This is our interview with Charles Theuer which was recorded for the Solutions OP Clinical Trials podcast. You can listen to the original recording here. Please note that the interview below is adapted and not a transcript. This was done to improve readability.
Interviewer: Welcome to today’s episode of the podcast. I have a special guest with me today, joining from sunny California. He’s a professional with extensive knowledge and experience in drug development. His name is Charles Theuer, and he’s a surgeon by training, specialising in colorectal cancer. Before transitioning into drug development, Charles spent many years as a researcher. Eventually, he decided to dedicate more time to the field of drug development and became an entrepreneur.
Charles is also the author of a couple of books, which we’ll touch on during our conversation. I have many questions for him; this is something I mentioned when I first contacted him. But today, we’ll focus on oncology drug development and the current situation.
The topic of discussion today is oncology drug development: the current state and what we can expect in the future. I think it will be a very interesting topic for many of our listeners.
My first question is: We’ve been seeing a decline in the number of oncology clinical trials recently. Do you think this trend will continue? From your perspective and expertise, what are the most exciting areas of treatment for investors at the moment?
Charles: Thanks, Olga, for inviting me. It’s a real pleasure to be here.
In general, I’d say that as pharma companies face tighter budgets, they’re becoming more focused on risk and return on investment. When they evaluate the likelihood of success across different therapeutic areas, they often see oncology as one of the riskiest.
For example, when developing a new oncology drug and moving it into clinical trials through an IND (Investigational New Drug) application, the chance of that drug ultimately receiving approval is about 1 in 20, which is one of the lowest success rates across all therapeutic areas.
Another example, haematology has a much higher success rate, around 40%. Autoimmune diseases also fare better, with approval rates 3 to 4 times higher than in oncology. So, when budgets are tight and companies need to focus on maximising return on investment, it’s not surprising that some are shifting away from oncology.
Another factor is what I call the “me-too” effect. In drug development, when a new mechanism of action is validated, everyone rushes in to be part of the story. They want a slice of that initial success. Take PD-1 inhibitors, for example, OPDIVO was approved in 2014, followed soon by Keytruda. After that, nearly every pharma company wanted to develop a PD-1 drug to claim a share of the market.
Right now, however, there isn’t a breakthrough mechanism of action in oncology that everyone is jumping on. This lack of a new validated target has reset expectations and may explain the slowdown in oncology trials.
Once a new and promising mechanism of action is validated, the perceived risk drops significantly, and companies are much more willing to invest. So, unless or until we see that next breakthrough, I think we’ll continue to see a more cautious approach to oncology trials compared to other therapeutic areas.
Interviewer: That’s very interesting, Charles. In fact, what you said really aligns with what I’ve been seeing as well. We’ve done some research on different companies, and there’s a clear trend: late-stage companies tend to focus on the same few indications, while early-stage companies are the ones bringing in new ideas and more diverse, exciting portfolios.
But as these early-stage companies progress to the later stages, things seem to converge. They end up working on the same targets or indications as everyone else. In a way, I don’t find it very optimistic, to be honest. You don’t want everyone focusing on the same area.
So, what’s your outlook for the future of oncology clinical trials? Which treatment areas do you think are worth investing in, and why do you see them as critical for the field of oncology?
Charles: Yes, I just came back from ASCO in June, and it’s clear that one of the mechanisms of action now gaining dominance in oncology drug development is antibody-drug conjugates, or ADCs. This is an exciting new area; not only are ADCs being developed for new cancer types, but they’re also being designed to potentially replace current standards of care.
For example, in frontline breast cancer treatment, the current standard for HER2-positive patients involves anti-HER2 antibodies combined with chemotherapy. Now, there’s an ongoing trial comparing that standard to a new approach using an ADC targeting HER2, combined with another antibody to establish a new treatment standard.
So, I think we’ll continue to see ADCs grow in popularity as a class of oncology therapies. Not only will we see entirely new ADCs, but I also expect to see ADCs targeting known biomarkers begin to replace the primary antibodies or naked antibodies that previously defined the standard of care.
Interviewer: During COVID, RNA-based therapies became extremely popular. Do you think RNA still has a future in cancer drug development, or do you see it more as something that fits better in virology rather than oncology? What’s your feeling?
Charles: That’s a great question. So, the mRNA platform delivered via lipid nanoparticles, as you pointed out is the primary mechanism behind the COVID vaccines and is definitely being applied in oncology.
BioNTech, the company that developed one of the primary cancer vaccines, has partnered with Pfizer to fully develop the programme. The company is interested in oncology and is applying some of the same ideas that it uses to make viral-based vaccines.
Instead of providing an antibody-based therapy directly, RNA-based vaccines for viral diseases use the body’s machinery to deliver RNA, which then prompts the body to produce the antibody or therapeutic directly from the RNA.
It’s still early, Olga, so we’ll have to see how it goes. In my view, I’d say the more advanced therapies on the near horizon are in the antibodies, especially the ADC category.
The lipid nanoparticles are definitely out there; oncology could potentially be an application, but also other therapeutic areas. People often discuss them as a foundation for new therapies.
Interviewer: Another thing I noticed when researching late-stage companies is that most are focusing on the main oncology indications, such as colorectal cancer, breast cancer, and lung cancer, which is also very popular.
So, where do we go with the rare cancers then? Do you think there will be more interest from companies in the future to invest in rare cancers, or will the focus continue to be on the mainstream cancers?
