Fractal Therapeutics is a model-based drug discovery and development company, focused on building a pipeline of novel assets in Oncology, Infectious Disease, and Rare Diseases.
Our team consists of seasoned pharma R&D executives who have developed and honed a unique approach to drug hunting. This approach- honed over the years in live project settings in big pharma- integrates informatics, mathematical modeling, and simulation platforms tightly with in vivo and clinical pharmacology.
Fractal’s unique interlocking platforms are focused on providing robust model-based solutions to critical-path questions on the road to new asset creation and development. We are applying our platforms to efficiently build a diverse pipeline of novel investigational agents, spanning a range of modalities. These assets are intended to be partnered, either through sponsored research agreements or commercial deals, at the late preclinical or early clinical stages.
We engage with partners in the co-development of novel preclinical or clinical assets discovered or in-licensed by us. Sponsored research agreements are our primary business model, focused around a pipeline of candidate assets, and an efficient preclinical development path aimed at yielding one or more Investigational New Drug applications (INDs) in a short period of time.
Our approach begins with high-throughput asset sourcing and creation, coupled with focused critical-path experiments and modeling analyses. This allows us to focus on the projected therapeutic index of candidate drugs, which defines their potential. At every step along the way, our platforms allow us to precisely and quickly answer critical-path questions on the road to approval.
Our lean, fit-for-purpose approach to integrating modeling and informatics with pharmacology enables us to create value for our partners in an extremely resource-efficient manner.
Follow the data
We believe that it is more important to get it right, than to be right. Our approach is agnostic to theory and committed to experimental (especially clinical) data.
When the facts change, we change our minds.
We emphasize the use of mathematical modeling in every step of the drug discovery and development process.
Focused models aimed at answering specific scientific questions provide a faster (and more rigorous) path through drug discovery and development.
We believe that the best way to succeed in business is to question our competitor’s wisdom, not endorse it.
Popularly held beliefs in science can often be wrong.
Questioning conventional wisdom stimulates innovation, while at the same time providing opportunities for differentiation.
Agnostic and results-driven
Doing more with less is essential to quickly build sustainable, profitable businesses.
We take a lean approach, prioritizing the essentials and avoiding costly inefficiencies. We get the most out of every dollar by focusing on the critical path for execution, building lightweight but effective processes, and creating a disciplined, results-oriented culture within our teams.
At Fractal, we believe in the value of software both as a scientific and as a business tool.
On the scientific side, modeling and simulation serve as a valuable prototyping tool while informatics and statistics serve as critical instruments to more deeply understand results. On the business side, we rely on software-driven processes to keep simple things simple and make difficult things possible. A software-driven operations game is just tighter.
Applying consistent decision criteria in advancing drug molecules is easier said than done.
Limited pipeline sizes and timeline pressures can lead to tunnel vision, and project teams (and companies) are often cornered into trying to force the ‘right’ answers in the pursuit of superficial performance metrics. Pursuing a large and diversified portfolio lets us stay agnostic to the outcome for any given project.
Thinking like engineers
Best practices can be a powerful tool in the right context, but too often they are used to reinforce outdated legacy approaches.
Sometimes, the best way to design an efficient process is to do what makes sense and avoid the ‘best practices’ trap.
We design our processes around the tools and techniques available in the 21st century, and ignore the way ‘things have always been done’.
For every question, we focus on the simplest effective answer.
Our belief is that it’s not difficult to find a complicated answer to a simple question. Doing the opposite- finding a simple answer to a complex question- represents insight.
We believe that good ideas are cheap, so killing them should be cheap too.
We use modeling and simulation as a design and strategy tool to pressure test ideas.
Approaching drug discovery and development from a mindset of abundance lets us take a clinically detached approach to our projects.
Focus on the stuff that matters
Sadly, even in the modern era, the potential of many cancer (and infectious disease) drugs is limited by toxicity. Companies have historically wasted substantial capital investing in molecules that lack a therapeutic window (doses that are both therapeutic and acceptably non-toxic).
We are able to efficiently assess the therapeutic window, and rely on it substantially in our go/no-go decisions.
Every program has a core of irreducible scientific risk.
By pursuing a critical-path approach, we are able to focus our investments on those questions that address this risk, thus enabling rapid go or no-go decisions and efficient use of capital.
