Andrei Ivachtchenko, Chairman of the Board of Directors of High-Tech Center ChemRar, became widely known at the pharmaceutical market in the autumn of last year, when together with his partners he signed a contract with Swiss company Roche for the development of drug for HIV/AIDS treatment. Russian Government acknowledged the business model of that deal to be an exemplary one for Russian pharmaceutical industry.

— What is the progress in HIV/AIDS clinical trials?

— Currently, the trials are in their phase I and are conducted in volunteers to prove the safety of the investigational product. Our investigators are gradually titrating the dose to the therapeutic one and are monitoring the so-called accumulation effect. I hope by the end of summer we finish phase I and proceed to phase II, when the drug is to be studied in a selected group of AIDS subjects. About September or October we expect to focus on the therapeutic window (i.e. the difference between efficacy and potential toxicity of the investigational product). For today’s products such window should be at least one hundred times.

— This spring a large unit of Roche “troops” landed in Khimki. What do Swiss specialists think about your first results?

— The guests conducted due diligence and were so amazed with the pace the HIV project develops and with the quality of our results that they immediately started discussing a possibility to pass several new similar projects in other therapeutic areas to us. We turned down one project, since we are conducting trials in the same area that are currently at a more advanced stage than those of our partners. Other proposals include studies in such areas as central nervous system disorders, cancer and hepatitis C. Our researches are currently studying the potential prospective of those projects.

— According to the terms and conditions of the deal Viriom will be responsible for the HIV project until it reaches phase II. Why phase II?

— That’s because as a rule after this very stage the scientific risks are being minimized. Statistics show that out of ten projects started from the non-clinical stage only two or three successfully pass phase II clinical trials, while the rest are being terminated due to various reasons.

— Why are phase I and II clinical trials of innovative products in Russia almost stopped?

— It is because phase II study is a very delicate scientific work, "a manual tuning" that can be done only by an expert physician. As a matter of fact, the birth of a new product is at stake. Such extra-class specialists are not numerous in our country. It is not by chance that innovative products are tested in the country of their “nationality”, i.e. English products are tested in England and American drugs are tested in the United States. In Russia, some pharmaceutical manufacturers do conduct studies of this phase. The object of such studies, however, can hardly be called classically innovative. They study new indications (i.e. a product was administered to treat one disease and then was used to treat a different disease, like for example Viagra), different combinations, and analyze new forms. Our project has turned out to be unique, since no one in Russia has done a similar thing before.

— It is known that for phase III clinical trials international pharmaceutical companies use multicenter design in different countries. What is the place of Russia in this process?

— When ten years ago Russia got involved in the process, the country was found to have a competitive advantage. For this very reason western companies so often and willingly conduct phase III clinical trials in our country.

— What are these advantages?

— Firstly, we have a lot of so-called “pure” patients, i.e. previously untreated. It especially concerns complex diseases, such as for example Alzheimer’s disease. In the western countries, when patients are administered a new drug, it is not always clear whether it is the drug that does not work or whether it is patient’s receptors that do not respond to the compound. Secondly, we still have a centralized healthcare and patient registration system. This allows to quickly recruit patients for a study. In foreign countries, however, it is a problem: they have private insurance medicine and information is closed. We have faster patient recruiting. Thirdly, our physicians involved in studies are very motivated, not only with money, but also with the status. The thing is that a physician participating in multicenter-phase international clinical trials will automatically have a publication in reputable specialized journals. All companies publish the results of their clinical trials and list investigators involved in those trials. In the eyes of their colleagues such doctors are rather distinguished. Unlike in Russia, in the United States and Europe such publications are not so prestigious. That is why our doctors make so much effort and produce excellent data. In our country errors are far less numerous.

As a result of these advantages, Russian market of phase III clinical studies is rapidly developing and growing. On the one hand, it is good because patients that have not been treated before get a chance to be cured. Furthermore, our doctors get acquainted with new treatment standards and methods. There are, however, some minuses.

— Are volunteers insured?

— Certainly, it is a mandatory condition for clinical trials. In addition, before a phase I trial is approved, expert organizations of the Federal Service on Surveillance in Healthcare and Social Development (RosZdravNadzor) review non-clinical “dossier” of the drug, i.e. all types of experiments: in vitro, in rats, in large mammals. And they review both efficacy and toxicity. In non-clinical studies you must show the toxicity threshold.

— Why are new drugs based on post-genomic technology less toxic?

— It is because they are originally developed for biological targets. Milligrams of the drug are required to achieve an effect. For instance, Johnson & Johnson sells a new product Velcade in Russia. Two kilograms of the drug substance are enough to manufacture injections worth $200 million. It is a typical target drug. Compare, several tons of the drug substance will be required to sell arbidol for $200 million.

— Why is there such a huge gap?

— There was no understanding of the mechanisms of action, until people deciphered genome. Drugs were developed empirically, with the development process started at the best from mice. In target drugs the molecule is selected by examination of options, similarly to selecting a key to a lock. That’s why they are more effective and have less adverse effects. FDA does not authorize non-target products unless their mechanism of action is demonstrated.

— What is the mechanism of action?

