Seattle Genetics: A case study of drug development

Compiled and written by Lara Marks, Feb 2020

Introduction

Drug discovery and development is a very complex process and full of risk. In 1993 the US Congressional Office of Technology estimated that only five out of 5,000 compounds that enter preclinical testing make it into the first stage of human testing. When tested in humans the drug may not show any efficacy or prove to be so toxic that it is not safe for human use. Attempts might be made to modify the drug to overcome its limitations, but if that is not possible, work on the drug may have to be abandoned. This makes drug discovery and development a highly risky and expensive business. On average only one of the five drugs tested in humans go on to get approved for clinical use. The entire process from preclinical testing to approval can take between 12 and 15 years.

Many drugs fall by the wayside because they prove unsafe or ineffective in clinical trials. Such trials are classified as phase I, II and III. Overall, phase I trials, directed towards assessing the safety of a drug, involve the smallest number of patients so are the least expensive to run. In many cases, however, the actual potential of a drug will only become apparent in phase II or phase III trials, which are designed to assess the efficacy of the drug. Such trials are usually far more costly than the phase I trials because they involve much larger numbers of patients who take part from multiple clinical centres.

A great deal of money can thus be invested in a drug product with little return. Just how much time and money is spent on the development of a drug varies according to the condition it is intended to address. Much of the effort is expended on research and development and clinical trials.

In this exhibition we follow the journey of Seattle Genetics, a biotechnology company that was founded in 1998 to develop cancer treatments, and examine the multiple challenges that it has faced getting drugs to market. As the exhibition shows, a company’s ability to produce a new drug is not only bound up with the progress it makes on the scientific and clinical front. It also rests on the scope it has to raise sufficient capital to support its efforts in this process. Nor does its investment stop once it has managed to get a drug licensed for the market.

Methodology

This exhibition was compiled using publicly available information and other sources. In addition to interviewing Clay Siegall, the company’s co-founder and CEO, a close examination was undertaken of the company’s Annual Reports (A/Rs), press releases and other resources provided on the company’s website. Additional information was also gathered from relevant scientific papers and newspapers.

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