Introduction  

Canadian Forest Service links

Bringing ‘blue sky biology’ down to Earth: Linking natural products research with commercialization

Stewart Cameron and Ron Smith
Canadian Forest Service - AFC, Fredericton, New Brunswick

S.I. Cameron, and R.F. Smith 2002. Bringing ‘Blue Sky Biology’ Down to Earth: Linking Natural Products Research with Commercialization. pp 31-39 In Proc. 29th Annual Meeting of the Plant Growth Regulation Society of America, July 28-Aug 1, 2002,Halifax N.S. 202p.

PGRSA, 2002

The Phytomedicinal Resource is Extensive

• There are over 35,000 species of plants used for medicinal purposes worldwide.
• Two questions:
  • Which of the many plants or bioactive compounds are realistic candidates for R&D directed at commercialization?
  • Having a selected a candidate, what additional market-related factors should be considered? 

World Demand for Taxanes

Current World Demand

• 300-400 kg/year of Taxol and Taxotere in North America and Europe
• Demand is growing at 10% per year
• Perhaps 800-1000 kg worldwide in 10 years

What is ‘Taxol’® (paclitaxel) ?

• a terpene found in all parts of ground hemlock
• the BMS tradename for a compound called paclitaxel
  a close chemical relative of Taxotere®, a European version of Taxol
• treatment for ovarian, breast, lung cancers, plus other diseases and applications added each year
  

 The Case for a Commercial T. canadensis Crop

• Taxol® and Taxotere® are well established drugs
• sales of $2.3 billion USD in 2001
• generic paclitaxel has come to market
• 10% annual growth for the next decade
• woodland sources are getting scarcer
• inadequate horticultural nursery supply
  

Theme: the value of commercial market knowledge

• Some observations, based on experience in the T. canadensis domestication project on:
• critical bioproduct market factors, and
• the industrial collaborator ’s suitablity

History of the Taxus project

• started in 1996/97
• goal: make T. canadensis into a nursery crop
• interest by a number of companies, large and small
• a number of failures to successfully collaborate
• failure to craft a strategy for product sales
  

What are the critical market factors?

• Commercial aspects of the product niche the R&D partner should know
• Homework done even before contact is made with a prospective industrial collaborator
• Example: current bioproduct sales (300+ kg of Taxol/year)
• Example: expected bioproduct lifespan; paclitaxel vs. echinacea
  

Market factor questions

Can the same species be harvested and the crude product extracted more cheaply elsewhere in the world?

• Often a wide species distribution
• Species already in short supply cultivated elsewhere
• Example: American ginseng
• Paclitaxel: subject to both biological and commercial restraints

Does a different genus/species with the same bioproduct, perhaps in higher abundance exist elsewhere?

• The same phytochemical may exist in very different species
• Cultivation elsewhere more economically feasible
• Example: Camptotheca and Nothopodytes
• Paclitaxel: common to all Taxus species but T. canadensis has unique advantages

 

Can an identical, easily synthesized compound be commercially produced more economically?

• Two extremes: single compounds vs. phytochemical mixtures
  example: ASA vs. salicylates
• Example: echinacea
• Paclitaxel: no easy synthesis or commercial bioreactor production

Is commercialization likely to be limited by patents?

• A patent search produces valuable information: company names and their niche
• Products of interest to them
• Over 1800 patents on Taxus processing and paclitaxel
• Example: patents determine use of paclitaxel only vs. use of both paclitaxel and 9-DHB for semi-synthesis
  

The industrial collaborator’s suitability

• The R&D partner and the industrial collaborator are each other’s customer and ‘the customer is always right’
• Critical to have the right fit to each other and to the market
• The R&D partner needs to know as much about the industrial collaborator’s business as the collaborator knows about the proposed R&D
• An NDA: exchange valuable market data
  

The collaborator’s suitability

Does the company proposing to fund the R&D have adequate knowledge of the market for the bioproduct sales?

• Their information varies: news reports and newspaper articles to detailed, proprietary industry knowledge
• Reasons for R&D investment differ: diversification to known amounts of bioproducts
• Bottom line: a business plan showing profitability or a competitive edge from R&D

Does the company have the size and capacity to sustain the proposed R&D fundings?

• Start-up companies: possible cash flow problems, dependent on other ‘deals’
• R&D partner should read the business plan to see where/if financial bottlenecks exist
• Large companies: different problems; may wish to take the R&D elsewhere once developed

Does the industrial collaborator intend to market raw biomass or process it into a value-added product?

• Government R&D perspective: generating high quality employment
• Cheaper processing elsewhere may not be a good fit to government R&D
• Can complicate their biomass acquisition strategy due to legal restrictions on raw biomass export
  

What impact will the collaborator’s entry into the market have on the wild resource?

• Government mandate: to promote sustainable use of resources, prevent overharvesting
• Development by CFS and others of sustainability guidelines for T. canadensis
• CFS would be indirect conflict with a partner unwilling to follow harvest guidelines

How does the industrial collaborator propose to handle exclusivity and IP?

• Exclusivity: CFS owns all IP done prior to the collaborative agreement (the 1300 clones); funded IP is jointly owned.
• Collaborator has exclusive right to commercialize, subject to restrictions
• No export of the R&D (elite clones or technology out of Canada without prior government permission

Conclusion: the economics of domestication and cultivation

• Demand: harvest limits are estimated at 5-6 MM kg fresh wt./year, enough for 150-170 kg of paclitaxel
• Biomass needs of just two pharma supply companies would exceed total supply: no room for future market expansion
• Biomass is in short supply elsewhere BUT
• Canadian biomass is expensive compared to Asian sources