http://www.forbes.com/home/2003/06/24/cx_mh_0624velapharm.html

Pharmaceuticals
Drug Industry Discovers Recycling
Matthew Herper, 06.24.03, 8:05 AM ET

NEW YORK - Drug companies often seem to trip over themselves looking for brand new medicines. But most drugs that begin clinical trials never make it to market. Meanwhile, an entire pharmacopoeia of medicines have gone off patent and fallen out of use. Instead of focusing on new drugs, why not look for new uses for old ones?

Several small pharmaceutical companies are making a business of doing exactly that, scouring already tested medicines for products that might be put to new use, or tweaked slightly to make new drugs. The idea itself is not new--using existing molecules as a template is a hallmark of drug development. Pfizer's (nyse: PFE - news - people ) arthritis drug Celebrex, which had 2002 sales of $3 billion, was designed starting with an existing molecule. So was a promising drug being tested by Alpharetta, Ga.-based Atherogenics (nasdaq: AGIX - news - people ) to treat heart disease. But what is new is that companies are focusing entirely on rediscovery.

"One doesn't know, but with our business model one feels that at least you have a decent shot on goal," says Jeff Calcagno, a medical doctor who now serves as chief financial officer of Vela Pharmaceuticals. The privately-held firm, based in Lawrenceville, N.J., just received clearance from the U.S. Food and Drug Administration to move ahead with mid-stage tests of R-tofisapam, a form of an anti-anxiety medicine related to Valium, in irritable bowel syndrome. After these trials are done, the company hopes to sign up a big pharma partner.

VelaPharm Chief Executive Kevin L. Keim remembers seeing the tofisapam molecule, which was approved as a niche anxiety drug in 15 countries but never became a big seller, when he worked at Roche, alongside Valium inventor Leo Sternbach. At the time, it was thought that the pill must not be fast-acting, because in doses as high as 1200 milligrams, it appeared to be non-sedating, Keim remembers.

More than a decade later, at VelaPharm, he and his colleagues took another look at the molecule. Like many drugs, tofisapam is a combination of left-handed and right-handed versions of the same molecular chain. The VelaPharm scientists found that one version, R-tofisapam, seemed to work in animal models of irritable bowel syndrome. Not only is it non-sedating, but a 200-milligram dose is being tested for both men and women. Current irritable bowel drugs, like Novartis' (nyse: NVS - news - people ) Zelnorm and GlaxoSmithKline's (nyse: GSK - news - people ) Lotronex, are approve only for use in women.

An approach like this can be quite lucrative. On June 12, Chapel Hill, NC-based Pozen (nasdaq: POZN - news - people ) landed a deal with Glaxo that could eventually be worth $160 million in milestone payments, plus a royalty. Pozen figured out that the effectiveness of Glaxo's anti-migraine treatment Imitrex might be increased if naproxen, the active ingredient in the painkiller Aleve, were added to it. Since both drugs are already known to be safe, the risks of failure are relatively low. By selling a combination pill, Glaxo might wind up with a new product that is bigger than Imitrex, which currently has annual sales of $1.2 billion.

"The trick is to figure out which compounds are synergistic," says John Plachetka, Pozen's chairman and chief executive. "Most biotech companies fail because the biology they are working on is of unknown relation to a disease."

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