Big pharma eyes Poland's new non-addictive morphine substitute

By bne IntelliNews March 19, 2007

Patricia Koza in Warsaw -

Polish scientists have developed a non-addictive substitute for morphine that could create a global market worth billions, and Western investors are lining up for a piece of the action.

Researchers developing the morphine substitute, called difalina, have just won a PLN800,000 (€205,000) grant from Poland's Science Ministry for toxicological studies that should lead to the beginning of clinical trials by the end of the year.

"At that stage, we will be looking for some venture capital," Professor Andrzej Lipkowski of the Polish Academy of Sciences' Medical Research Centre, who is heading the research, tells bne."We’ve had contacts with several VC firms which are interested in our efforts."

The morphine substitute has attracted the attention of global pharmaceutical giants as well. Aside from VC suitors, Lipkowski says, "I have been approached independently by representatives of some big Pharma [firms]."

Too addictive

The research team believes difalina could echo the success of Gensulin, a human recombinant insulin developed in Polish laboratories and marketed by the biotech firm Bioton SA. Staked with $20m in seed money a decade ago by Polish entrepreneur Ryszard Krause, Bioton has expanded rapidly via organic growth as well as takeovers in Russia, Singapore, Kazakhstan and Ukraine. On March 12, Bioton announced it had acquired Swiss biotech firm BioPartners from CSFB for 81.5m of its own shares and $15.8m in debt payments.

Bioton already has a 2% global market share of the insulin market, making inroads against the "Big Three" insulin producers – the US' Eli Lilly, Denmark's Novo Nordisk and France's Sanofi-Aventis — because while its insulin is comparable in quality, it's about 20% cheaper. The company, which has also locked up an agreement to produce Gensulin in China, is seeking to wrest a 9% market share from the global leaders by 2009.

Big pharma's deep pockets

While toxicological studies are state funded, present Polish regulations do not permit state funding for clinical trials, so the scientists developing difalina will have to look to the private sector for financing. The vehicle of choice would normally be a Polish company such as Polfa Kutno or Polfa Warszawa – Polish pharmaceutical companies which are both already involved in the production of morphine. But domestic companies lack the deep pockets that would be needed to launch and promote a product with a potentially global reach.

In fact, it is local arms of the global pharmaceutical giants – such as GlaxoSmithKline, Eli Lilly and Lek (Novartis/Sandoz) – that hold the top four or five places in terms of domestic sales. GSK, for example, has a staff of more than 1,600 in Poland and is in the process of transferring its main pharmaceutical production from the UK and France to Poznan. However, Lipinski says his suitors include neither GSK nor Lilly.

"The Polish pharmaceutical firms are mainly producing generic drugs," says Krzysztof Radojewski, an analyst at BRE Bank's brokerage. "They are not innovative, so their strength is limited."

Instead, researchers look to the example of the Croatian company Pliva, which developed a new type of antibiotic in 1980. Without the resources to market the discovery globally on its own, Pliva signed a license agreement with Pfizer giving it rights to sell the drug in Western Europe, the US and Japan. The profits from the deal gave Pliva the capital to develop into one of the regional pharmaceutical leaders.

Difalina could be a useful treatment in the last stages of cancer or in severe accidents, where the patients are able to live longer but are undergoing excruciating pain and may be considering seeking euthanasia. The goal is not to replace use of morphine, which is initially effective for treating pain and is relatively cheap, but to supplant it when it is no longer effective.

"We believe our compound will work in cases where morphine doesn't work any more," Lipkowski says. "We want to fill this gap, to provide another powerful tool to treat pain."

While the main goal is to improve patients' lives, the researchers are not unaware of the potential financial impact. The global morphine market is estimated to be worth about $1bn annually; the market for fentamyl, the most common substitute for morphine, is worth another $1bn. Lipkowski believes the market for difalina could be even larger.

First, it has none of the highly addictive properties of morphine or fenatyl. Animal tests also show difalina is tolerated for a long time, unlike morphine. And contrary to the case with morphine, doses would not have to be continually increased.

The Polish Pharmacological Institute in Warsaw, a state-owned R&D facility, is willing to produce difalina. Research suggests it would have to produce about 500 kilograms of the substance to cover global demand. The facility has the capacity to produce over 10 tonnes of medical substances and could easily launch into full production once the substance is cleared for commercial use, which is expected within five years.

"I am sure we will be able to finish everything much earlier than five years," Lipkowski says.

Send comments to Patricia Koza

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