Transcript Slide 1 - University of Oklahoma

NEW ANTHRAX COUNTERMEASURE
The University of Oklahoma – Chemical Engineering
Vi Pham, Zachary Taylor and Miguel Bagajewicz
April 28, 2008
Outline of Presentation
 Anthrax Background
 Our Key Agent
 Technical Feasibility
 Scale-Up Design
 FDA Approval Process
 Marketing Strategy
 Pricing Models
 Profitability Calculations
ANTHRAX BACKGROUND
Need for Anthrax Countermeasures
Most serious bioterrorism threat today!!
Need for an Anthrax Countermeasure
Bioterrorism in the U.S., October 2001
 Envelopes containing anthrax spores
 22 anthrax cases
Need for an Anthrax Countermeasure
Impact of an Anthrax Bioterrorist Attack
 100 kg of aerosolized anthrax over Washington D.C.
 130,000 – 3,000,000 deaths
 $26.2 billion per 100,000 persons exposed
Current FDA-Approved Medical Countermeasures:
 Anthrax Vaccine Absorbed (AVA)
 Post-exposure antibiotics
Our Objective
Develop an inhalational anthrax
countermeasure that can overcome
the limitations of existing anthrax
countermeasures.
Anthrax Background
http://www.sciam.com/article.cfm?id=special-delivery
An infectious disease caused by the spore-forming
bacterium Bacillus anthracis.
Virulent factors:
 poly-γ-glutamate capsule
 anthrax toxins
Methods of Infection
Cutaneous
Gastrointestinal
Inhalational
Direct contact with the
bacteria or spores through
cuts
Consumption of raw or
undercooked contaminated
meat
Inspiration of 5000-8000
anthrax spores
Mortality rate: 20%
Mortality rate: 25-60%
Mortality rate: 75%
*Mortality rate is based on a lack of administration of antibiotics.
Images modified from: http://www.usatoday.com/graphics/news/gra/ganthraxqa/flash.htm
Infection Route of Inhalational Anthrax
Anthrax spores
Macrophage cell
Anthrax bacteria
Healthy macrophage cells
Anthrax spore
Lymph node
OUR KEY AGENT
Infection Route of Inhalational Anthrax
No Infection!
Anthrax bacteria eliminated and patient survives!
Key Agent – Previous Research
Macrophages
A. Without parts of our
Key Agent
Neutrophils
B. With parts of our
Key Agent
The key agent drastically improves the body’s ability to eliminate anthrax
Key Agent Efficacy
TECHNICAL FEASIBILITY
Possible Pre-Clinical Experiments
 Pilot-scale key agent production and modification
 Evaluate kinetics of key agent effects and anthrax
killing
 Perform in vitro toxicity study
 Test efficacy in vitro
 Computer simulation of in vivo effects
 Perform in vivo toxicity study
 Test efficacy / pharmacokinetics in vivo
Pre-Clinical Experiments
Experiment
Probability
Notes
Agent Modification
0.483
Study documenting loss of function with
modification
In Vitro Toxicity
0.999
Low residue concentration; modification to inhibit
immune response
In Vitro Efficacy
Modification
Dependent
Computer Simulation
Model Dependent
In Vivo Toxicity
0.93
Experiment
Range
In Vivo Efficacy
234 ± 212 h
(FDA); Half-life study
Bioavailability after
Modification
0.67 ± 0.41
Known bioavailability of similar agents after
modification
Modification study; one of five different
modifications
Simcyp accurate 93% of cases; assume accurate in
vitro data
(FDA); Genetic differences
Notes
Dosage per Treatment
 Concentration based on
pharmacokinetics and
bioavailability of drug (large
uncertainty)
 Concentration also based on
number of doses in 60 day
treatment period
 As half-life and number of doses
increase, needed concentration
decreases
 Effectiveness measured by fraction
of spores germinating and
surviving at day 60
http://english.people.com.cn/200608/05/images/antibiotics1.jpg
Pharmacokinetics
SCALE-UP DESIGN
Scale-up Assumptions

