A New Model of Drug Discovery
The current model of drug discovery is broken. It costs, on average, $2.6 billion to bring a new drug to market, a figure that has more than doubled since 2003. Moreover, the process can take over a decade, with only 12% of drugs that enter clinical trials ultimately receiving FDA approval. These staggering costs and lengthy timelines have resulted in many diseases being neglected, particularly those affecting smaller populations, as pharmaceutical companies often find it too risky to invest in these areas.
This issue is particularly devastating for people with rare diseases, which affect approximately 300 million people worldwide. Despite this large number, only 5% of rare diseases have an approved treatment . In response to the lack of industry investment, over 7,000 rare disease foundations have emerged. These organizations, often driven by those directly impacted, have collectively raised billions of dollars to fund research. However, these foundations frequently fall into the same inefficient patterns as traditional biotech companies, spending enormous sums with minimal results. But why is there so much inefficiency in the system?
Limitations of the University System
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Universities are a major source of potential therapeutic breakthroughs, with the majority of new drugs having some origin in academic research. However, the incentive structures within academia are misaligned with the urgent needs of patients. Academic researchers are often more motivated to publish papers than to expedite the development of new drugs, leading to a never-ending cycle of research and publication. This emphasis on publication over application delays the translation of discoveries into treatments.
While this model might have made sense in the past, our understanding of diseases has significantly advanced. Today, we know that over 80% of rare diseases are genetic. This new knowledge demands a shift in how we approach drug discovery, yet companies and foundations continue to rely on outdated methods. This has caused them to dramatically under value many drugs, especially those that are considered rare.
The Traditional Model
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Leverage Universities for Research and Drug Development Breakthroughs
Universities have been an amazing source of powerful research that has spurred on many discoveries in both the private an pubic sector. At Everlume we stand on the shoulders of these giants as we build on top of all the research and breakthroughs of the last 50 years. However, there as been an over reliance on research, and biotechs have slowly been outsourcing more and more of this to the university system. In some cases this is through a grant to pay for research, or often directly licensing an asset form a university.
Over time this has caused the cost of drug discovery to sky rocket as universities were never intended to be in this direct of a role.
Preclinical and Research & Development (R&D) Costs
Preclinical studies: Preclinical testing costs typically range from $200 million to $500 million. This includes laboratory testing, animal studies, and the development of the drug’s chemistry and formulation.
Discovery and early-stage R&D: The discovery phase, which includes the initial identification of a drug candidate, can take several years and add $200 million or more to the total cost.
Total Preclinical and R&D Costs: ~$500 million to $1 billion
Clinical Trial Costs
Once a drug has passed preclinical testing, it enters the clinical trial phase. This is the most resource-intensive part of the drug development process, as it involves testing the drug in humans across multiple phases.
Phase 1 Clinical Trials: This phase primarily tests the drug’s safety and typically involves 20 to 100 participants. The costs for Phase 1 trials range from $1 million to $30 million, depending on the complexity of the drug and the trial design.
Phase 2 Clinical Trials: This phase expands the testing group to several hundred participants and focuses on assessing the drug's efficacy, as well as gathering more data on safety and dosing. Phase 2 clinical trial costs usually range from $8 million to $20 million.
Phase 3 Clinical Trials: The most expensive and extensive phase, Phase 3 trials can involve thousands of participants to confirm the drug’s effectiveness, monitor side effects, and compare it to existing treatments. The cost of Phase 3 trials typically ranges from $100 million to $500 million or more, as these trials often span multiple sites and require large-scale patient recruitment and data collection.
Total Clinical Trial Costs (Phase 1–3): ~$300 million to $1.5 billion
A Shrinking Pie
Not only is the traditional model expensive it also results in lower profit. As drug companies license technology from various development partners, universities, and CROs they create royalty agreements that cuts into their realized profit. This further exacerbates the rare disease problem, and makes it more difficult for drug companies to find the ROI to engage in these programs.
The Non-Profit Sector Tries to Help
In an inefficient market many times you will see a myriad of non profits and foundations continually proliferating, and trying to step in where the market does not work. That is certainly the case in the rare disease community. Many parents have been forced to become drug hunters as they start foundations to try and raise money to find a cure. Some of these foundations have grown to become behemoths in their own right.
