Tap the word 'cure' into Google and the phrase ending '...for cancer' springs up within a split second. The world's biggest search engine knows what we, as human beings, are most afraid of and what mankind's most significant achievement might be in the coming years. Of course, cancer is not the only, potentially terminal, disease which blights mankind. Alzheimer's, HIV and diabetes still represent massive challenges for the healthcare industry to overcome, and while some effective treatments might exist for all these illnesses, a cure remains as elusive as ever. In this feature I'll analyse just how far drug companies are from curing cancer. I'll following up with a series of smaller pieces on Alzheimer's and HIV.
Healthcare investors but, moreover, people at large, are keen to know: have we found a cure for cancer? The short answer is no. But that doesn't mean exciting things aren't happening in healthcare, nor does it mean we aren't moving closer to that possibility.
Immunotherapy: the future of cancer treatment
'Immunotherapy' is a term many might have heard of but few claim to understand. The official definition reads as "the prevention or treatment of disease with substances that stimulate the immune response". But it's not altogether clear why this term has been splashed across the broadsheet press of late.
The immune system is everyone's internal protection system and it's designed not to turn on healthy tissue and purge it. But cancer is an affected version of healthy tissue disguised as normal, and it often escapes typical immune defences. BBC health editor James Gallagher puts it well: "Cancer performs the chemical equivalent of shouting 'move along, nothing to see here'... it does this by producing proteins on its surface that perform a 'chemical handshake' with immune system cells to switch them off." The immune system's defence process is shut down by the very bad cells it is designed to protect against. That also helps explain how cancers spread if other symptoms do not present themselves, in turn motivating the patient to seek further testing, diagnosis and treatment. The reason immunotherapy drugs get the healthcare industry excited is because they give power back to patients' immune systems - to use them, kick start them and strengthen them to prevent this fatal 'handshake'.
Data presented at the American Society of Clinical Oncology (ASCO) this year propelled immunotherapy into the headlines. UK-led research showed 60 per cent of advanced melanoma skin cancers receded when two immunotherapies were given to patients in combination. This kind of dual treatment even stopped some cancers spreading for nearly a year.
But industry professionals are quick to insist this doesn't signify a cure. For a start, not all immunotherapy drugs work equally well in all patients, just as they don't work the same way for all tumour-types. Worryingly, it's not completely clear why this is. Is it about the stage of cancer? The size and shape of the tumour? Or the general health of the patient prior to treatment? The answer might be yes - or no - to all of the above. Accessible research on niche cancers is also severely limited, and potential treatments based on this kind of therapy are extremely expensive. It's crucial, therefore, that immunotherapy drugs are only administered to patients whom doctors are confident have a good chance of responding to them.
What have genomics to do with it?
This is where genomics start to enter the picture. Bill Maris, Google Ventures' managing partner and president, recently told Bloomberg it's possible to "legitimately invest in a company that could cure cancer". He went on to explain that "curing cancer" comes down to "reverse-engineering stem cells". His comments attracted much criticism from healthcare professionals across the industry. Many were quick to point out that cancer has been significantly curbed in recent years by behavioural changes alone, for example, quitting smoking decreases the likelihood of lung cancer, while vaccines have already been developed for human papillomavirus, which causes most cervical cancer, and hepatitis B, which causes most cases of liver cancer.
Unlike other genetic diseases, such as sickle cell or Hutington's disease, cancer is not linked with a few specific, identifiable genes. Instead, it's the result of several mutations, tens of hundreds of tiny twists in each person's genes. To say that each cancer tumour is unique is a massive understatement. Journalist Erin Brodwin has said it's like trying to design a net to catch a creature which is constantly changing its size and shape. It lives mainly in the water, but sometimes chooses to live on land, she adds.
It's also important to remember most people don't have a higher risk of cancer because of the genes they inherit from their parents. Instead, cancers arise as a result of copying errors (known as mutations) in the inherited genes as our bodies make new cells to maintain our organs. It's these mutations that the immune system is designed to recognise, flag and expel, but as we've said, sometimes it misses the signs.
However, if immunotherapy drugs can be shown to switch the immune system back on, in the right situation, this kind of treatment can have real efficacy. It's true, some patients have been rendered cancer-free with therapies aimed at increasing the body's own ability to fight cancer.
In short these are the topics to look for when investing in the development of future cancer treatments. We're not that close to finding an all-out cure but as research continues, these companies could discover drugs - or a combination of drugs - that prove effective in more patients as a pattern emerges.
A word of warning: this type of investment is not the same as a traditional pharmaceutical company stake. Those companies have resources - cash, debt, extensive research teams - to see drug development through. A failure for a biotechnology or even small specialty pharma company has the potential to sink it completely. Unlike big pharma, many don't make any money in the meantime, either, so valuations are pie-in-the-sky at best, whereas big pharma also comes with a hefty dividend yield to entice long-term shareholders in.
Is big pharma out of the race?