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







8000 working hours per year (~91%)
1 mmol solutions to find reactor volumes
Stainless steel, stirred reactors
Stainless steel, agitated tanks
Straight line depreciation
2% inflation
Maintenance 15% of equipment cost / year
Auxiliary equipment 10% of major equipment cost
1 skilled worker for each reactor and column
1 non-skilled worker for auxiliary equipment, tanks
(stock) and maintenance
Stage One Decisions
 3 doses per treatment regimen (always more
profitable than 1 and 2 dose regimens)
 Send only one agent to FDA trials (minimizes time
spent in pre-clinical experiments and cost of FDA)
 Apply for FDA fast-track (minimize time in FDA)
 Do not perform in vitro toxicity study (minimize
time spent in pre-clinical experiments)
Process Flow Diagram – Case 1
6 Batch Reactors, 2
Chromatography
Columns
Process Flow Diagram – Case 2a
5 Batch Reactors, 2
Chromatography
Columns
Process Flow Diagram – Case 2b
8 Batch Reactors, 2
Chromatography
Columns
(purification
sequence not
shown)
Process Flow Diagram – Case 3
12 Batch Reactors, 2
Chromatography
Columns
(purification sequence
not shown)
Process Flow Diagram – Case 4
12 Batch Reactors, 2
Chromatography
Columns
(purification sequence
not shown)
FDA APPROVAL PROCESS
FDA Approval Process:
Pharmaceutical Drugs
Research &
Development
Principal
Evaluation
1-3 years
Clinical Research
& Development
Phases 1,2,3
2-10 years
New Drug
Application
Review
2 months – 3
years
Post-Marketing
Surveillance
Biological Countermeasure Drugs
Animal Efficacy Rule:
 Demonstrate efficacy within an appropriate animal model
 Demonstrate safety within human subjects
Fast Track ($1 million):
 Priority Review (6 months)
Emergency Use Authorization (EUA):
 Large-scale production of drug before FDA approval for the
National Strategic Stockpiling
FDA Approval Process:
Biological Countermeasure Drugs
Preclinical
Development:
Discovery
-safety
-pharmacokinetics
-proof of concept
efficacy
Preclinical
Development:
Animal trials
-safety
-efficacy
Clinical Trials
-safety
-pharmacokinetics
Production
&
Stockpiling
Human
Efficacy
Trials
in the event of
product use
Experimental Protocols:
Estimation of Time, Labor, and Cost
Time
 Based on projections and previous
experiments.
Labor & Cost
 Cost of each experimental protocol:
Labor + Other Expenses
 Other Expenses = 0.5*Labor
 Salaries with benefits range from
$70,000 - $132,000
Experimental Protocols:
Pre-Clinical Research
 Triplicate Data
 Animal Model: Rhesus monkeys
 Efficacy/Toxicity Control: Ciprofloxacin
Experiment
Time, yr
Cost, $M
CapD Mutation
0.75
0.625
CapD PEGylation
0.5
0.417
Dendrimer Attachment
0.5
0.417
In Vitro Efficacy Study
0.75
.883
In Vivo Toxcity Study
1
1.44
In Vivo Efficacy/Kinetics Study
1
1.44
Total Preclinical Cost: $5.2 million
Total Preclinical Time: 4.5 years
Experimental Protocols:
FDA Approval Process
 Lobbying: $1.8 million
 Fast Track: Priority Review
 Phase 1: Pharmacokinetics (side effects, dose ranging, kinetics)
 Phase 2: Pharmacokinetics (gender differences, food interaction)
Experiment
Time, yr
Cost, $M
FDA Fast Track (Priority Review)
-1
1
Phase 1
1
1.26
Phase 2
1
2.78
NDA Review
Total Cost: $12.0 million
Total Time: 7 years
1.5
Other Anthrax Drug Investments
Borio et al., Anthrax Countermeasures: Current Status and Future Needs. Biosecurity and Bioterrorism: Biodefense Strategy, Practice, and
Science. Vol. 3 (2). 2005.
MARKETING STRATEGY
Marketing Strategy
Project BioShield
$5.6 billion for improved vaccines and drugs
against CBRN agents
Department of Health & Human Services
RFP seeking 10,000-200,000 treatments for
inhalational anthrax disease
Intended Market
Stockpile
Military
Major Incentives
Key agent is newer and more effective
Cheap to produce
Marketing Strategy: Project BioShield
Contract
Project BioShield Contract
 Must be “licensable”
 Must be able to mass produce
 Delivery within 8 years
Lobbying
 $1.8 Million
 Basis: AVA vs. VaxGen rivalry
Current Countermeasures: Vaccines
 BioThrax (Anthrax Vaccine Absorbed)
 Requires 6 doses over 18 months
 Annual booster shots required to
maintain immunity
 $24.50 per dose, $147 for 6 doses
 Shelf life : 3 years
 Projected duration of efficacy: 1-2 years
www.bioport.com
Current Countermeasures: Post-Exposure
Antibiotics
 Antibiotics (Ciprofloxacin, doxycycline and penicillin)
 Must use within 24 hrs after exposure to anthrax
 Duration of treatment: 2 times daily for 60 days
 Cost: $12 – $3600 for 60 days
 Antibiotic resistance
Antibiotic
Dose
Administration
Cost per dose, $ Cost for 60 days, $
*Doxycycline
100 mg
orally twice daily
$0.10
$12.00
Doxycycline
100 mg
intravenously twice daily
$4.50
$540.00
*Ciprofloxacin
500 mg
orally twice daily
$0.95
$114.00
Ciprofloxacin
400 mg
intravenously twice daily
$30.00
$3,600.00
Fowler R. et al. Cost-Effectiveness of Defending against Bioterrorism: A Comparison of Vaccination and Antibiotic Prophylaxis
against Anthrax. Ann Intern Med. 2005;142:601-610
*Prices are based on government cost
PRICING MODELS
Government Pricing
Value-Based Pricing
 Drug comparison to assess whether the improved
benefits are worth the additional cost.
 Cost-benefit analysis
Government Pricing:
Cost-Benefit Pricing Methods
Method 1
P * P2

