Ziopharm seeks lower cancer drug prices

* Says palifosfamide could be $1 billion a year seller

* Sees synthetic biology creating less expensive drugs

* Plans 5 synthetic biology INDs in 2012, 8 in 2103

By Bill Berkrot

NEW YORK (Reuters) – Ziopharm Oncology Inc’s Chief Executive Jonathan Lewis has an idea that could shake up the biotechnology business — produce less expensive new cancer drugs.

Recent advances in cancer treatment typically come with eye-popping price tags for therapies that may offer only a few months of extra life. For example, Bristol-Myers Squibb Co’s Yervoy for advanced melanoma runs $120,000 for a four-infusion course of treatment. Dendreon Corp’s Provenge for advanced prostate cancer costs about $93,000.

But government agencies that determine healthcare coverage are starting to push back.

“Part of our philosophy from the very get-go has been low cost,” Lewis told Reuters in an interview. “Keep the cost of goods down, cost of development down, cost of the drugs down.”

Lewis said his company’s most advanced drug in development, palifosfamide for sarcoma and lung cancer, can be a $1 billion a year seller even if reasonably priced.

But the linchpin to Ziopharm producing less expensive biotech drugs is an experimental new technology known as synthetic biology developed by its partner Intrexon Corp.

Lewis sees synthetic biology transforming biotech drug manufacture the way Henry Ford’s assembly line changed automobile production.

“This has the potential to revolutionize how we make drugs, to get cost down, down, down,” Lewis said on Wednesday.

“The world is changing; the U.S. is changing. Very expensive drugs are going to struggle,” he said.

With the Intrexon technology, DNA is assembled from stored parts using robotics and programmed to stimulate production of specific cancer killing proteins inside a tumor. The protein is activated or turned off by a pill to control toxicity.

The current expensive and complicated biotech production model involves protein based medicines manufactured in huge vats in carefully controlled environments.

“We don’t use those great vats to create the protein, but use the person to create the protein,” Lewis explained, adding that lower sales price does not necessarily mean lower profit.

“People will still make money because it costs less to do it,” Lewis said.

The process has been tested in a 9-patient early stage advanced melanoma study to be presented at the American Society of Clinical Oncology meeting that starts on Friday.

It will take far larger trials to determine if synthetic biology represents the revolution Lewis envisions.

Ziopharm expects to file five investigational new drug applications (INDs) seeking approval to begin human trials using synthetic biology next year and eight more in 2013.

“We think we can do this relatively quickly, within the next few years,” Lewis said.


In the meantime, the high price of cancer drugs is being challenged. Britain’s National Institute for Health and Clinical Excellence (NICE) rejected several drugs approved in the United States because it found the cost did not justify the benefit. Lewis says a similar situation could evolve in the United States if costs were not brought under control.

Even with one drug in expensive late-stage testing, another about to enter Phase III trials and several earlier stage projects, Lewis said the company’s $136 million in cash can take it to the beginning of 2013.

South African-born Lewis, an oncologist and researcher by trade, wears his philosophy on his somewhat disheveled sleeve. Showing few traditional CEO trappings — no custom made suit, power tie or perfectly coiffed hair — Lewis has the appearance of someone more comfortable in a laboratory than a board room.

But he has gained the confidence of drug industry veteran Randal “RJ” Kirk, Intrexon’s principal owner, who has a history of building companies over time and selling them at a healthy profit, most recently Clinical Data Inc.

Kirk holds just over 12 percent of Ziopharm, second only to Fidelity Management & Research Co, according to securities filings.

“The synthetic biology story is game-changing,” Lewis said.

“As this dream becomes a reality, cost is going to come down.”