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Sunday: A new drug changes the lives of patients with rare disease.

Today: Company nearly went broke before breakthrough.

In the mid-1990s, researchers at Alexion Pharmaceuticals believed they had found a breakthrough drug, an antibody that could be cloned in the lab and given to patients to block the damage caused by a crucial part of the immune system.

If it worked, it could help millions of patients, treating conditions ranging from heart disease to rheumatoid arthritis.

The effort to develop what is now the world’s most expensive drug brought them to the brink of financial collapse, demonstrating the razor thin difference between becoming a billion-dollar pharmaceutical company or just another failed biotech startup.

Alexion had screened some 30,000 antibodies, finding two that would target the precise link in the chain that produces the proteins known as complement. After further testing, researchers discovered only one of the two antibodies would work. With their war chest of investment funding rapidly dwindling, the researchers had all of their eggs in a single basket, an antibody they called 5g1.1.

Then in a blink of an eye, they almost lost it.

With the technology available at the time, antibodies had to be produced by live mammals. Scientists would inject human proteins into mice, whose immune systems made antibodies against them. The spleens of the mice were removed, and individual antibody-producing cells isolated. Those cells were then transferred into a large vat of cell culture, a specially designed broth in which the line of cells would churn out millions of identical antibodies.

“That can become contaminated with bacteria, and if it does, you just lost your cell line,” said Stephen Squinto, co-founder of Alexion. “Ours became contaminated, and the only way to decontaminate it was to put it back in the mouse.”

For weeks, their future rode on the immune systems of a handful of laboratory mice. The researchers could have started from scratch, re-creating the process they used to find their billion-dollar antibody in the first place. But that would have set the company back a year, maybe two.

“We were a cash-starved young startup biotechnology company with a lot of investors skeptical,” Squinto said. “If we said we’re going to need another year of development because I lost my cell line, that wouldn’t have been a welcome message. I’m not sure we would have been in business.”

The near catastrophe is but one example of the perilous journey from potential drug candidate to blockbuster medications, and one of the reasons biotechnology drug prices are now reaching astronomical heights.

The monoclonal antibody, 5g1.1, was later renamed eculizumab, and, in 2007, marketed as Soliris to treat a rare blood disorder at an annual price of more than $440,000. Last year, the company sold more than $1.2 billion worth of the drugs. The entire enterprise could have just as easily gone bust.

“We didn’t have a backup to work with,” Squinto said. “In some ways, we were very, very lucky that this made it all through development and into the commercial space.”

Basic science

The story of how Soliris became a golden goose for Alexion stems back more than 20 years. Scott Rollins, then a graduate student at the University of Oklahoma, began studying a disease known as paroxysmal nocturnal hemoglobinuria, or PNH, in which complement destroyed red blood cells.

Rollins discovered that red blood cells in PNH lacked a molecule called CD59, which protects the cells from complement. Without CD59, complement would bore holes in red blood cells, causing them to explode. The damage led to a host of problems for PNH patients, including severe kidney damage and fatal blood clots.

Rollins reasoned that CD59 could be given to PNH patients to inhibit the destructive action of complement.

“As it turned out, it wasn’t a very good inhibitor,” he said. “It’s meant to be on the surface of the cell and not something you would give to someone as a drug.”

But Rollins and his fellow researchers patented the idea of using CD59 as a therapy, and they threw in the concept of using monoclonal antibodies, an emerging field of immunology.

Rollins went on to do post-doctoral work at Yale University, where he met Leonard Bell, who co-founded Alexion with Squinto in 1992. They brought Rollins, his patents and complement experience on board. Their goal was to create a complement blocker that could prevent the damage being done in some of the world’s most burdensome diseases. Complement is one of the most basic parts of the immune system, working in conjunction with — or complementing — antibodies to ferret out foreign invaders and clear them from the body. Complement is produced through a cascade of steps creating a series of proteins that each play a role in fighting off bacteria and viruses.

“Almost every large pharmaceutical company in the 1970s or the 1980s had programs to develop complement blocking,” Squinto said. “The field was littered with failure.”

Initially, Alexion had made the same mistake as its failed counterparts. “We weren’t trying to develop an antibody,” Squinto said.

