Andy Acker, co-manager of the Global Life Sciences Strategy, discusses how innovation in health care doesn’t always have to be high-tech.
We spend significant time talking about innovation in health care, with exciting advances such as gene therapy getting much of the attention. Sometimes, however, breakthroughs can be found among ‘the ordinary’ and, in a few cases, advanced with the help of investors. That was the case recently with a treatment of a severe lung infection known as nontuberculous mycobacteria (NTM).
NTM is a waterborne bacterial infection that can lead to chronic cough, fatigue, chest pain, and other symptoms. The bugs that cause the disease can be difficult to eradicate, and the current recommendations call for patients to take three different antibiotics for a year or more, although the regimen is often poorly tolerated and not very effective. Sometimes, another antibiotic, Amikacin, is added to a patient’s treatment; however, when exposed to the body intravenously, Amikacin can cause adverse effects, such as hearing loss and kidney malfunction.
A new drug under development called Amikacin liposome inhalation suspension (ALIS) has the potential to change this. With this new therapy, patients still take Amikacin but instead of using an IV*, ALIS administers the antibiotic through a nebuliser. This creates a mist that is breathed directly into the lungs, reducing the drug’s harmful exposure to the rest of the body. In addition, the antibiotic itself is packaged into a molecular bubble known as a liposome, allowing for easy transport and penetration into the lung tissue where the bacteria reside.
In short, ALIS is a new way of delivering an old drug more effectively, and results look promising. In phase 3 clinical trials, Insmed, the company developing ALIS, reported that treatment with ALIS combined with the standard of care cleared three times as many patients of NTM as the standard of care alone.
Also significant is that we helped Insmed improve the design of its phase 3 trial, a first for the Global Life Sciences Team. In 2014, the company was preparing its study, aiming to test 100 patients, the same number as in its successful phase 2 trial. However, our proprietary statistical models – which try to predict the probability of success for clinical trials – indicated that a larger trial would improve the odds of success. After we discussed this analysis with the company, Insmed decided to modify the trial to enroll more than 300 patients. In September 2017, the firm reported its encouraging top-line results from the phase 3 study, and Insmed’s stock price more than doubled overnight.
Finding the 10%
Despite all the advances in biotechnology, 90% of drugs that enter human clinical trials never make it to market. We strive to determine which drugs will end up among the 10% that succeed, and, as ALIS demonstrates, you have to cast a wide net and focus on what’s important: finding those companies with a high likelihood of addressing an unmet medical problem. More than 200,000 people worldwide have been diagnosed with NTM and the number is rising rapidly. The efficacy of ALIS leads us to believe Insmed will file for approval with the Food and Drug Administration in the first half of 2018, with filings in Japan and other countries likely to follow.
In the end, ALIS could potentially turn an old antibiotic into a blockbuster drug, all because of a new formulation and thoughtfully designed clinical trials. We call that a potential win for patients and investors alike.
IV = an intravenous delivery method that delivers substances directly into a vein
These are the manager’s views at the time of publication. The information in this article does not qualify as an investment recommendation. References made to a sector and its stocks do not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase them. Examples are intended for illustrative purposes only and are not indicative of the historical or future performance of a sector or its stocks, or the chances of success of any particular strategy.
The health care industries globally are subject to differing government regulation and reimbursement rates, as well as governmental approvals of products and services, which could have a significant effect on price and availability, and can be significantly affected by rapid obsolescence and patent expirations.
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