We just finished reading a terrific academic piece by Jack Scannell and colleagues at the University of Oxford. Entitled Financial Returns on R&D: Looking Back at History, Looking Forward to Adaptive Licensing, the authors discuss adaptive licensing in the context of historical returns on R&D in our industry. (Email us if you would like a PDF copy.)
So what is Adaptive Licensing?
The authors provide an excellent explanation (with our emphasis),
Adaptive Licensing structures clinical development around a graded, but prospectively planned, introduction of a new drug as evidence on its risk-benefit profile accumulates by a variety of means….For example, commercial sales in a high-need subset of patients can be permitted on the basis of the results of Phase II trials, while further evidence is collected that eventually allows a broader label and wider use in a larger patient population.
It is important to note that Adaptive Licensing is NOT Accelerated Approval. In Adaptive Licensing, the data is collected and reviewed in a gradual, planned manner. It differs from a “sudden” approval based on outstanding Phase II results, or from impressive interim results in a large, Phase III trial.
The theoretical benefits are clear:
- Drugs are introduced into the marketplace faster, generating Revenues sooner and improving IRR
- Drug development costs are reduced
Importantly, an adaptive approach means that drug development is iterative, and adjustable based on incoming data. This ability to adjust based on results is far more consistent with good experimental design compared to the traditional “all or none” approaches we have today.
The key is to choose therapeutic areas and indications where “the same underlying pathophysiology must be present in patients across the spectrum of disease severity.”
In fact, oncology drug development is pseudo-adaptive already because new approvals are typically for later-stage disease until physicians gain experience and introduce these new drugs into earlier stages of disease.
EMA Leading The Way
The European Medicines Agency is already leading the way with Adaptive Licensing. In 2013, the EMA initiated a pilot program by accepting 34 applications from drug sponsors. Their experiences are documented in this report (PDF).
Based on the EMA experience and the discussion in Scannell, et al., it looks like Adaptive Licensing will be initially introduced in oncology drug development first, with anti-bacterials following closely behind.
With the EMA leading the way, sponsors could be faced with the problem of a de-harmonized development program between the EMA and the FDA. Could some companies decide to follow the EMA lead with Adaptive Licensing and simultaneously follow the more traditional two Phase III trials/all-or-none FDA scenario? Perhaps this can be done in sequence, i.e., pursue EU approval first, provided that data can roll into an FDA-approved Phase II or Phase III trial?
Based on our reading of this paper, we agree with the authors that projects following the Adaptive Licensing route will have minimal impact on IRR unless the EMA and FDA are harmonized for that development program.
The Fingolimod Case
The authors discuss the case of fingolimod as a potential example of an adaptive licensing approach. Fingolimod underwent five Phase II and III trials and extension studies which spanned seven years and 3,900 patients.
An Adaptive Licensing approach suggests an approval could have been possible with four Phase II and III trials spanning 5 years and 2,800 patients. So the initial approval would have been for moderate to severe multiple sclerosis, with a label broadening to any severity after another 30 months of data collection.
However, the authors also note several problems with this approach.
First, the indication of “moderate to severe multiples sclerosis” is vague. Second, fingolimod has some side effects which could possibly not be detected in a smaller set of trials. Lastly, would a sponsor risk not being able to demonstrate efficacy in a broader population with only efficacy in the moderate to severe population?
Clearly regulators need more examples and data before providing guidelines to sponsors.
BD Implications
We would be interested to hear from prospective licensees and licensors about Adaptive Licensing. IF Adaptive Licensing means products reach the market sooner at a lower cost, then that would make them very attractive, albeit with a smaller market potential at launch. Conversely, will prospective partners simply wait for the broader approval? Or have an option in place? And, what are the pricing implications of having a staged, adaptive approval approach?
Based on our read, we don’t think Adaptive Licensing will be something that will take off quickly. It’s a nice buzzword, and undoubtably a conference or two will emerge based on this topic. But as the EMA is demonstrating, this is an amazingly complex process that will take case studies and time (and money) to sort out. Importantly, harmonization with the FDA is a long-term requirement if Adaptive Licensing is to make sense for drug development on a global scale.