1. Evaluation of Squalestatin 1 as an Enzyme Inhibitor for Lowering Cholesterol
Presented by Sam Noor-Mohammadi Daniel Feze April 28, 2008 Advanced Process Design

2. Reversal of Medication Labels

3. Agenda Problem Statement Background Drug Model Production Economics
FDA
Manufacturing
Economics
Demand Model-Price Model
Conclusions

4. Problem Statement
This work evaluates the economic potential of a new enzyme inhibitor for lowering cholesterol levels in human plasma. We looked into
FDA Process
Manufacturing and Production
Economics and Pricing of the Drug

5. Cholesterol
Produced by liver cells and acquired through diet and natural production
Three major types:
High density lipoprotein (HDL) “good cholesterol”
Low density lipoprotein (LDL) “bad cholesterol”
Triglycerides
Important in transfer of blood constituents (ex. lipids)
Important in cell survival

6. Formation of Plaques Formation of Plaques in the Arteries
LDL are retained by artery walls while moving the cholesterol from liver to peripheral tissue. This accumulation is responsible for the hardening of the arteries

7. Health Facts High Cholesterol Leads to Heart Disease
29% of Heart Disease Related Deaths in the U.S Each Year
17.5% of People Over 20 Years of Age are at Risk for Heart Disease and Stroke

8. Health Facts Good Serum Cholesterol Level is 199 mg/mL
In , 16% of American Adults had Levels Over 240 mg/mL
For Women Over 60 Years this Level was Higher than Men
For Women and Men Years the Same Levels Were Observed

9. Solutions to Lowering Cholesterol
Low Fat Food, Exercise
Herbal and Nutritional Solutions
Statin Drugs
Vitoryn
Zocor
Zetia
Lipitor
Pravachol

10. Statin Drugs Ranges From 10-80 mg/day
High Dosage are Given to Patients with High LDL Levels and Serum Cholesterol Levels
Drug
Dosage (mg/day)
Percent Reduced
Lipitor
10 to 20
30%-45%
Mevacor 40
Pravachol
Crestor 10
Zocor
20 to 40

11. How Statins Work How it Works:
By inhibiting HMG-CoA in the Biosynthesis of Cholesterol Production
Main Enzyme in Producing Cholesterol

12. Side Effects of Statins
Common Side effects in most of the cholesterol lowering drugs
Head pain
Dizziness
Rash
Throwing up
Some dissolve in fat and reach barriers of brain cell membrane
Insomnia

13. Other Problems with Statins
Interfere with the Biosynthesis of Coenzyme Q10
CoQ10 is
Vitamin like, Fat-Soluble Antioxidant
High Concentrations in Vital Organs like Heart
Important in Energy Production
Statins lower cholesterol in plasma and also CoAQ10 (Passi, 2003)

14. New Drug Squalestatin 1 Selective Inhibitor of Squalene Synthase
Key Enzyme in Cholesterol Biosynthesis
Because statins have high side effects, and lower efficacy when smaller doses are taken, a new solution that would lower the level but by using lower dosage and has lower side effects is very desirable.

15. New Drug SQ1 will be used to lower serum cholesterol level
By Controlling the Flux of Cholesterol Biosynthesis
Squalestatin 1
Farnesyl Pyrophosphatase

16. New Drug SQ1 Inhibits Squalene Synthase
Lowers the Production of Cholesterol

17. How Dosage is Determined
Inhibition dependant of daily
production of squalene synthase (13.4 nmoles per day)
squalestatin binds to squalene synthase to form complex
Number Molecules Squalestatin = Number Molecules of Squalene Synthase
Feze

18. Dosage
10 to 20 mg daily doses for 40 to 60% inhibition
Feze

19. Dosage and Percent Reduction
Drug
Dosage(mg/day)
% Reduced
SQ1 20
60%
Statins 40

20. Squalestatin Pathway Hepatic and Renal Elimination
This is statins? Not squalestatins
Feze

21. Renal Clearance Passive diffusion across glomerulus
Fick’s law application
P= permeability size dependant
A= kidney filtration area (516 cm2)
C= squalestatin concentration in the plasma and kidney
Feze

22. Squalestatin 1 Clearance

23. Side Effects Side Effects:
Have not been tested but it can be assumed lower side effects than other cholesterol lowering drugs because of its inhibition of a different enzyme.

