Merck's strategy for increasing its research and development productivity relies upon gaining more information about compounds and targets earlier in development, Merck Research Labs President Peter Kim said Dec. 12.

"The underlying strategy is to figure out how to improve the probability of success [and] ... to actually have more clues before you start," Kim said during an investor meeting in Whitehouse Station, N.J.

Kim drew a parallel between pharmaceutical R&D and drilling for oil. "The only other business I've been able to come up with that's even close is the business of figuring out where to drill for oil because it involves geophysicists who are really, really smart; it involves really intense technology; and it's a really low probability of success," he said.

"It takes a lot of money to drill for oil and most times, you don't draw it. When you do hit, you hit big and eventually the well dries out, so there's a lot of parallels."

Just as with drilling for oil, "the question is 'How can you increase the probability of success?' If we can increase the probability of success just a little bit, that's a major impact on us long-term," Kim said.

Kim identified three components of the firm's strategy to increase the probability of success: proof of concept molecules, disease and target proof of concept tools, and reducing development cycle time.

Proof of concept molecules "do not have the necessary characteristics to become a drug, but they can be used to test the hypothesis in humans with a more limited pre-investment," he explained.

Examples of such molecules include monoclonal antibodies and compounds that can only be administered intravenously, have poor pharmacokinetic properties or a limited patent life, Kim said.

Merck hopes to develop disease and target proof of concept tools for each of the firms "research franchises," Kim said. Merck's R&D efforts are focusing on nine priority disease categories (¹ Also see "Merck Expects Expedited Filing Of HDL-Cholesterol Drugs Using Existing Data" - Pink Sheet, 19 December, 2005., p. 5).

"What one would like to have is a way to prioritize drug targets, prior to entering these large and expensive clinical trials," he said. "Ideally, what we'd like to have is a set of predictive biomarkers to evaluate and prioritize drug targets at the early stages of clinical development," he said.

"We were all reminded of that earlier this month," Kim noted, referencing Pfizer's decision to terminate development of its headline cholesterol combination product torcetrapib/atorvastatin due to increased mortality risk (² Also see "Pfizer’s Lipitor Extension Shot Down By Failure Of Torcetrapib Silver Bullet" - Pink Sheet, 11 December, 2006., p. 3).

One disease proof of concept tool the company is studying is plaque samples taken from the legs of patients with peripheral arterial disease.

"We have already been able to show that atherosclerotic plaque that is removed from diabetic patients can be distinguished from non-diabetic patients," Kim said. "In particular, we have found that there is a set of genes that are involved in new cell activation processes that are upregulated in patients with diabetes."

"By monitoring the effect of drug treatment biomarkers, such as plaque samples, by continuing our investments of genomes, we are aiming to develop new methods to prioritize our atherosclerosis drug targets prior to Phase II," Kim said.

Kim noted that the development of predictive biomarkers is particularly important for the firm's atherosclerosis franchises, which require large, expensive and lengthy trials. Merck has two late-stage atherosclerosis programs (³ Also see "Merck To Await Additional Torcetrapib Data Before Advancing CETP Agent" - Pink Sheet, 18 December, 2006., p. 6).

The exec added that Merck was also looking to develop imaging tools to eventually be able to identify certain types of atherosclerosis patients and optimize their treatment.

During last year's investor meeting, Merck announced an initiative to reduce cycle times and increase throughput by 20% without increasing costs.

The initiative called for reducing cycle times for late stage development by seven months by the end of 2006, and by an additional two months by the end of 2007.

"We have surpassed our seven month goal substantially, and we've actually achieved a 10.7 month cycle time reduction," Kim reported. "Moving forward we still anticipate reducing the cycle time in 2007 by another two months, and we are well on our way to obtain the 20% increase in throughput in late stage development without increasing costs."

CEO Dick Clark highlighted the company's fast and successful launch of the first-in-class DPP-4 inhibitor Januvia (sitagliptin) as an example of the reduction in development cycle times. Januvia cleared FDA in October for treatment of type 2 diabetes (⁴ Also see "Januvia Clears FDA; Sitagliptin Has “Neutral Effects” On Weight, Agency Says" - Pink Sheet, 23 October, 2006., p. 6).

"If Januvia had taken the development course typically found at major research pharmaceutical companies, it would still be almost four years away from market," Clark maintained.

In focusing on reducing cycle times, Merck is taking a slightly different approach to improving R&D output than Pfizer, which is working to reduce clinical attrition rates.

Merck is also continuing to focus on streamlining and industrializing its development processes in an effort to reduce costs and increase speed. "We have been making a concerted effort to put in place industrialized robotic systems to focus on decreasing costs through assay miniaturization, standardization and the application of lean six sigma concepts," Kim said.

The company is now seeking to build upon its streamlining efforts by industrializing research technologies. Specifically, the company has been utilizing RNA interference technology to enhance drug target discovery.

"We've incorporated this technology into an industrialized genome-wide capability," Kim said, noting that in both 2005 and 2006, Merck carried out over 600,000 RNAi assays. "To the best of our knowledge, Merck is conducting more RNAi screens than any other organization by far."

"The practical application of this capability is ... if a biologist has an assay that is indicative of the disease process," then the researcher can "use the system to knock down the expression of 22,000 human genes, one at a time," he explained.

Kim cited Alzheimer's disease as one area where RNAi has been beneficial. "Using this RNAi screening technology, together with the molecular profile capabilities that we obtained with our acquisition of Rosetta, our scientists have interrogated disease pathways associated with build-up of amyloid, a protein involved with pathogesis of Alzheimer's disease. This interrogation has led to the identification of completely new, proprietary, drug targets."

- Kathryn Phelps

Merck To Improve R&D Output By Having More Clues At The Start

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