The problem, however, is that these foundations have plugged themselves into the same inefficient model. While many of them have funded some amazing research the needle has not substantially moved when it comes to bringing drugs to market for rare diseases.
A New Approach: Precision and Speed
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In software development, the traditional approach to drug discovery is akin to spending years trying to understand every detail of a program before attempting to fix a bug. However, with the advent of genetic research and new technologies, we can now rapidly test and iterate, targeting the gene directly to address the root cause of diseases. This method is faster, cheaper, and can yield therapeutic approaches in weeks rather than years.
What the industry hasn’t fully appreciated yet is that the cost and speed to do experiments has drastically dropped and an iterative approach is now considerably more efficient….you can quickly run hundreds of experiments on many potential genetic based cures and the cost is minimal compared to the years and billions spent on research before even trying
While others are exploring genetic-based cures, we seem to be among the few who fully grasp the implications of these advancements. We are pioneering a much more efficient model of drug discovery, and our approach is orders of magnitude faster and less expensive.
What Does the New Model Look Like?
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The rapidly decreasing cost of drug discovery has opened the door to a direct-to-patient model, where patients can contract companies like Everlume to create a therapeutic solution for their specific disease. Recent advancements have reduced the cost of gene sequencing from $100 million in 2001 to just $600 today, making personalized medicine more accessible than ever before.
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Everlume has already launched phase one of the new model with promising results. Utilizing AI and our proprietary cell line platform our goal is to create a therapeutic and start an N=1 FDA trial within a year. Our approach allows us to provide life-saving treatments directly to patients in a fraction of the time it traditionally takes.
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Once we prove successful with individual patients, the next challenge is to scale these treatments for broader populations. Phase two involves moving from an N=1 trial to full FDA trials and commercializing the drugs to reach everyone with the disease. Everlume plans to do this by spinning out new companies for each therapeutic or a cohort of therapeutics.
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Everlume’s plan is to spin out successful preclinical programs into separate companies, in which we retain a majority stake. Families or foundations that funded the preclinical research will hold a minority stake, allowing them to share in the profits if the intellectual property is monetized.
The Everlume Approach
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Our approach has created two significant advantages. First, we are developing a large and continually expanding pipeline of preclinical drugs. This model is not only profitable but also mutually beneficial, as we are committed to saving lives affected by rare diseases.
Second, our cost structure allows us to pursue drug candidates that other companies would deem unviable. For example, we developed a gene therapy for a rare mutation in the SPG11 gene, which causes Hereditary Spastic Paraplegia Type 11 (HSP). Despite the small number of people initially identified with this mutation, our approach uncovered a much larger population affected by similar SPG gene mutations. Moreover, recent FDA approvals of drug platforms could enable us to create a gene therapy platform for SPG-related diseases, potentially serving thousands of patients. In addition Lysosomal Storage Disorders (LSDs), which affect 1 in 7,000 people, represent another significant opportunity.
Additionally, rare disease therapeutics are 200% - 300% more likely to gain FDA approval compared to non-rare disease treatments. There are also various government incentives that these companies can take advantage of.
This allows us not only to work with patients who can afford to create a novel therapeutic, but also to take that drug and commercialize it for all to be able to reap the benefits of.
Our Advantage
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To contrast Everlume’s cost with that of the traditional approach the results are striking
Direct to Patient Services
Target Identification: $10k - $50k
Pre-Cinical Therapeutic: $50k - $150k
Tox Studies: $50k - $100k
N=1 Trial and GMP Manufacturing: $1M - $3M (this cost can be reduced depending upon the number of customers in the N=1 trial)
Everlume Commercialization
Phase 1/2: $15M - $50M (on average)
Phase 3: $45M (if needed)
The Everlume Cost
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Conclusion
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The traditional drug discovery model is outdated, inefficient, and unable to meet the needs of those suffering from rare diseases. By embracing a new model that leverages genetic insights, rapid iteration, and a direct-to-patient approach, Everlume is positioned to revolutionize the industry. Not only are we saving lives, but we are creating a sustainable and profitable business that has the potential to disrupt the entire approach to curing rare diseases.
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