Before looking at the real innovators, it's worth arguing that big pharma isn't out of this race entirely. In fact, their future growth may well depend on it. Rather cynically, cancer treatment means big profits to pharma companies and they seem willing to sacrifice growth in other divisions, preferring to focus instead on the long-term rewards from oncology.
Picking between stalwarts AstraZeneca (AZN) and GlaxoSmithKline (GSK), it's the former that seems to have the competitive edge at the moment. The latter offloaded its oncology arm as part of a high-profile 'asset-swap' deal with Swiss rival Novartis, before signing a smaller deal with an Oxford-based oncology group a matter of weeks later. But even at the time of half-year results a week or two ago, all the market was keen to hear about was Astra's foray into new cancer drugs.
The Anglo-Swedish giant has secured two new regulatory approvals in the second quarter of the current financial year alone. The first was won in the US for Iressa, a new lung cancer treatment, while the second - a breast cancer drug called Faslodex - was given the green light in China.
But AstraZeneca is doing its best to achieve monopoly status in this field. Its AZD9291 treatment targeting non-small cell lung cancer is also making its way through clinical trials for use in patients who have developed resistance to Iressa. Patients stop responding to treatments such as Iressa when their body stops responding to drugs known as tyrosine kinase inhibitors (TKI). Originally, TKIs target initial gene mutations that have caused the cancer but a subsequent gene change during treatment renders them ineffective. That's where Astra hopes it has the answer with AZD9291 - it works against both the original gene change and subsequent one. It may help people whose cancer has started to grow again despite being treated with a TKI. Research is still fairly early stage but those wanting to invest in big pharma and potential cures for cancer could do worse than AstraZeneca. Big pharma is certainly not out of the race.
Do specialty pharma companies have a role to play?
What qualifies a company as a 'specialty pharma' company has been the subject of serious debate in the last couple of years. Broadly speaking, companies such as Shire (SHP), GW Pharma (GWP) and Circassia (CIR) have all been tarnished with the 'specialty' brush at some point. For the sake of argument, let's say a specialty pharma company is one interested in developing treatments for rare diseases, based on specialist technology which doesn't depend on sales of 'traditional' products - namely, respiratory - for the bulk of their sales.
However, this space can be daunting for investors because these companies tend to be at very different stages of their growth cycle, unlike their stalwart big pharma cousins. But digging deep can pay back here and GW in particular can offer an interesting take on the treatment of cancer.
First things first. It's not developing a treatment for curing cancer but it does have a potentially game-changing product in the works for treating cancer patients. Namely, Sativex (one of GW's portfolio of cannabinoid-based drugs) has already been approved for treating spasticity in multiple sclerosis patients. But GW is trialling the drug for use as a painkiller for cancer patients undergoing rigorous and unpleasant treatment.
Admittedly, one of three third-phase cancer pain trials of Sativex has failed to meet its initial targets, but the company still has two additional trials under way. If these trials are successful, GW would be able to submit a new drug application with the US Food and Drug Administration (FDA).
But this is where risk enters the picture as opposed to investing in Astra or GSK. GW barely makes any money aside from grants and the products it has in Europe. And the cost of development often wipes out any top-line gains anyway. Therefore, investors can't expect any kind of return until a blockbuster discovery or regulatory approval is made. It's a big bet, and one that could fail, but if investors are keen on a basket approach and balancing their portfolio with income earners in the meantime, there seems to be significant promise lurking within specialty pharma groups.
Where are the innovators?
It's clear that GSK believes the most promising drug development lies outside the big pharma confine. It's easier for big pharma to follow this path because it shares costs, they can target drugs that are in later-stage trials and therefore have higher chances of proving successful, marketable and profitable.
So, perhaps it's possible for investors to play the same game and invest at the grass roots level. One dynamic example is China-based Hutchison China MediTech (HCM). This Aim-traded group is trying to transform itself into a global pharmaceutical business, having build up its own in-house research and development (R&D) division before partnering off and sharing the load with big pharma partners. Only a couple of weeks ago, it urged investors to take note that the business is now officially split into two parts: the 'innovation platform' and the 'commercial platform'. From this point on, chief executive Christian Hogg has said the company intends to hang on to as many of the global commercial rights to its own in-house developed drugs as possible rather than sell them off to the highest bidder. It's about keeping profitability in the hands of the developer.
That might be the future plan but, for now, Chi-Med is busy working on several clinically-trialled products. In fact, the company has 17 trials under way and another seven should start before the end of the year. Four of those trials include Phase III studies for oncology drugs fruquintinib and sulfatinib, the former being co-developed with US giant Eli Lilly (US: LLY). The drug has already demonstrated its potential to treat advanced refractory solid tumours and the latest rounds of testing means applying the drug against several types of solid tumours to assess its efficacy in a variety of patient cases. If all goes well, Chi-Med will receive several fees and milestone payments from Lilly and if the drug is fully approved and commercialised, the Aim company will earn royalties from all sales made in China.