H1 H 2
For both methods:
If
H1  H 2 , then P*  P2
Method 2
g (P* -P2 )= (H1 - H 2 )
H1 = our benefits
H2 = competitor’s benefits
P* = price to make us equal to our competitor in terms of benefits and cost
P2 = competitor’s drug price
g = constant
Government Pricing:
Cost-Benefit Analysis
Determining Benefits:
 Consumer Preference Function
H i   wi , j yi , j
j
w
i, j
j
1
H = benefits
j = property
w = weight of property
y = property score
Government Pricing:
Cost-Benefit Analysis
Properties the government values
 Effectiveness (% survival)
 wE = .80
 Safety (level of side effects)
 wS = .15
 Resistance (level of resistance)
 wR = .05
Government Pricing:
Cost-Benefit Analysis
Determining Effectiveness Property Score:
Government Pricing:
Cost-Benefit Pricing Methods Evaluation
Gamma~ 0.507
Government Pricing:
Cost-Benefit Pricing Methods Evaluation
P* = ?
Model 1: $133
Model 2: $130
Both models yield
relatively similar results!
Government Pricing:
Cost-Benefit Pricing Methods Evaluation
P* = ?
Model 1: $127
Model 2: $130
Both models yield
relatively similar results!
Government Pricing:
Cost-Benefit Pricing Methods Evaluation
Models valid (+/- $10) for:
0.75 < H2/H1 < 2.05
PROFITABILITY DISTRIBUTIONS
Evaluating Profitability
We use Net Present Value
CFk
CFn  VS  IW

