After David Hung sold his medical device company in 2001, the biotech entrepreneur was looking for the next big thing. He set his sights on new technology he could build a company around. His search led him to a member of the Russian National Academy of Sciences who had come upon a potentially powerful drug to treat Alzheimer's disease.

Unlike available drugs, the treatment showed evidence of improving memory and cognition in patients with the disease rather than just slowing its progression. Dimebon, was not a new chemical entity, though. It had been sold over the counter in Russia for more than 20 years. But there, its scope had been more modest, taming the sniffles and other symptoms associated with allergies.

The quest for better Alzheimer's drugs has been keeping researchers busy. The five existing FDA-approved drugs for Alzheimer's disease inhibit either the cholinesterase or NMDA receptor in the brain, both of which are involved in impairment relating to the disease. No marketed drug is known to have an effect on both pathways.

Dimebon not only inhibits both of the pathways, but also acts on a newly implicated target in Alzheimer's known as mitochondrial pores. This new target is believed to be involved in cell death in this and other neurodegenerative diseases.

By the end of 2008, Hung expects Medivation to file for regulatory approval to sell the drug in the United States to compete in the $3 billion market for Alzheimer's drugs.

The concept of using old drugs to treat new problems is attractive for several reasons. It can take some 10 years and $1 billion to bring a new drug to market. Meantime, Hung's Medivation has spent less than $25 million to advance Dimebon to a late-stage clinical trial as well as an early-stage trial in Huntington's disease. All this has taken less than three years since its founding in 2005. No wonder that many entrepreneurs and venture investors are finding companies such as Medivation compelling.

Some skeptics, however, might question whether taking an over-the-counter antihistamine from Russia that's no longer sold and finding a new use for is innovative. For his part, Hung thinks it doesn't matter if it's old or new. "All that matters is whether you have a new therapy for an unmet need," the Medivation CEO said.

A Repurposeful Life

Repurposing drugs is not new idea -- the infamous morning-sickness drug thalidomide, which caused disastrous birth defects in the late 1950s -- is now sold by Summit, New Jersey-based Celgene under the brand name Thalomid to treat multiple myeloma, a cancer of the white blood cells. It's close to a $400-million-a-year product for the company. But a growing number of companies are being created around the idea of repurposing off-patent drugs as a faster, cheaper way to bring products with big market potential to market.

Scale Venture Partners in Foster City, California, has invested in several companies that are pursuing new uses for old drugs. The high cost of drug development and a rising hurdle bar for safety has managing director Lou Bock looking for companies that are chasing large market opportunities. But what's key is these companies are also all looking for ways to cut clinical trial costs, risks and delays associated with late-stage development.

Consider Scale's investment in San Diego-based Somaxon, which has found that the drug doxepin given at low doses is an effective sleeping pill. For more than 20 years, Doxepin has been used in high doses as an antidepressant. The company has completed clinical trials and will file for regulatory approval in the next several months.

There's a big market for such companies. Insomnia drug sales in the U.S. exceed $3 billion. To reach its current position, Somaxon has spent less than $100 million. That's a modest sum compared to what some outfits spend to develop new drugs. Indeed, Companies repurposing drugs in general spend between one-fifth and one-tenth of what companies developing new molecular entities must spend to reach the market, Bock estimates.

"The venture model in biotech has become so capital intensive that you need to find more efficient, innovative ways for drug development," said Bock. "The returns have started to get squeezed. You need to find strategies that take costs out of the equation but still target sizable market opportunities."

Thinking Differently

Palo Alto, California-based Horizon Therapeutics is another company going after these opportunities. The outfit was born out of safety concerns surrounding Vioxx and other Cox-2 inhibitors. Horizon's founders George Tidmarsh and Barry Golombik had the idea of combining ibuprofen with the ulcer medication famotidine, marketed under such names as Pepcid, to offer a safe and effective alternative to the drugs that make up the $10-billion market for pain medications.

"It's all about speed and minimizing time, risk and costs," said Tidmarsh, who notes that the company has raised just $21 million and has its billion-dollar drug candidate in late-stage clinical trials.

Ibuprofen and other non-steroidal anti-inflammatory drugs or NASIDS are effective at treating pain, but they can wreak havoc on the gastrointestinal system. An estimated 16,500 related deaths and 100,000 hospitalizations occur each year in the United States from GI complications from these drugs.

What Horizon did was formulate famotidine at a thrice-daily dose and show it was actually more effective than its normal regimen. Usually, Famotidine is prescribed for twice a day ingestion and Ibuprofen three times a day. Famotidine has been shown to prevent ulcers caused by NSAIDs.

One challenge Horizon faced was getting ibuprofen and famotidine to co-exist in the same pill. Ibuprofen's acidity destabilized famotidine and the company had to figure out a way to combine the two into single pill. Such improvements not only make the combined drug possible, but also make it easier to win patent protection patent provide a basis for patent protection. Horizon is also pursuing combinations of other pain medications with famotidine.

Tidmarsh thinks for many pharmaceutical companies its simply a lack of imagination. He thinks the industry has focused too much on the need to have new chemical entities in order to win patent protection and not enough about creative patent strategies, new formulations, new combinations and new uses of existing drugs.

"Traditionally, this industry thinks too narrowly about innovation," he said. "The belief is that innovation has to come from synthesizing a new chemical entity or finding a new pathway. That's not always the case. Several times a year we find a new use for aspirin, which is the oldest pharmaceutical compound there is. That just speaks to the fact that we haven't really fully investigated everything we have in front of us."

But innovation of some sort -- enough to justify a patent -- will be a critical concern for these companies and the bar to achieve that appears to have just been raised. A recent Supreme Court ruling will likely make it harder for companies repurposing drugs to win the patent protections they will need to raise money and build a viable business. That means they may not only be pressed for clinical innovation, but now legal innovation as well.