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With central research and development funding at an all-time low in the United States [1], early biotech investors tend to target low investment projects with the expectation of a 30× return from their few successful ventures. Given that simple formula, a 106-step peptide synthesis is certainly less appealing than the 8–10 step process typical of most small molecule drugs [2]. Such is the dilemma for one of today’s most compelling peptide drugs: T-20 (enfuvirtide).
Series A investors shy away from these complex projects, citing unrealistically high drug costs. Such conservative attitudes are prevalent. But is this really a sound strategy for both clinical efficacy and profit? The facts simply do not support the case.
To follow is an overview of real-world therapeutic peptide development. As you will see, the relative cost of the peptide production itself is a mere fraction of the total investment.
Discovery
Let us suppose we have a receptor for which the ligand-binding site is known and an optimized peptide agonist exists. The agonist itself is under preclinical development for a series of metabolic diseases. Because the receptor is selectively expressed in some tumor cells, it was hypothesized that cancer cell proliferation may be prevented by a suitable peptide antagonist. Based on established agonist ➝ antagonist switch rules [3], a peptide chemist offers 10 potential new antagonist sequences. Each peptide design includes a few non-natural residues for improving metabolic stability and inducing unique receptor response.
This is not simply a theoretical example. It describes my lab’s work with the leptin protein and its receptor response modifiers [4]. The balance of the example described here is therefore based on our own direct experience.
Cellular Studies
We will attempt to screen the potential of our peptide antagonists against 6 cancer cell lines: brain, breast, prostate, colon, lung, and leukemia. Toward this end, let’s order 10 peptides from a commercial facility. While receptor antagonists usually consist of fewer than 10 residues, for the sake of this discussion, we will purchase 20-mers (to be consistent with the length of peptide drugs in general; our leptin receptor antagonist is shorter). Five milligram lots of 95% purity, enough for initial screening, can be purchased for $300 each. Thus, our 10 peptides expense totals $3,000.
The required 14 cell lines (2 for each tumor type and 2 normal controls) are billed at $350 each, totaling $4,900. Notably, even at the discounted academic rate, our cell costs exceed those of peptide production and we haven’t even addressed all the required reagents.
Indeed, in our grant spending estimates, we regularly budget more for cell biology than chemistry with all our peptide projects. And materials are only a fraction of the whole. When we consider that a student, technician, or post-doc performs each test, in triplicate, plus characterization of the signal transduction pathways, and perhaps target validation work, labor and overhead become a dominant consideration. A scientist can easily spend a year with all this activity. When we tabulate his/her salary, laboratory overhead, etc., it is clear that the cumulative peptide expenditure, the centerpiece of the research, totals less than 5% of the cellular study costs (Table 1).
Animal Efficacy and Toxicity
Our next step is to evaluate the efficacy of the selected peptide in an orthotopic model (severe combined immunodeficiency [scid] mice) and toxicity in normal mice. Modern peptide-based receptor antagonists are active in the picomolar to nanomolar range and our lead leptin receptor antagonist, Allo-aca, is no exception. This activity identifies the expected mouse doses within, or below, the 0.1–1 mg/kg range (20 μg per shot in mice for 1 mg/kg).
Table 1. Cellular Studies Cost Estimate
We require no more than 50 mg of our peptide for efficacy and toxicity studies: 0.1–1 mg/kg daily injections over 15–20 days, in 30–40 tumor-bearing scid mice and 5, 10, 25, and 50 mg/kg gross toxicity in CD-1. Utilizing a 20-mer with 98% purity, our peptide costs are approximately $1,000. In contrast, 40 scids (2 doses and 2 administration modes in 8 mice per group plus 8 controls) cost us $4,000, with an additional $300 for the CD-1. Here again, additional costs associated with labor, laboratory, reagents, animal housing, and maintenance must be considered. At this point, the peptide acquisition costs are only in the range of 1–2% of the total (Table 2).
Table 2. Animal Efficacy and Toxicity Studies Cost Estimate
Preclinical and Early Clinical Development
As in the case of Allo-aca, when the discovery stage justifies further pharmaceutical development, researchers proceed to controlled preclinical trials.
In addition to acute and chronic toxicity studies during extended drug exposure (7–28 days), genetic/reproductive toxicology, as well as brain, cardiovascular, pulmonary effects, and pharmacokinetic properties, are assessed in rodents and other species. When farmed out to a contract research organization, these costs hover around $1 million, depending on the selected options. When considering sponsor costs, test article stability testing, consulting services, regulatory support, etc., currently the total cost of Investigational New Drug (IND)-enabling preclinical studies is estimated at approximately $2 million.
In the case of our hypothetical 0.1–1 mg/kg daily dose, 2–5 g Good Laboratory Practice (GLP) quality peptide should suffice. Based on recent cost estimates, the peptide costs at this juncture are approximately $20,000–30,000, or roughly 1–1.5% of the total preclinical package expense. Notably, these numbers are calculated based on hormone-type peptide drugs or peptides acting at low doses on receptors. Some peptide drug classes, such as antimicrobials, will need higher peptide amounts, but even then, the requirement would not exceed 10 g during preclinical toxicology assessment (Table 3).
Table 3. Commercial Peptide API Costs*
Table 4. Preclinical/Early Clinical Development Cost Estimate
If and when IND approval is secured, the process continues to human clinical trials.
