If Roosevelt Had ‘This’ He Would Still Die
Why Progress To Cure Cancer & Alzheimer’s Is Bottle-necked And A Simple Solution Within Our Reach
by Max Tokarsky
In the final episode of Mad Man, Henry, distraught by Betty’s resignation to late-stage lung cancer, pleads; “what do you think they would do if Roosevelt had this?” Betty’s stoic response is as profound as it is true .. “if Roosevelt had this, he would die.”
Fast forward 50 years, and while your iPhone has way more computing power than an office floor sized IBM of the Mad Man era, when it comes to diseases like late-stage lung Cancer or Alzheimer’s, “if Roosevelt had ‘this’, he would still die.”
In 1900, the top 3 causes of death were all infectious diseases. With a life expectancy of 47, few lived long enough to die of Cancer or Alzheimer’s. The modern era ushered in a whirlwind pace of medical breakthroughs, turning diseases like Polio into distant nightmares of the past and almost doubling our life spans. Yet, somehow despite great technological progress, the rate of drug discovery is slowing in a disturbing way. While news-headlines, almost on a weekly basis, grab our imaginations with inspiring stories of mice being cured of Cancer or Alzheimer’s in ever more innovative ways, most Cancer patients receive the same toxic and only moderately effective chemotherapy drug regimens, which have been around for decades. As for Alzheimer’s, Parkinson’s and MS, no drugs have progressed from the lab to the patient to offer even a small hope for a real cure.
It doesn’t matter if you’re Steve Jobs, Ronald Reagan or Steven Hawkins. Money, power and genius leave us powerless in the face of deadly disease.
Eroom’s Law: The Very Strange Economics of Pharmaceutical R&D
It would seem like the quantum leaps in computing power and technology which made possible instant collaboration across continents and put vast libraries of data and processing power in the palms of medical researchers, should have helped drive medical innovation and reduced the cost of drug discovery. Bizarrely, however, when it comes to the pharmaceutical industry, there is an actual reverse trend and it’s called ‘Eroom’s Law’. Yes, it’s not your imagination, the term is actually Moore’s law spelled backward, and yes, financial analysts have a corny sense of humor.
Moore’s Law is named after Intel co-founder Gordon E. Moore, who observed that over the history of computing hardware, computing power doubles every 18 months. In contrast, Eroom’s Law, first coined by industry analyst Jack Scannell in 2012 writing in Nature Reviews Drug Discovery, is the observation that despite vast technological advances and new scientific discoveries, the average cost of developing a new drug per billion US dollars spent on R&D has doubled roughly every nine years since 1950. That means, adjusted for inflation, it costs 80 times more to develop a new drug today then it did in 1950!
The result of this hyperinflation in the cost of drug discovery is major pharmaceuticals abandoning or greatly scaling back research. This is true to a varying extent for most complex diseases, but it is especially true with Alzheimer’s where Pfizer recently followed almost every other major pharmaceutical in either completely abandoning or drastically scaling back their research programs. The simple fact is, companies can’t make money looking for a cure to save our lives.
At first glance, this seems hard to believe. A successful Alzheimer’s drug can be sold for countless billions and medical journals are full of promising breakthroughs, like the recent Journal of Experimental Medicine article from researchers at the Cleveland Clinic, who reported that reducing the levels of a single enzyme called BACE1 can completely reverse Alzheimer’s in mice and even restore lost memories. Successes like this are not unique, either for Cancer or Alzheimer’s. Dr. Hugo Geerts, who formerly headed Alzheimer’s drug discovery at Johnson & Johnson Belgium and who has now joined our Scientific Board at InvestAcure, described the situation best. ‘We can cure Alzheimer’s in our mice every week, but when it comes to clinical research where real progress needs to be made to cure people, there is simply no funding available.’
If we can cure mice, why can’t companies profitably turn these medical breakthroughs into life-saving drugs?
After all, this is how the system has always worked. Researchers at countless hospital and university-based labs would do the ‘basic’ research. This research would be supported by non-profits and the government via the NIH and the various disease-focused foundations, with grants averaging a few hundred thousand dollars per project. Once a potential drug shows promise in the lab, private companies would license the compound and use investor funds to provide the tens of millions of dollars needed for human trials. Research would move forward, cures would be brought to patients, and investors would make a profit by selling the drug to the public.
What got us here can’t get us there.
What is driving the cost inflation behind Eroom’s Law? Why is the same drug discovery Eco-system of government, philanthropy and the pharmaceutical industry, which successfully conquered so many killer diseases, breaking down when it comes to Cancer & Alzheimer’s?
There are many contributing factors, but it seems that the key issue is that with complex diseases, animal studies just can’t predict the success of a potential drug in human patients. To see if a drug works, we need to go through the lengthy and expensive process of human trials, learning from the success and failure of each, in a slow progression to a potential cure.
Understanding the phases of drug development.
A new discovery showing promise in the lab must first go through a Phase 1 clinical trial to prove its safety. This alone can cost up to ten million dollars. Once the drug is proven safe, it then progresses to a Phase 2 trial where it is given to a few hundred potential patients at a particular dose to see whether it actually has curative potential. After a successful Phase 2, the drug still needs to pass a Phase 3 where it is given to a much larger group of patients at a cost of hundreds of millions of dollars before final approval. But at least at that stage, there is some patient data supporting a positive outcome and substantially de-risking investment. A Phase 2 trial, on the other hand, can cost ten to twenty million dollars and prior to that investment, there is simply no way to know whether the results which showed promise in the lab have any positive efficiency with real patients. Due to the impossibly high investment risk, this stage of drug discovery is known as ‘death valley’ in the pharmaceutical industry.
