United Press International - February 18, 2005
Charles Q. Choi

"The impact of nanotechnology on pharmaceuticals is not 10 years from now -- it's two or three," said Matthew Nordan, vice president of research at Lux Research, a nanotech analysis firm in New York City. "Pharma is treating nanotech as very ivory tower, but the rubber needs to meet the road."

"If this trend continues," Nordan added, "nanotech will play out in pharmaceuticals just as biotechnology did, with major pharmaceutical companies leaving money on the table and allowing new competitors to take root."

Yet nanotech presents many near-term opportunities to the big pharmaceutical companies, Nordan said.

As proven by Abraxane, the recently approved pharmaceutical from American Pharmaceutical Partners in Schaumburg, Ill., nanotech can lead to better drug delivery. Abraxane is made of nanoparticles containing the tumor-fighting drug paclitaxel bound to albumin protein. Abraxane can be taken without the toxic solvents normally used with paclitaxel, which means more of the drug can be taken with fewer side effects.

Moreover, companies such as Nanohorizons in State College, Pa., and Advion Biosciences in Ithaca, N.Y., illustrate how nanotech could help speed the eight to 12 years and $900 million required to develop a new prescription drug, with nano-electrosprays that improve mass spectrometry, the industry standard technique.

A number of startups, such as Kereos in St. Louis and Biophan in West Henrietta, N.Y., are creating nanostructures that can seek out specific cell types and deliver payloads, such as drugs or MRI-contrast agents, for more specific therapies or diagnoses. Other nanostructures serve as therapeutic agents in their own right. Australian firm Starpharma in Melbourne is developing branch-like nanostructures called dendrimers in a topical microbicide to disable HIV and other sexually transmitted diseases.

The U.S. National Institutes of Health considers nanomedicine one of its top five priorities, with its National Cancer Institute committing $144 million in nanotechnology research for fiscal year 2005, which began last Oct. 1. About 40 percent of nanotech venture capital since 1998 has gone to life-sciences startups as well, Nordan said.

In talks with 33 global corporations, however, each with annual revenues exceeding $5 billion, Lux Research found none of the six life-sciences firms interviewed rated nanotech as a top corporate priority, compared with over 75 percent of electronics and materials companies interviewed.

None of the life-sciences firms said their senior executives were highly aware of their nanotech efforts. Executives from only one of the companies thought nanotechnology required a strategic plan to exploit, compared with roughly two-thirds of those in electronics and materials.

Also, the pharma giants, on average, committed only 16 people and under one-half of 1 percent of research and development spending on nanotechnology, while like-sized electronics and materials firms committed more than 100 people and over 8 percent of their R&D funding.

Nordan suggested that big pharma ignores nanotech for three primary reasons: organization, history and hubris.

In terms of organization, "The immense cost of developing blockbuster drugs makes pharma companies singularly focused on improving drug discovery," he said. "As a result, they generally place accountability for all advanced technologies, including nanotechnology, in a group focused on this stage of their product pipelines. Because nanotech offers only modest improvements to drug discovery in the near term, these groups view its applications as minor advances."

In fact, Nordan continued, "nanotechnology's near-term revolutionary impact lies in drug delivery, but most big pharma companies' drug-delivery leaders are second-class citizens. The firms' institutional cultures hold that the hard work lies in discovering a proven active (drug). As a result, drug-delivery organizations typically lack the mandate, resources and executive support to do exploratory research into nanoscale drug-delivery mechanisms."

Intriguing, drug delivery could make drug discovery more efficient. Elan Pharmaceuticals in Dublin estimates up to half of all drug candidates show promise against their targets, but they cannot be taken up by the body because of poor solubility and are rejected at the early stages of the drug discovery process.

"You have a whole series of drug candidates that fell out of the pipeline, and nanoscale reformulation can solve that solubility problem and make them viable drug candidates again," said Sean Murdock, executive director of the NanoBusiness Alliance and one-time consultant to the pharmaceutical industry. "This is especially interesting in the current context of blockbuster drugs coming off patent. It could be an interesting way of reloading the pipeline with nano-reformulations."

During the biotech revolution, history taught pharma companies that they could avoid making investments and instead license drugs from startups at a late stage, paying 10 percent to 20 percent royalties in return for 70 percent to 90 percent gross margins on the drugs to which they acquired sales and marketing rights.

"This situation is changing," Murdock told Nano World. "You have this loss of blockbuster drugs coming and the search for novel and distinctive therapeutics, so there will be this competitive pressure for new drugs and pharma will have to pay more for innovation."

Last, most pharma executives dismiss nanotechnology as a new endeavor. Because nanotechnology is basically engineering at the scale of molecules, they say "they've already been doing nanotechnology for decades," Nordan said.

Still, he explained, "few pharmaceutical chemists or biotech geneticists would claim that they have experience in synthesizing nanomaterials, functionalizing them for uptake in the body and attaching target ligands and payloads to their surfaces. Nano-enabled pharmaceuticals require interdisciplinary skills that big pharma companies lack today."

For instance, Nordan added, "the techniques that pSivida (in Perth, Australia) uses to load drugs into its bioporous silicon are more closely allied with semiconductor manufacturing than pharmaceutical chemistry."

Then again, unmet expectations from overzealous nanotech startups might have poisoned the pond.

"Companies such as C Sixty (in Houston) with its fullerene technology and Altair (in Reno, Nev.) with its phosphate-binding titanium nanoparticles, were early and vocal proponents of nano-enabled pharmaceuticals, and have yet to deliver results despite years of effort," Nordan said.

"I think the wake-up call will come to pharma as analysts on Wall Street take a harder look at the relevance to the near-term and long-term," Murdock said.

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Nano World is a weekly series examining the exploding field of nanotechnology, by Charles Choi, who covers research and technology for UPI Science News.

E-mail: sciencemail@upi.com

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