They were trying to find a protein that would act like the body’s natural complement inhibitors, the same route Rollins had tried in Oklahoma. In laboratory tests they tested the proteins’ effect on complement by comparing it to the actions of natural antibodies to complement.

“The antibodies always worked … and the protein we were trying to make as a drug did not,” Squinto said. “After about a year of this we finally said, ‘Let’s wake up here guys.’”

They realized they needed to search for an antibody instead.

“So here we were a young biotech company trying to develop a monoclonal antibody as a drug to block the complement system,” he said. “There wasn’t a lot of interest in what we were trying to do.”

Patients in need

Dr. Peter Hillmen, a hematologist from the U.K., had plenty of interest. For years, Hillmen had treated the largest group of PNH patients in the world, with only limited success. A third of his patients died within five years of diagnosis, and there was little he could do to stop it.

In 1992, when Hillmen learned what Alexion was attempting, he penned a handwritten letter that Squinto still has in his filing cabinet. If Alexion was building a drug to block the complement system, PNH would be the ideal disease to treat.

Hillmen’s pleas fell on deaf ears. Rollins, too, had tried in vain to convince Bell for years.

“He was very resistant from a commercial standpoint,” Rollins said. “Companies didn’t think they could survive by developing drugs because there were so few patients. How would you ever make enough profit?”

Instead, Alexion tested the drug for scores of more common diseases affecting millions of patients that could support the billions of dollars in drug development, manufacturing and marketing costs the company envisioned. In patients with rheumatoid arthritis, heart disease or lupus, Soliris had only a marginal effect.

Faced with the prospect of running out of money, Alexion officials finally decided to give PNH a try.

By that time, the landscape for drugs to treat rare diseases had changed.

In 1994, Genzyme won approval to market Cerezyme, an enzyme used to treat Gaucher’s disease, a rare disorder affecting 1 in 20,000 newborns. The drug was priced at $200,000 a year, and by 2000, the company had topped $500 million in annual sales.

“They sort of paved the way,” Rollins said. Suddenly, a PNH drug seemed much more viable.

Alexion officials knew that Soliris was perfect hand-in-glove fit for the blood disorder.

“Pretty much the whole disease is complement,” said Dr. Robert Brodsky, a Johns Hopkins hematologist who conducted some of the early testing on Soliris. “It was a very clean disease, and to get your licensing and your FDA approval, that was the easiest disease.”

Hillmen conducted the first clinical test of the drug in 11 PNH patients. Almost on a daily basis, Squinto and his colleagues received reports of the almost miraculous turnaround in those patients.

“I’ve been doing this for 28 years now, and that’s a moment in time I will never forget, as that data is rolling in and we’re hearing these patients’ stories about how dramatically different they’re feeling,” Squinto said. “You just don’t get an opportunity in this field to get those types of clinical results.”

Two larger studies in PNH patients showed the same remarkable results, and the company secured fast-track approval for the drugs in the U.S. and Europe in 2007. Alexion shocked the world by pricing the drug at $390,000 per year. Six years later the annual price has topped $440,000.

“I wish the drug were cheaper,” Rollins said. “Now that Alexion and all of us have made substantial amounts of money … it would be nice if the drug was priced much, much lower so that more could get access to it.”

That could happen as Alexion expands the market for the drug. It has since added a second approved indication, for atypical hemolytic-uremic syndrome, another ultra-rare disorder. And last month, the Food and Drug Administration granted Soliris various development incentives to test the drug for the prevention of delayed graft function in kidney transplant patients.

“People get upset that the price is unreasonable, and it is, but on the other hand, you can’t do this type of research in any other forum,” Brodsky said. “And if you don’t incentivize them to make some sort of a profit from drug development — now we can argue about how much profit, that’s a reasonable thing to discuss — who is going to study these orphan diseases?”

Soliris has prompted debate over whether the high prices for orphan drugs is sustainable, and in other areas of medicine, doctors have begun to push back against the high cost of drugs. Last year, a group of oncologists railed against a new high-cost chemotherapy drug that offered little additional benefit over established, lower cost treatments.

“It’s such a marginal improvement in some of these drugs,” Rollins said. “With Soliris, there really is no other option. If you have severe PNH, you don’t really have another choice.”