Forbes ran an interesting article about Genentech that shows how it pursues a different path than traditional Big Pharma companies like Pfizer and Merck, which market drugs to the masses. Genentech takes a very different approach by foregoing mass-market medicines in favor of drugs specific for severe diseases even if that limits the market potential. Something must be working since Genentech racked up $6 billion in sales last year.

Chief Executive Arthur Levinson summed up the strategy for bringing a drug into trial as “98% science, 2% commercial.”

Earlier, Genentech began a new strategy to speed the development of breakthroughs by testing combinations of multiple experimental cancer drugs simultaneously in new tumor types, instead of waiting for each one to be approved separately before combining them. The hope is that modulating multiple disease genes at once with highly targeted drugs will increase the chance of long-lasting remissions or even cures. Ultimately, the hope is that new combinations of gene-targeted drugs will be available with fewer side-effects to replace more toxic chemotherapy regimens.

This combinatorial strategy may have an additional side benefit of extending the exclusivity of the drugs. Since a new combination of old drugs can be patentable in its own right, it may be possible for some combinations to gain 20 years of patent protection even as the individual components fall into the public domain. This could spur research into drugs that otherwise would not have been economically feasible to develop due to the lack of market protection. Developing new combinations is different from the practice of layering where drug companies develop a new use or different version of their old drug.

In terms of patent term extension for combination products, though, at least one of the active ingredients (including any salt or ester of that active ingredient) of the product must have not been previously approved by the FDA to be eligible for term extension, based on the approval of the combination product, and then only the patent covering the newly approved component or the combination of components may be extended.

Genentech must be doing something right. It has developed three of the most important targeted cancer drugs to date, e.g., Herceptin for breast cancer, Rituxan for lymphoma and Avastin for numerous tumor types. Sales of Avastin could hit $4.7 billion by 2009.

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