just to see if anything is there. It doesn’t mean that everything will work out down the road, but at least in other indications you can do such a study. As it stands right now, we can’t do short smaller studies and have any predictive power when it comes to delaying/preventing neurodegenerative diseases"-Darryle Schoepp, Merck’s VP & Head Of Neuroscience Research (31)
“When the marketing team decided that schizophrenia drugs would not be easy to sell, such projects—no matter how promising scientificall —were stopped. It turned out that their sales estimates were completely wrong” —Tamas Bartfai, CNS Research Head Roche (32)
Pfizer’s chief scientific officer for neuroscience research Mike Ehlers suggests that big pharma companies exits “are shortsighted as to where the actual, fundamental state of biology is in neuroscience.” As the underlying genetics of CNS diseases become clear, the knowledge “will become catalytic” (33)
"Neurological research in general has an extremely high failure rate, led by Alzheimer’s. We may need to wait for smaller firms willing to take the risk to develop a validated target before several large-caps get involved again"-Amit Roy, analyst at Foveal (34)
Neuroscience-Pharma Headlines 2024
Novartis 'pretty aggressive' in neuroscience BD, R&D chief says (fiercebiotech.com). Within neuroscience, Novartis’ priority is on multiple sclerosis and neurodegeneration, not as much in neuropsychiatric, Marshall explained.
November 2024: Novartis wagers more than $1B on gene therapies for the nervous system | BioPharma Dive; GSK partners with Flagship startup to hunt for Parkinson’s drugs | BioPharma Dive
December 2024: Novartis back in Huntington's with $1B licensing deal with PTC; AbbVie Completes Acquisition of Aliada Therapeutics
Neuroscience-Pharma Headlines 2023
January 2023: Neurocrine Biosciences and Voyager Therapeutics Enter Strategic Collaboration for Development and Commercialization of Voyager’s GBA1 Program and Other?Next-Generation Gene Therapies for Neurological Diseases | Voyager Therapeutics Inc. and Pharma Industry News and Analysis | FirstWord Pharma
July 2023: Biogen to acquire rare disease drugmaker Reata for $7.3B | BioPharma Dive (Friedreich’s Ataxia)
Novartis Acquires DTx Pharma in Potential $1B Deal | BioSpace and Novartis buys a preclinical biotech and its RNA drug technology | BioPharma Dive and Here’s Why Novartis Is Paying $500M to Acquire a Preclinical RNA Startup - MedCity News
September 2023: Roche bets on Ionis RNA medicines with neuroscience deal | BioPharma Dive and Genentech sticks molecular glue deal with Orionis for $47M upfront (fiercebiotech.com)
October 2023: Bristol Myers’ neuroscience research head explains the big pharma’s return to brain drugs | BioPharma Dive
Neuroscience-Pharma Headlines 2022
March 2022: AbbVie bets $130M on UCB spinout, bagging early-phase Alzheimer's and depression prospect | Fierce Biotech
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