24. Toxicology Evaluation
Higher Clearance than Atorvastatins
Lower doses 10 to 20 mg Vs 20 to 40mg
Higher diffusions coefficient in the kidneys (shorter half life ) 8 hours Vs 14 hours

25. Toxicology Evaluation
No Ubiquinone metabolism related side effects (43 % of severe side effect)
Myalgia : muscle ache and weakness = 24%
Arthralgia joint pain =19%
Asthenia overall body weakness

26. Production Plan
FDA process
Manufacturing

27. FDA Approval Process Pre –FDA: Test tubes and mammalians testing
Phase I: Safety test on small number of patients
Phase II: Efficacy Test on Familial Hypercholesterolemia patients
Phase III: Safety and efficacy tests on subjects with special conditions
Hundreds to thousands of patients are volunteered for this phase.
Last and most determining phase

28. Pre-FDA More tests = better rate of success through FDA
Too many tests= waste of time and money

29. Pre-FDA Decision Tree 1 PhD, 8 labs Technicians PRE-FDA
Option A, 28 Weeks $162,000
2 PhD, 12 labs Technicians
1 PhD, 12 labs Technicians
Option B, 31 Weeks $179,000
Option A, 21 Weeks $162,000
Option B, 21 Weeks $162,000
Option A, 24 Weeks $185,000
Option B, 28 Weeks $215,000
Fix this one, try out everything in the middle

30. FDA Flow Chart (Phase I)
1year, 1.22millions, 70 subjects
.1% % %
No Antibody Stimulation
Phase I
Drug is Safe
Adverse Side Effects
Clinical Hold Up Back to R&D 30

31. Clinical Hold Up back to R&D
Flow Chart (Phase II)
2 years, $5.2 millions ,200 subjects
1.1% % % %
Phase II
Severe Side Effects
Minor Side Effects
Drug is Ineffective
Drug is Safe and
effective
Clinical Hold Up back to R&D

32. FDA Flow Chart (Phase III)
900 patients, $61.8 millions,6 years
0.50% % %
Phase III
Unexpected Side Effect
Drug is Ineffective
Booster to increase Titer
Drug is safe and effective
Biologics License Application
Pre-approval
Facility inspection
Advisory Committee
Clinical Hold Up
Drug is not Safe
Drug is Safe

33. FDA Summary Cost ($) In Millions Length Participants Phase I 1.22
Cost ($)
In Millions
Length
Participants
Phase I
1.22
1 year 70
Phase II
5.2
2 years
200
Phase III
61.8
6 years
900

34. FDA Summary The chances of passing are estimated at 69%
The total cost is $69.3 millions for 10 years
31% Risk of failing FDA approval for a total loss of $138 millions

35. Manufacturing Process Calcium Salt Extraction

36. Squalestatin Extraction

37. Fermenter Scale Up H/D ratio
Volumetric oxygen transfer coefficient (Kla)
Power consumption volume
Impeller tip velocity

38. Fermenter Scale-Up H/D ratio
The most important factor in fermenter geometric design
Advantages:
bubble residence time increase
top sparger air pressure is higher (higher O2 dissolution)
Volume of air required decrease with constant SLV 38

39. Fermentor Scale-Up Air impelled fermenter
Considerable mixing energy savings.
Greater Kla value
Greater sparger pressure

40. Column Chromatography scale-up
Pressure drop across each column (Darcy equation)
L= column height , ∆P= pressure drop across the column ,
µ = viscosity of the mobile phase, ν= superficial velocity
K= constant, p= resin particle diameter, ε = void fraction,
Column size
V1,Q1 = pilot plant column volume and flow rate
V2,Q2 = scaled up column volume and flow rate

41. Economics
Price of the Drug
Demand Model
Production
Manufacturing

42. Demand Model Assumptions
Number of People Who Need a Type of Cholesterol Lowering Drug
8,000,000
800,000 Patients will Switch from the Highest Selling and the lowest Priced Statin Drug to this New Medication

43. Demand Model Assumptions Cond.
Assume Percent Prescribed
10mg is prescribed 50%
20 mg is prescribed 25%
40 mg is prescribed 15%
80 mg is prescribed 10%
Prescriptions are Renewed Every Year

44. Demand Model Equation  Awareness Function
Function of time, advertising and professional education
=0, No knowledge
=1, Perfect Knowledge
d1; Demand for the New Product
; Market Demand
Assumed 0.78
Y; Consumer Budget
P1 and P2 ; New and Old Product Price
Alpha was varied when only the patients were taken into account as the customers and alpha was constant for only the doctors and health care professionals

45. Demand Model ; Consumer Satisfaction, Ratio of Old to New =H2/H1
H; Consumer Satisfaction Function
 Wi yi
y; Consumer Related Property
Effectiveness; % serum cholesterol reduction
Side effects; Related to Plasma Concentration of Drug
W; Product Weight
the consumer maximizes satisfaction by having constraints on the amount spent on the drug. P1d1+p2d2<=Y

46. Effectiveness
Efficacy is the measure of the effectiveness of the drug in reducing the life threatening condition a patient is suffering from.