Complicating matters further, a Phase 2 trial can fail for countless reasons unrelated to the drug’s ultimate usefulness as part of a potential cure. A trial can fail because a drug was given at the wrong dose or was only effective with a particular subgroup of patients. A drug could show a partial impact and may hold promise in combination with other drugs. The only way to know for sure is to test these theories in countless separate clinical trials. HIV, for example, is successfully managed by a ‘cocktail of drugs’, this combination of drugs did not emerge all at once as a successful treatment. Each component of the ‘cocktail’ failed as a standalone in a clinical trial until eventually through large-scale trial and error of countless clinical trials just the right combination was deduced and millions of lives were saved. Failed clinical trials are therefore not failures at all, they are rather stepping stones for scientific progress, testing promising leads which are vital for developing a future cure. This is all very inspiring, but it is not much consolation for investors who just spent thirty million on a trial without producing an actual drug which can be sold to consumers.
Investors are not to blame.
It’s easy to have a gut reaction blaming Wall Street greed in prioritizing profit over cure. The reality is, however, that ‘investors’ are the guys whom you trust with managing your retirement savings and their job is to make sure that you have that money when you need it. Imagine, a conversation with your fund manager… ‘I have good news and bad news… the good news is that your retirement savings were put to good use in the search for a cure…’
With no profit-driven formula to responsibly attract profit-driven investors, and with government and charity funds focused on smaller grants for laboratory research, the ‘Death Valley’ of investment in early clinical stage drug discovery is a critical bottleneck stalling research efforts and a major reason why even today ‘if Roosevelt had ‘This’ he would still die.’
This problem impacts all of us in the deepest possible way.
If we live to old age, about half of us will develop Alzheimer’s. Cancer is likely to strike one in two men and one in three women over our lifetimes. There is a consensus among leading scientists that one day, these horrible diseases will be cured. How soon that day will come, could easily become a life and death question for most all of us.
How much is the current financial bottleneck delaying the discovery of a potential cure?
No one can predict the future, but few are better at estimating probability than Andrew Lo, the director of the Laboratory for Financial Engineering at MIT. His comprehensive study on portfolio modeling for Alzheimer’s drug discovery identified 64 known targets for Alzheimer’s drug discovery. According to the study, each of these research targets has about a 5% probability of success, so pursued one at a time ‘the wait time for the next approved Alzheimer’s drug is 260 years.’ In the current investment climate, only a handful of these targets are being investigated in clinical trials, and that still pushes off the statistical probability of a cure well beyond the lifetimes of even our children. If however, sufficient investment was somehow made possible for all the available research targets to be pursued simultaneously, regardless of potential profit, the overwhelming probability is that an effective drug would be developed and approved in the next 10 to 15 years and perhaps even sooner.
A surprising and simple solution within our reach.
A structural solution to the current financial model is needed if we are to make progress to a cure. We believe that our InvestAcure Public Benefit Corporation model offers one such solution, by enabling the millions impacted by Alzheimer’s to power clinical stage research with affordable, automated, spare change investment.
While spare change doesn’t seem like a lot, automatically rounding up one’s transactions adds up to about $50 per month on average. Twenty-six percent or 70 million adults in the U.S. alone have a relative with Alzheimer’s. If just 1.5 percent become spare change investors, that’s $600 million annually — $3 billion over five years. That would have 30X the impact of Bill Gates’ recently publicized $100 million commitment to Alzheimer’s research. At a 15 percent participation rate, the number jumps to $6 billion annually or a staggering $30 billion over five years! That’s enough for countless clinical trials and a reasonable chance for a cure.
The mechanics of the model are similar to other online investment platforms such as Stash and Acorns. InvestAcure is set up as an SEC-registered Registered Investment Advisor (RIA). Users download an app, set up an online investment account and give InvestAcure permission to purchase stock on their behalf. They then connect the credit cards they use for day-to-day transactions. Now, every time they spend money, the system automatically rounds out their transaction to the nearest dollar and deposits the spare change in their investment account. Guided by a panel of leading scientists, InvestAcure then invests those funds in companies spearheading research.
This investment is not a donation, each spare change investor would have their own online investment account and own stock in companies conducting research, as is only fair. However, because the individual investment amounts are small, they can afford to view that investment as a kind of ‘better donation’, rather than something they do to save for future financial needs. In this way we can all make an impact by directly funding clinical trials without giving away money outright and if a cure is found, well it’s only fair that those who help fund it should profit like any other investor.
By creating this large community of spare change investors, motivated by the search for a cure rather than profit, we would transition investment leadership from a narrow group of high risk investors to a much larger and stable investment base, enabling science driven investment decisions. The more clinical trials get done, the better the odds we will find a cure soon.
In the words of Dr. George Perry, a world renowned Alzheimer’s scientist and editor of the Journal of Alzheimer’s Disease, who has recently joined the InvestAcure board, ‘InvestAcure has developed a formidable financial plan to end the roadblock imposed by insufficient capital to fund clinical trials necessary to discover effective cures for Alzheimer Disease. With so many major pharmaceutical companies leaving the space, it is even more imperative that we activate this approach immediately if we are to bring cures to families.’
In today's world, love and life-saving cures are the few things left that money can’t buy. So if all it takes to speed the way to a cure is our spare change, that seems like a pretty good deal.
Max Tokarsky is the Founder & CEO of InvestAcure, a FinTech Public Benefit Corporation startup based in New York. He can be reached at mtokarsky@investacure.com