We believe that the best defense against being wrong is to be wrong cheaply. Because no amount of preclinical biology can predict clinical success, we focus on reducing the expense and time needed to arrive at the pivotal clinical experiments.
Given this mindset, it follows logically that a broad pipeline and rigorous decision criteria are the best insurance against scientific risk.
By Katie Gayvert
Often times we hear that the majority of successful drugs originated from the NIH or in academic labs. In 2016 alone, universities took in $2.96 billion from patent licensing, with about $2 billion of that coming from royalties. Individual universities have taken home major windfalls for selling off royalty rights to drugs, such as Emory’s Emtriva ($525 million) and UCLA’s Xtandi ($1.14 billion).
We decided to take a systematic look at the origins of successful drugs ourselves to see what the data says. According to the FDA’s Orange Book, only about 5% of approved drugs can trace the origins back to public sector research institutions (PSRIs). However upon closer look, a number of notable cases seem to be missing. This includes older oncology discoveries, such as vorinostat (Sloan Kettering and Columbia), valrubicin (Dana Farber) and pemetrexed (Princeton). Also missing are most drugs discovered at academic institutions outside of the US, such as the antivirals discovered at the Czech Academy of Sciences. The Orange Book is further limited to only small molecules due to the nature of its purpose (therapeutic equivalents for generics). Its equivalent for biologics, the Purple Book, lacks information about patents due to the more complicated legal landscape around biosimilars. As a result, these numbers do not include other significant university contributions like the Weizmann Institute’s therapeutic monoclonal antibody discoveries.
To better understand the sources of innovation in drug discovery, we looked to a 2010 paper in Nature Reviews Drug Discovery, which reviewed all new drugs approved between 1998 and 2007. This tells a somewhat different story. When looking at the 252 drugs approved during this period of time, 25% had some level of university involvement in the discovery. About 40 of these were solo university discoveries (15%), while another 20 were co-discovered with either biotech or pharma companies. This suggests that while universities are not by any means the main contributors to innovation, they do in fact play a significant role. This is particularly pronounced in fields like oncology, where academic labs can claim full credit for 32% of small molecules and 40% of biologics.
So how did these get missed? The M&A nature of the pharma industry may have caused some of these contributions to slip through the cracks. A good example of this is with vorinostat (SAHA), the first FDA approved histone deacetylase inhibitor which was approved for cutaneous T cell lymphoma in 2006. SAHA was discovered and initially developed in the labs of Sloan Kettering and Columbia back in the 1970s. In 2001, two of those discoverers founded Aton Pharma and licensed SAHA from Sloan Kettering for the purposes of its development and commercialization. In 2004, while SAHA was still in Phase II trials, Aton was acquired by Merck. Yet while Sloan Kettering is the undisputed discoverer of SAHA, all nine patents listed in the Orange Book are held exclusively by Merck.
Pharma's outsourcing of innovation is even more pronounced when looking at biologics. While biotech appeared to be a driver in biologics, the larger pharma companies were slower to catch on to this new type of therapeutics. The only internal R&D "success" in oncology over this period of time was Mylotarg, which had to be pulled from the market for both safety and efficacy reasons in 2010 and was only recently re-approved with a different dose, schedule and target population after intervention from the FDA. The remainder of pharma’s current oncology biologics come from either universities or through later acquisition of biotech companies, such as Roche and Genentech.
These numbers tell us that while the bulk of new discoveries do still originate in the industry (85%), academia does in fact play an important role in drug discovery. These contributions are more pronounced when looking at fields like oncology and assets like biologics. This may be because orphan diseases are less likely to attract the attention of industry due to its lower theoretical market potential. In these cases, universities appear to be playing an important role of de-risking assets by generating preclinical data and identifying assets that are most likely to succeed, which are then picked up by industry and can be fast-tracked for development.
By Katie Gayvert
Our previous post described how university discovered drugs have been an important source of innovation. A natural follow-up to that question is to ask what types of universities are making these contributions. A reasonable guess would be that prestigious institutions are the major players. But what makes an institution prestigious? Looking at “glamour” factors like name recognition brings to mind institutions like MIT, Harvard, and Sloan-Kettering. But we also know from experience that there are many less glamorous but highly innovative universities that have been just as impactful.
