Two-For-One Deal

CASE STUDY #1

What better customer could a pharmaceutical chemical company have than a drug development firm with the goal of moving one new product into the clinic each year? That's what DSM found in late 2004 when it signed an outsourcing contract with Rigel Pharmaceuticals.

Established in 1996, South San Francisco-based Rigel has had this new product goal since 2002, and so far the company has achieved it. Its drug development partners, moreover, are a who's who of the pharmaceutical industry: Pfizer, Merck, Johnson & Johnson, Novartis, Daiichi Pharmaceuticals, and Serono.

Rigel identified its most recent candidate for clinical development, a small-molecule oncology drug, in November 2004. Code-named R763, the compound is an Aurora kinase inhibitor that the company says has been shown to inhibit proliferation and trigger death in several tumor cell lines, including cervix, colon, lung, pancreas, and prostate.

Aurora kinases belong to a family of enzymes that plays a key role in cell division: They are thought to orchestrate the fourth state of the cell cycle, in which cell division, or mitosis, takes place. Rigel says the activity of the kinase known as Aurora A is elevated in a number of tumor cells and this overexpression has been shown to turn cells cancerous.

The theory behind R763 is that inhibition of Aurora A activity in multiplying cells delays their entry into mitosis, thereby stopping proliferation and even pushing the cells into programmed death, or apoptosis. And because Aurora kinase activity is greater in proliferating cells than in resting ones, R763 and other kinase inhibitors have some natural selectivity to cancer cells, making them potentially more patient-friendly than conventional harsh chemotherapies.

Before a drug like R763 can go into clinical development, sufficient quantities must be produced to the Food & Drug Administration's current Good Manufacturing Practices (cGMP) standards. And though Rigel employs some 30 medicinal chemists who conduct drug lead optimization and selection, the company must look outside for cGMP production, says Thomas Sun, the company's executive director of pharmaceutics and manufacturing.

Dick Woodward, a veteran of several biotech start-ups and a director of new business development for DSM's emerging pharma team, knocked on Rigel's door at about the time that Sun and his colleagues were confronting the need for cGMP supplies. Sun says he became interested when Woodward described DSM's biocatalysis expertise, because the synthesis developed by Rigel's medicinal chemists requires an enzyme as a chiral catalyst.

Because Rigel needed kilogram quantities of R763 in short order, the compound was a candidate for development at DSM's ResCom unit, which is based at a former Bristol-Myers Squibb facility in Regensburg, Germany. DSM formed ResCom—for Responsive and Committed-in 2002 to provide a service that it was not then well—equipped to offer: rapid production of drug compounds for preclinical studies or Phase I clinical trials.

According to Will van den Tweel, ResCom's business manager and a 19-year DSM veteran, ResCom operates at arm's length from the larger DSM organization, even maintaining its own profit-and-loss responsibility. He says this distance ensures that ResCom can provide the speed and communication that drug companies, particularly small ones, are looking for in early-stage development. "We have to maximize our flexibility and speed in order to meet the rapid timelines for early-phase clinical development," van den Tweel explains.

At the same time, he says, ResCom has access to the parent company's significant pool of technical resources. And ResCom customers who are ready to scale up can benefit from the internal transfer of a manufacturing process to DSM's larger scale plant in Linz, Austria, which is about a two-hour drive from Regensburg.

ResCom has grown from a staff of 16 former Bristol-Myers chemists and production people at its launch to about 40 people today. Six or seven customers are typically being served at any given time, van den Tweel notes, split evenly between large drug companies and small or emerging ones.

On the strength of its enzyme expertise, DSM became one of three potential outsourcing partners that Rigel asked to bid on the R763 business. After getting the bids back and then visiting two of the three firms, Rigel picked DSM. "We thought they were the best fit with respect to their capability to do the chemistry and meet our timeline," Sun says.

He acknowledges that ResCom's scientific staff was a selling point for him. Before earning a Ph.D. in chemistry in 1994 from the University of California, Santa Cruz, Sun studied for a few years in Germany, where he developed a high regard for German-trained chemists. Rigel's experience with ResCom, Sun says, has confirmed this hunch. "ResCom does not call up to point out a problem and ask what to do about it," he says. "The people at ResCom think ahead. When they talk to me, they have solutions ready."

Though ResCom chemists often streamline multiple-step medicinal chemistry syntheses, they concluded that R763 could be efficiently manufactured with the route developed at Rigel, albeit with significant process development work. In addition, they changed the enzyme used in the biocatalytic step and worked with Sun's staff to select the appropriate salt to manufacture.

During 2005, DSM produced a 2-kg process development batch of R763 and a 3-kg cGMP batch. Because R763 is a potent compound, the 5 kg will be enough to get through preclinical and early clinical studies, Sun says. DSM has the capacity to manufacture larger quantities for clinical trials and commercial sale at its Linz plant. But as it turns out, the job of securing those larger quantities will fall to someone other than Sun.

In October 2005, Rigel licensed the right to develop R763 and other Aurora kinase inhibitors to the Swiss biotechnology firm Serono. Rigel received a $25 million initial payment and could get up to $160 million in milestones for R763. In January, Serono paid Rigel a $5 million milestone payment triggered by progress on an Investigational New Drug Application Rigel had filed with FDA in December. Serono has said it expects to take R763 into clinical trials later this year.

Now that R763 is in Serono's hands, Rigel has turned to DSM for a considerably more difficult pharmaceutical chemical production task: the synthesis of R788, an oral treatment for rheumatoid arthritis that has been through Phase I safety trials on its own and in combination with methotrexate, a common arthritis treatment. Rigel expects to launch Phase II efficacy studies later this year.

Rigel considers R788 to be its lead product candidate and, unlike R763, plans to retain ownership. The company hopes the compound will eventually compete in a market for innovative arthritis drugs expected to be worth $10 billion by 2008.

Though R763 production is relatively straightforward, the synthesis of R788 is decidedly more complex, requiring one particularly tricky chemistry step. "We went through at least half a dozen possibilities for the step, and only one works well enough to give decent conversion and selectivity," Sun says.

Rigel had a cGMP supplier of R788 for the early safety trials but urgently needed a larger quantity of the material for Phase II proof-of-concept studies. On the basis of his experience with R763, Sun approached ResCom, which was able to draw on DSM's chemical manufacturing expertise to meet Rigel's needs.

Late last month, the chemists in Regensburg successfully completed the tricky step and were on their way to cGMP production of the final R788 molecule. Sun is happy, but not surprised. With DSM's ResCom unit, he says, "you get the smaller size for quick response and the large company behind it." Michael McCoy