Since peptide drugs seldom fail in the preclinical stage (animal toxicity) and Phase I human trials (safety, tolerability, pharmacokinetics, and pharmacodynamics), an increasingly common practice is to combine Phase I and Phase IIa (biological effects in humans and dosing requirements) studies. As such, procurement of 1 lot of GMP quality peptide to serve all 3 early clinical development stages is best practice. Human doses (mg/kg) are usually one-tenth of those required for mice as the result of a 12-fold reduction in body surface area/weight ratio [5]. As such, 100–200 g of peptide should be sufficient for a combined preclinical/Phase I/Phase IIa investigation.
Of interest, peptides are at something of a disadvantage compared to small molecules in terms of serum stability and pharmokinetics as discussed my previous article [6]. Yet rapid biodistribution, potential metabolite activity, and low toxicity risk make these compounds highly desirable therapeutic agents.
Phase I trials usually employ 20–80 patients with an average patient cost of $22,000 [7]. Patient expense alone therefore amounts to approximately $1 million. With the addition of sponsor expenses, and similar calculations for Phase II/a trials (per patient costs at $37,000), the total costs to reach a go-no-go decision after Phase IIa are currently estimated at $12–15 million. At this point the required 100–200 g of our hypothetical peptide would cost about $250,000–$400,000. Once again, the price of the peptide API is only 2–3% of the total early clinical development costs (Table 4).
Late-stage Clinical Trials and Postregulatory Approval
When most drugs, including peptide-based therapeutics, fail it is in Phase IIb and Phase III clinical trials when human efficacy has to be documented and compared to existing protocols. At this stage, the focus is on clinical design and activity assessment rather than additional API acquisition charges. Current cost estimates for executing all late-stage clinical activities start at $100 million. So despite all the concern about the high cost of peptides compared to small molecules, the relative cost remains negligible.
More importantly, biological drugs (peptides and proteins, including antibodies and their fragments) generally enjoy an increased clinical success rate compared with small molecules. This topic will be discussed in detail in my upcoming article, “Relative Success Rates by Drug Class, the Case for Peptides.”
Return on Investment
Once a New Drug Application (NDA) approval is obtained, commercially available drugs behave much the same as other marketed products. Drivers such as demand, physician/patient preference, competing therapeutic options, and in some cases politics, influence purchase and reimbursement costs. In the case of life-saving drugs administered intravenously or by more invasive means, drug prices are strongly influenced by the required clinical procedure and dose delivery environment.
As an example of a successful peptide drug, ziconitide is a 25-amino acid conotoxin analog, containing 3 disulfide bridges. It is indicated intratechally for management of severe chronic pain in patients who do not respond to morphine. The annual usage of the peptide is 7 mg or less per patient with a lifetime treatment cost of $200,000 per patient.
Drugs that patients can administer themselves subcutaneously are clearly more viable for larger populations. And there are many success stories. Exanatide is a 39-amino acid peptide hormone that has biological properties similar to the human glucagon-like peptide 1. Tens of thousands of diabetic patients use an autoinjector to deliver 5 or 10 μg peptide twice a day. The no more than 7.3 mg annual drug use is priced at $4,200 wholesale
Boutique peptide drugs are even more economical, although the patient population is smaller. The total number of prescriptions (new plus ongoing) of tesamorelin, an N-terminally protected version of the 44 amino-acid growth hormone-releasing-hormone, is approximately 4,000 in any given time in the US. It is sold in 2 mg/day vials totaling 730 mg per person with an average cost of $24,000 per patient year.
Back to T-20, a 36-amino acid HIV fusion inhibitor. This is the difficult child in the family with an annual usage of 66 g per person and $25,000 in treatment charges. Although it never realized its expected market potential, T-20 remains a model for a fully synthetic, highly active peptide drug.
Table 5. Comparative Advantages of Peptide Therapeutics
Relative Value of Peptide
Therapeutics In isolation, peptide costs might exceed those of small molecule drugs, but for most peptide therapeutics, in every stage of the drug development process, the API expense is nearly negligible. And in direct opposition to concerns over pricy peptides, the development advantages of peptides, compared to small molecule drugs, make the API price differential essentially irrelevant (Table 5).
References
- Porter, J.E. (2013). Op-ed: Cuts in research funding undermine medical innovation. ElsevierConnect, Aug 13.
- McKerrow, G. (2003). Roche prices enfuvirtide (T-20) at 18,980 Euro a year—making it the most expensive HIV drug yet. I-base HIV treatment bulletin, I-base.info/htb/10939.
- Otvos, L., Jr. Identification of adipokine receptor agonists and turning them to antagonists. Methods Mol. Biol. 2013; 1081: 195-209.
- Otvos, L., Jr.; Kovalszky, I.; Scolaro, L., et al. Peptide-based receptor antagonists for cancer treatment and appetite regulation. Biopolymers 2011; 96: 117-125.
- Reagan-Shaw, S.; Nihal, M.; and Ahmad, N. Dose translation from animal to human studies revisited. FASEB J. 2008; 22: 569-661.
- Otvos, L. Peptide-based drug discovery & development, common misconceptions. Pharm. Outsourcing Mar/Apr 2014; 15(2):40-43.
- Silverman, E. Clinical trial costs are rapidly rising. Pharmalot 2011; July 26. peptide twice a day. The no more than 7.3 mg annual drug use is priced at $4,200 wholesale.
Professor Laszlo Otvos’ current research focuses on the development of antimicrobial peptides to resistant infections as well as agonists and antagonists to adipokine receptors. His first-of-kind and optimized peptide analogs show promising preclinical advantages over conventional therapy against not only bacterial infections, but also metabolic and cardiovascular diseases, certain cancer types and arthritis forms. Currently Laszlo serves as Councilor for the American Peptide Society, Regional Editor for Protein and Peptide Letters and Senior Editor for Biochemical Compounds. His research papers have been cited more than 12,000 times.