— You must demonstrate correlation between the properties of your product, such as its impact on protein, its action on the cellular level, its impact on the physiological processes, i.e. what its effects on the systemic level are. Without these data generated by hundreds of experiments FDA will not accept your dossier for review. It is interesting to note that we buy from pharmacies many products with a mechanism of action not fully understood, such as aspirin for example. If aspirin had been developed today, it wouldn't have been approved. The same is true of ribavirin used for treatment of hepatitis C. On the one hand, targeted drugs are less toxic, but on the other hand, the cost of developing targeted drugs is several times greater.

— What criteria do you use when choosing projects from pharmaceutical manufacturers?

— First we look at the cause why the project has been suspended. It is clear this should not be a scientific cause, for there is no sense in giving bad molecules to us. There may be several causes. For example, in our case, Roche acquired Genentech, focused on cancer and discontinued its development work in the field of AIDS. As a rule, in this case manufacturers pass this developments to their competitors on certain terms and conditions. Not infrequently developments are transferred to scienticts dismissed in the course of reorganization of an activity area. Those scientists attract finance through special venture funds, continue development within a small enterprise and in case of success sell the results to their former employer at the agreed price.

— What sources for promising innovation-driven projects are available today?

— I think two sources are available. First, manufacturers themselves who are revising the priorities of their ongoing projects. For instance, there has been a merger or an acquisition and some projects are duplicated. As a rule, in this case they keep the most advanced projects for themselves and transfer alternatives to someone else. If an alternative becomes the primary option, then they buy it back. Changing priorities is also possible, when a company decides to focus on a certain therapeutic area. For example, Pfizer had about a hundred of such projects after reorganization.

Another source is biotechs, small innovation-driven companies that develop new drugs using finance provided by venture investors. Since due to the economic recession the flow of venture funding has been considerably dried, we estimate that the European and the U.S. market have about a thousand biotechs with finance remaining maximum for six months. Unless they make a step forward during that period, they will be wound up or sold for nothing. Some of them are ready to yield 40 % of their shares to us, if we agree to bring their clinical trials to the end of phase II. We have conducted several hundreds of negotiations and have compiled a short-list of 40 biotechs willing to work with us. As soon as we have a source of funding by the state in the face of Rusnano, Russian Venture Company or private venture capital, we are ready to promptly close a number of such deals. According to statistics out of 40 projects we may get eight first-class innovative products with export potential owned by Russian companies.

— Will a new company be created for each product?

— Yes, the successful experience of Viriom may be duplicated.

— What will be next?

— Unless the molecule is discarded, the company's price will increase by 10-15 times. In western countries a company that has successfully passed phase II trials will cost $100 million and more. You may come to venture investors and offer them a stake in order to conduct phase III studies, collect statistics and conduct IPO. Another option is finding a strategic investor. Following phase II all rights in Russia and CIS may be transferred to a Russian partner, for example, to Pharmstandard, with the international rights reserved by the biotech or transferred to an international manufacturer.

— Russia’s position in the market of biotech substances is weak. What should be done to change the situation?

— The quickest way to catch up with the leader is know-how transfer. Special biotech seeding funds should be set up and target grants should be provided to help our exporters. We have special scientific schools in chemistry, biology and virology. They have traditions of a hundred years old. Our BRIC competitors do not have such advantages. Their schools are of 10-15 years old. The problem is that our business operates in the market, while our science still operates in the USSR planned economy. There is a huge gap between them, in which interesting development work disappears. This gap can be closed with projects discontinued in western countries and purchased by our business. Then researches will be involved in the development of market technologies. I think in today's setting this will be the right tactical move. This kind of approach allows creating business with foreign partners throughout the whole chain (development – manufacture – distribution of products). It is this very principle that we use to develop our business, and such business model for localizing all competencies was taken by the Russian government as a template. That was told by the head of the Ministry of Industry and Trade Victor Khristenko during the last Saint-Petersburg Economic Forum. It is not by chance that he had such interest and a great wish to support our experience with Roche.

— What benefits will this model give to Russian business?

— Firstly, little money is paid for innovative project at pre-clinical stage. Secondly, everything we do complies with the highest world standards. For example, Viriom scientific council has Roche scientists. Thirdly, we are approaching public science that lives on taxpayer's money. And the probability that the innovative machinery will start its own developments is increasing. Now we have about 15 promising innovative projects connected with infectious diseases, central nervous system disorders and cancer, and in three or five year one or two of them done according to this model will “explode” in the market.

Interview taken by Sergey Artemov

Phase I

Sergey Artemov
Last autumn Roche (Switzerland) and Viriom LLC, a company of CHT ChemRar Group (Khimki, Moscow Region), signed a license agreement for the development of innovative drugs. Viriom, created especially for this deal, has become the first in Russia to receive rights for non-clinical studies and clinical trials, development of new potentially innovative drugs for the treatment of HIV/AIDS, and the rights to commercialize these products in Russia, Ukraine, Belarus and Kazakhstan. A licensee fee based on sales in the aforementioned countries will be paid to Roche that has retained all rights to these products in other countries. Viriom will receive royalty from Roche for commercialization of these products in international markets. In March RosZdravNadzor, after having reviewed the drug dossier, approved the conduct of phase I clinical trials. Roche undertook to further support research in the field of HIV, and its representatives were included in the board of directors of Viriom.