47. Effectiveness

48. Effectiveness Reduction in % Serum Cholesterol Level
Lower=Higher Satisfaction
By Measuring the Level in Blood

49. Side Effects Assumed that 50% of Prescriptions are for 10 mg/day
No or Very Low Side Effects
Less Important than the Efficacy of the Drug
Based on a Doctor's Recommendation and Opinion

50. Beta Factor Beta Weight Y1 Y2 Efficacy 0.95 1.26 0.74 Side effects
0.05
0.5
H= (weight*y)
1.22
0.73 
0.6

51. Alpha Factor
Data taken from a previous study

52. Demand Model
Different Scenarios, compared to other drugs,

53. Demand Model
Price of the drug goes up, demand goes up

54. Price of the Drug Price of the New Drug
$1.33 or $1.70 for 10 mg/day (one tablet)
Demand model was solved for this range of values
Demand below $1.33 did not make sense

55. Business Economics Equipment Prices

56. Business Economics Raw Material
Suggested Factor
Quantity Per year
Cost Per Unit
Value ($/year)
Water (Process)
$/Kg
70,339,560
0.53/1000
$37,280
Glycerol Kg
28,136
0.6
$16,881
Cotton Seed Flour
2,432 1
$2,432
Soybean Oil
84,407
2.5
$211,019
Actetonitrile
17,993,088
1.39
$25,010,392
Sulfuric acid
71,962
0.07
$5,037
Ammonium sulfate
450,944
0.08
$36,037
Resin
liters
236
200
$47,124
Calcium acetate
172,486
179
$30,875,010
Phoma sp.
270,037
219
$59,138,059
Total
$115,379,310 56

57. $271,041,780 Production Cost Suggested Factor Amount Per Year
Price Per year
Operating Labor
25.58$/h
$181,618
Operating Supervision
0.15
$27,243
Electricity
0.045$/kWh
$18,696
Fuel
1.26$/GJ
Steam
4.2$/1000kg
424 Kg $2
Maintenance
0.07
$4,691,327
Operating Supplies
$703,699
Laboratory Charges
$105,055
Utilities
$5,594,778
Manufacturing Costs
$121,107,449
Taxes
0.02
$1,340,379
Financing
Insurance
0.01
$670,190
Rent
Depreciation
$3,015,853
Fixed Charges w/o Depreciation
$5,026,422
Plant Overhead Costs
0.6
$144,907,909
Administrative Costs
Included Above
Distribution and Marketing
Research and Development
General Expenses
Total Product Cost w/o depreciation
$271,041,780

58. FCI/TCI FDA-Fixed One Time Cost $69,000,000 Fixed Capital Investment
$76,018,956.73
Working Capital
$1,239,458.63
Total Capital Investment
$77,258,415.36 58

59. NPV
NPV ($1.33) = $13,912,008,251
Based on NPV value and Demand Analysis, $1.33 and $1.70 are Best prices for SQ1
Projected is accepted because it is positive; 1 is the $1.33 and 2 is the $1.7

60. Risk Analysis
The Risk of the Project Determined from NPV and Demand Graphs
When the price is kept at 1.33 and the annual product cost changes over 20 years
Assumed probabilities, based on the demand graph and the NPV versus time graph. Highest demand will in the years 4-14th of the project.

61. Conclusion High Cholesterol is a Growing Epidemic in the U.S.
20 mg/day of SQ1 will Reduce the Serum Cholesterol Level by 60%
Higher Efficacy
Lower Side Effects
Demand for this Price of Drug is Close to 800,000 Patients
Best Price to a Corresponding High Demand and NPV of the Project is $1.33 for 10 mg/day

62. References
Baxter A., Fitzgerald B.J., Huston J.L., McCarthy A.D, Motteram J. M., Ross B. C., Sapra M., Snowden M.A., Watson N.S., Williams R.J., and Wright C., Squalestatin 1, a Potent Inhibitor of Squalene Sunthase, Which Lowers Serum Cholesterol in vivo, The journal of biological chemistry, Vol. 267, No. 17, Issue of June 15, pp , 1992
Harl C. Erica, Martin Melissa, Financial and Technological Risk Analysis for the Development of New Drug, May 5, 2006

63. Questions?