 TCI
k
n




1

i
1

i
k 1
n 1
NPV  
Evaluating Profitability
Constant Parameters:
 Product price inflation rate: 2%
 Manufacturing cost inflation rate: 2%
 Tax Rate: 35% , MACRS
 Return on investment: 12%
 Straight-line depreciation
 n = 3 years
Profitability Analysis – 500 Trials
 Probabilities for
each step
programmed into
VBA
 Each trial assumed
to have the same
probability of
occurring (0.2%)
Profitability Summary
 ~70% chance of failure with ~$2,400,000 average
loss ($12M max and $0.63M min)
 Chance of success and average NPV dependent on
effectiveness of dose
Effectiveness
Probability
of Profit
Average NPV
Max NPV
Min NPV
80%
34.2%
$670M
$758M
$66M
85%
33.6%
$656M
$781M
$11M
90%
31.8%
$608M
$794M
$33M
95%
22.4%
$441M
$743M
$13M
Conclusions
 We designed a new countermeasure against
anthrax.
 The technical feasibility has been established and
the probability of successful development
analyzed.
 The FDA approval process was analyzed in detail.
 Two pricing models were developed and validated
based on other drug prices.
 The expected profitability of the process was
determined.
Questions?
APPENDIX
Drug Body Simulators - Overview
Liver
Heart
Kidney
Blood
Vessels
Drug Body Simulators - Kidney
• Renal clearance is largely dependent on molecular weight
• The molecular weight cutoff for filtration is approximately 70,000
• CapD has molecular weight of ~58,000, but can be increased with
PEG
Drug Body Simulators - Liver
 Incubate experimental drug
with various proteolytic
enzymes (transaminase,
deaminase, transpeptidase,
etc.) for various times to
determine kinetics of
degradation
 Determine residence time
of blood in liver based on
blood volume in liver (10%
to 15% of total blood)
http://content.revolutionhealth.com/contentimages/imagesimage_popup-r7_liver.jpg
Drug Body Simulators - Commercial
Virtual Physiological Human, Univ. College London
 Simulate the effects of a drug at the organ, tissue, cell




and molecular level.
Simulations across several supercomputers on the
UK’s National Grid Service and the US TeraGrid
Duration of simulation: 2 weeks
Equivalent computational power: long-range weather
forecast
Cost: Extremely expensive
Drug Body Simulators - Commercial
 Drug adsorption, distribution, metabolism and
elimination (ADME) modeling
 Used by 9 of 10 top pharmaceutical companies
 Automated in vitro extrapolation to predict in vivo
outcomes
 Uses continuously updated database to predict
responses by real-world population
Risk Analysis: Pre-Clinical Research
Risk Analysis: Pre-Clinical Research
Risk Analysis: FDA Approval Process
Government Pricing:
Cost-Benefit Analysis
Determining Safety Property Score:
Government Pricing:
Cost-Benefit Analysis
Determining Property Score:
Evaluating Profitability:
Example
PROFITABILITY SUMMARY
Cost Per Treatment, $
11.22
Product Price Inflation Rate
0.02
Price Per Treatment, $
155.51
Total Product Cost Inflation Rate
0.02
Millions of Treatments Per Year
8.33
Income Tax
Annual Total Product Cost, $M/year
93.49
Annual Product Value, $M/year
1295.92
Total Capital Investment, $M/yr
7.36
End of Year
0
Fixed Capital Investment, $M
-6.26
Working Capital Investment, $M
-1.10
0.35
ROI
0.12
n
3
1
2
0.94
-7.36
Start-Up Costs, $M
Total
-6.26
1.10
Salvage Value, $M
Total Capital Investment, $M
3
0.00
0.94
-7.36
-0.63
-0.63
Annual Product Sales, $M
1295.92
1321.84
1348.27
1375.24
5341.26
Annual Total Product Cost
-93.49
-95.36
-97.27
-99.21
-385.33
Annual Depreciation, $M
-1.77
-1.77
-1.77
-5.32
Annual Gross Profit, $M
1224.08
1249.23
1274.25
3747.56
33%
44%
15%
0.9259
(w/o depreciation), $M
MACRS depreciation rate
tax allowable depreciation $M
0.41
0.55
0.18
1.15
taxable income
1223.66
1248.68
1274.07
3746.41
Income taxes
428.28
437.04
445.92
1311.24
Annual Net Profit, $M
797.57
813.97
830.10
2441.64
Annual Cash Flow, $M
795.79
812.19
828.33
2436.31
321.41
292.89
266.70
873.91
Present Worth of Annual Cash Flow, $M
-7.08
Net Present Worth, $M
867.21
Return on Investment, average %/yr
3305.87