Q&A: Fortress Biotech’s Lindsay Rosenwald on breathing new life into sidelined drugs

One downside of the explosion in our knowledge about potential drug targets is that many promising candidates are getting left on the backburner.

Fortress Biotech is one company looking to in-license and develop these under-utilised but high-potential assets. We spoke to CEO Lindsay Rosenwald to find out what kinds of drugs can benefit from this approach and how Fortress identifies them.

What unmet needs were you hoping to address when you started Fortress Biotech?

I discovered years ago as a private investor that life sciences is a huge, inefficient market. There’s about $300 to $400 billion spent annually around the world on research and development. Once those drugs get into the clinic, they’re often available for acquisition or partnership deals. There are many important diseases that have unmet needs. Fortress Biotech and our partner companies now have more than 25 product candidates, 16 of which are in clinical trials, and five revenue-generating dermatology products.

How do you go about identifying under-utilised drug candidates that may have potential? What separates them from drugs that have been abandoned due to poor results?

It’s really brute force. We have a dozen very talented business development people, most of whom are MDs or PhDs. I love training brilliant young people from medicine and science to find promising drugs.

“Drug developers are now so good at identifying and hitting targets that they have more options than they can afford to develop”

There are many different kinds of drug candidates now and most companies specialise in a certain area. By contrast, all Fortress Biotech cares about is the drug in the clinic. We look at whether it treats an unmet need, if we can get a good return, and if it’s good for society. We call experts to learn more about the disease and figure out if there’s a market for it. We’re interested in drug candidates that are furthest along and have good human data.

Then we decide whether to pursue it based on our own algorithm. We look at what’s on the landscape. We call experts to learn more about the disease, figure out if there’s a market for it. Are there patents? How good are the data? Can you manufacture it? What’s the budget? What’s the likelihood of success?

I see five or six new opportunities a day. There are new drugs going into the clinic every day, so there are many opportunities, and we’re very selective.

What is the process from there?

Fortress Biotech often jumps in at a later stage of the drug development process, so we’re not starting from square one. We are very risk averse. We work hard upfront to find things that will work, though sometimes we’ll identify fixable issues and take care of them ourselves.

We have a thorough due diligence process that often costs around half a million dollars. Data show that only 70 percent of drugs move from Phase 1 trials to Phase 2, and only 33 percent of those go from Phase 2 to Phase 3. It’s a long, expensive process, and we have to be confident that we’re going to generate a return and help meet patients’ needs.

Why do these assets tend to be put on the back burner by companies? Is this a fairly systematic problem in the industry?

The problem is that drug developers are now so good at identifying and hitting targets that they have more options than they can afford to develop. No matter how big the company is, they have to live within their budget. Giant companies are always reprioritising. At least 10 to 20 companies drop major programmes every year. If you’re there at the right time, you can pick up these assets at very favorable terms.

Is there anything the industry could do to reduce the number of drugs it leaves aside like this?

I don’t think there’s anything the industry can do to reduce the number of drugs that get put aside, but that can be perceived as a good thing. It means the science is advancing rapidly.

What do you need to create a drug? A target. Science is finding more and more targets to treat diseases.

In the old days, we only had small molecules. Now there are gene therapies, cell therapies, antibodies, etc. In the past, we couldn’t crack difficult targets like KRAS, but we’re coming up now with molecules to address these targets. There are more targets and more ways to go after the targets. That means there are lots of things that will fall by the wayside.

What are some examples of drugs you’ve successfully commercialised in this way?

There are many I’m proud of, but I’ll mention four. The first is Zytiga at Johnson & Johnson, which is the biggest selling prostate cancer drug in the world. When I identified it for Cougar Biotechnology, it was being developed by a small British company. There were no patents, but we knew that it had dramatic effects on prostate-specific antigen levels at the end-stage. Before market exclusivity ended, it was generating annual revenue of about $4 billion.

The second is Northera for dizziness and lightheadedness in patients who have Parkinson’s. We found out that it was being successfully used in Japan to treat highly untreatable neurogenic orthostatic hypotension patients, and there was no patent. We bought the data from the company developing it, set up Chelsea Therapeutics, got it approved, and sold it to Lundbeck for about $600 million.

The third drug is Trisenox for acute promyelocytic leukemia, a form of leukemia that was incurable before the drug came on the market. It was being used in China and was highly effective. Then we found a researcher at Memorial Sloan Kettering Cancer Center who was already exploring it. We ultimately bought worldwide rights to the drug from the institution and completed the FDA approval process in record time, about two-and-a-half years.

Last year, Fortress’ partner company Caelum Biosciences entered a $500 million agreement with Alexion Pharmaceuticals for CAEL-101, a first-in-class monoclonal antibody to treat light chain (AL) amyloidosis. We’re excited to see that drug candidate move towards the market.