But Chi-Med isn't developing drugs just for the Chinese patient population - it intends to sell its own wares globally, albeit many of its trials and approvals are centered on the Chinese market. That makes the company an interesting play, not just on the growth of the oncology market but also the evolution of the healthcare market - and specifically the private healthcare market - in China.
Another company turning its hands to big pharma partnerships is fellow Aim constituent Oxford BioMedica (OXB). It has been around for years, but events turned a corner when Novartis (Swi: NOVN) came knocking and signed a transformative partnership deal with OXB last year. As a specialist in gene-based therapies, it's unsurprising that OXB has caught the attention of big partners. Cancer treatments are considered lucrative if they can target patients in that 'personalised' manner, even targeting specific gene mutations. OXB has had its own high-profile clinical failures in this field, such as its TroVax kidney-cancer drug in 2008, but the company has signed a three-year licensing deal to help develop Novartis's Cart-19 leukaemia drug.
Cart-19 involves re-engineering a patient's disease-fighting T-cells so they hunt down and destroy cancer cells. Early-stage trials found 19 out of 22 children with lymphoblastic leukaemia went into complete remission after receiving it. In return for helping Novartis develop the drug, OXB will receive up to $90m over the next three years and the Swiss giant will take a 2.8 per cent stake in the company. But that doesn't include undisclosed royalty payments from future potential sales of Cart-19. Investing in OXB is riskier than taking a long-term view on Novartis (after all, the group will need to repeat its success with other big partners to keep earnings ticking upward), but all being well the returns are likely to be far more significant.
Finally, if true innovation in this space is what you're after there's hope for companies such as Midatech (MPTH). Midatech's primary technology platform involves gold nanoparticles. The nanoparticles can carry drugs into the human system, allowing for a more 'targeted' delivery. These tiny nanoparticles can cross membranes and move between and through other cells to reach diseased cells more efficiently, too. They're also easily excreted by the body and are inert, so they shouldn't trigger any immune response. Several therapeutics and targeting agents can also be attached to a single nanoparticle, meaning drugs can be easily administered in combination - a method that is proving highly applicable in immunotherapy. Treatments under trial - for diabetes as well as cancer - look for 'typical' cells in all patients before attacking relevant cancerous cells. Unlike existing drugs on the market, the number of 'normal cells' spared in the process is much higher.
But investors should be wary. These companies are not always the golden ticket they're made out to be and the risks are inevitably high. The lack of earnings gives no security for the initial investment and valuations are hard to come by, if not entirely impossible.
Cancer specialist e-Therapeutics (ETX) (listed on Aim in 2007) still hasn't made a penny in sales. But that didn't stop it spending nearly £10m on R&D last year. There's a lead product - simply named ETS2101 for now - which has a number of clinical trials under way. Last year, a Phase Ia trial established a maximum tolerated dose, which means a new Phase IIb trial to treat pancreatic and liver cancers was due to kick off in mid-April. Results from a separate brain cancer trial in the US are due imminently. But progress is painfully slow and losses continue to rack up. the best news has come from the company's in-house discovery platform. Last year the platform successfully tested 2,200 molecules, compared with just 100 in 2013. This means the analysis of a disease process can take a matter of hours rather than weeks, and chief executive Malcolm Young is hoping he can use the platform to attract bigger partners looking to streamline their drug discovery work.
Diagnostics are still important
The flip side to investing in cancer cures is investing in life-changing diagnostic tools that can help discover these diseases in the first place. The industry is moving towards increasingly simple diagnostics where indications of complex cancers - such as pancreatic, for example - can be detected from urine tests. Pancreatic cancer is often very advanced by the time it's diagnosed and fewer than 5 per cent of patients survive five years after diagnosis. But scientists have discovered a certain protein is often present in patients and it's a protein that can be detected with a urine test. Of course, symptoms are likely to present themselves to prompt patients to seek diagnosis, but there's a lot to be said for quick and inexpensive diagnostics that could help expedite the time taken between diagnosis and treatment.
Akers Biosciences' (AKS) Vivo product, for example, is a non-invasive, time-efficient breath-testing tool for measuring biological markers of oxidative stress in exhaled breath samples. Oxidative stress, also known as free radical damage, is a naturally occurring process where cells are damaged, their cellular structure degrades and cellular processes eventually malfunction. Scientists recognise life-threatening diseases, including cancer, are directly correlated to oxidative stress. In short, the higher the level of oxidative stress, the greater the risk.
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The search for a cancer cure is ongoing to say the least. It's complex, time consuming and expensive. Any treatments proven to be highly effective on a personal level are bound to be available only to a limited patient population. But they mean big profits to the companies responsible for their discovery and development. Whether through big pharma, biotech companies or medical device companies there are several ways to access the market. The possibility of failure is high, but the returns - not to mention the significance for the human race - could be monumental.