A more valuable way to define prestige is to base it on the level of innovation. Formal rankings of innovative universities have been put together by groups like Nature and Reuters, considering factors like patent productivity, industry collaborations in peer-reviewed journals, and citations. As expected, we see big names like MIT (Reuters: 2, Nature: 3) and Harvard (Reuters: 3, Nature: 33) towards the top of those lists. However, we also see names like the University of Texas (Reuters: 6, Nature: 5) and the University of Wisconsin (Reuters: 25, Nature: 36). Unsurprisingly, these innovative universities tend to take on the vast majority of NIH funding. This suggests that it is presumed that these universities are more likely to make significant contributions to the healthcare field, which includes drug discovery.
We looked to see if these “prestigious” institutions do in fact dominate drug discovery. To do so, we considered the top 100 most innovative institutions according to the Reuters and Nature rankings. Since the level of NIH funding corresponded closely with innovation rankings, we also considered the top 100 institutions with the highest amount of NIH funding. This allowed us to include important non-university public sector research institutions (PSRIs) like Sloan Kettering and Dana Farber. We compared these lists to the universities that were attributed with discoveries of FDA approved drugs in the Nature Reviews Drug Discovery paper that was discussed in the previous blog post.
When looking at drugs that were “co-discovered” with industry, some of the same big names popped up repeatedly. Institutions like Harvard and the NIH have had several collaborations lead to FDA approved drugs. This track record of success highlights the value of academic-industry collaborations.
However, it turns out that drug discovery in academia is not dominated by a few major players, but instead is spread out across many innovative institutions. This trend is particularly pronounced in oncology, where only Sloan-Kettering and the Czech Academy of Sciences are reported to have more than one drug originating out of their labs without any ties to industry. Notably missing are “glamorous” names like MGH and the NIH. On the other hand, less flashy names like Indiana University, Tulane University, and Boston University each lay full claim to an FDA approved oncology therapy. This is even more notable in the field of infectious diseases, where you can find game-changing, university-discovered drugs like Emory’s emtricitabine, which is included by the WHO on its List of Essential Medicines.
So to return to the original question: does academic prestige matter? It turns out, it all comes down to how you define prestige. While there have been a handful of high-profile discoveries by glamorous names (generally in collaboration with industry), the majority of academic-driven discoveries are taking place at less flashy but still highly innovative institutions.
By Katie Gayvert
The first two posts in this series discussed cases where university-discovered assets were licensed and developed by biotech or pharma. But what about labs that create spin-off startups to develop drugs themselves?
When looking through the 40 or so approved university-discovered drugs discussed in the previous posts, we were only been able to track down a handful of successful examples. There was Sloan Kettering and vorinostat, which took about four decades to go from discovery to approval. Other successes include basiliximab (Mt. Sinai), enfuvirtide (Duke), and verteporfin (University of British Columbia).
To look a little more deeply into this, we looked at a famous lab at a highly prestigious university (anonymized here). This lab has created over 30 companies over the past three decades, including 15 drug development focused companies. 5 of the drug companies have been sold off through either M&A or bankruptcy, while the other 10 are still active.
Out of the 5 companies that are no longer active, 4 have had all investment and acquisition deal terms disclosed. Two were moderately successful and the other two were at a loss. These successes generated only mediocre internal rate of returns (IRRs) (20 – 30%) - or when pooled together with the failures yields a modest IRR of 9.227%. In comparison, venture capitalists and private equity firms look to generate an IRR around 20-30% for their portfolios.
Meanwhile, the active companies have over the past fifteen years raised about $1.5 billion in VC funding and another $750 million through IPOs. Through this, they have produced one FDA approved novel drug and two approved generics, along with another 20 or so drugs still in clinical trials. The approval occurred 9 years after the founding of the company. In comparison, current industry estimates for each approved drug are currently $1.385 billion in out of pocket expenses (plus more in opportunity costs) and a development time of about 12 years. So these active drug companies are performing at roughly the industry averages in terms of cost and efficiency.
Altogether these results are moderately successful, but not exceptional. This is not to say that these types of approaches are not valuable. Both sold off and active companies look better when viewed as a portfolio, instead of as individual companies or assets.