Charles: Yeah, I think that’s a big question, and it’s becoming increasingly challenging to invest in rare cancers.
There are still clear regulatory advantages, such as orphan drug designation, which provides benefits like 7 years of market exclusivity after market authorisation.
The problem is that when rare drugs are approved for rare diseases, whether cancer-related or not, like in the case of muscular dystrophy, the price points are so high.
The real question is whether healthcare systems can sustain these incredibly high price points. If they can’t sustain it, the companies will come under pressure, and we’re already seeing that pressure to focus on larger tumours like lung cancer. The prevalence and incidence of this disease are 200,000 cases a year in the US alone, and much higher globally.
Getting a drug approved for a high-prevalence cancer, even a specific subtype, gives companies access to a large patient population and significant revenue.
If it’s a rare cancer, then the only way to potentially generate a return on investment is to have a very high price point. I think there will be a lot more pushback from payers around price points, and I think pharma companies are very sensitive to that. So, I think there will be more and more pressure.
Moving away from rarer tumours, the exception would be if you had an incredibly precise medicine that clearly addressed the tumour, such as the drug Gleevec. This drug has been used to treat chronic myeloid leukaemia, turning it into a chronic disease with incredibly high efficacy rates, and patients can stay on it for almost their entire lives. In such cases, even though the patient population is small, the fact that patients are chronically dosed means there’s enough revenue to justify investment.
Rare tumours where you have a highly effective therapy that potentially demands lifelong treatment are still a focal point, but I think you have to be highly effective in that area for a pharmaceutical company to consider it worth the return on investment for the capital needed to approve the drug.
Interviewer: What do you think about CAR-T therapy? I saw that the FDA is making some changes that will allow non-certified hospitals to use CAR-T therapies. Do you think this will encourage more companies to work in this field?
Charles: Yeah, I think cell therapy is really becoming more mainstream.
I attended the ASH meeting last year, the American Society of Haematology. I was really impressed by how much more comfortable haematologists are becoming with CAR-T therapies.
I believe that when they were first approved, like any new therapy, people were a bit hesitant to use it due to an exaggerated focus on the side effects. But CAR-T therapies have now been shown in clinical trials can prolong survival. And once a therapy demonstrates a clear survival benefit compared to more traditional treatments, it tends to gain acceptance.
I’ve been impressed to see that CAR-T is now viewed as a mainstream option. It’s being used more frequently, and people are much more comfortable with it.
The same trend seems to be happening with bispecific antibodies in haematology. And by bispecific, I mean not just targeting two pathways at once, but antibodies that can actively engage T cells to attack tumour cells. Haematologists are becoming more confident using these bispecific antibody therapies alongside CAR-T.
So, when new treatments show clear benefits and have a favourable risk-benefit profile, they’re being increasingly adopted—not just by haematologists, but by physicians in general.
Interviewer: What do you think about gene therapy? Right now, there are quite a few gene therapies being developed for Duchenne muscular dystrophy and other conditions, mostly outside of oncology.
Do you think there’s potential for gene therapy to be successful in oncology treatment?
Charles: I would say overall, gene therapy is in a tough space right now. We’ve seen that the market capitalisations of many gene therapy companies have suffered.
You mentioned muscular dystrophy. Sarepta has an approved gene therapy for that indication, but recently, there have been serious safety concerns, including patient deaths related to treatment. That’s had a major impact not only on the company itself but on the entire field of gene therapy.
The challenge is that gene therapy is still considered cutting-edge; it hasn’t yet become mainstream. So, when one company reports negative data, especially related to safety, it really affects the whole therapeutic class in a very negative way.
I think that capitalised gene therapy companies conducting current trials will be able to deliver the data, and those data will determine the success or failure of the company. But companies that still need to raise capital to move into the next phase of development will likely struggle.
I think the recent Sarepta data is part of that cloud, a cloud over the entire therapeutic area, so it’s going to be very difficult for gene therapy, whether it’s oncology or non-oncology, to make an impact right now. That’s one of the areas I think that’s probably the most challenging in recent years.
Interviewer: I see. And what’s your opinion on radiotherapeutics? It’s another really interesting field. There are quite a few companies, mostly large ones, that seem eager to work in this space. I think that’s partly because the logistics are quite complex; it seems like it could be a bit of a nightmare to manage. But do you think radiotherapeutics has a future in oncology?
Charles: I think radiotherapeutics has a very promising future in oncology.
It’s an interesting story. I used to work at IDEC, the company that developed and got approval for the first radioimmunotherapy—Zevalin. It targeted CD20 and combined a radioactive isotope with an antibody.
The main challenge Zevalin faced was that it had to compete with Rituxan, another CD20-targeted therapy that became incredibly successful. Zevalin never gained the same traction, and as a result, it wasn’t a commercial success. That approval was over 20 years ago.
Like many things in oncology, sometimes there’s a seminal approval that the world isn’t quite ready for. Kind of languishes for say a decade, and then people realise this actually is an important therapeutic class, and I think that’s what’s happened with radio immunotherapy. So I think the future is very bright, it’s antibody-based.
Radiotherapeutics are still antibody-based, and while there are logistical challenges, such as attaching the radioisotope to the antibody (chelating), but these are being addressed.
We’re seeing exciting new data and already have approved products in areas like prostate cancer and neuroendocrine tumours. And now, newer products are coming that may replace the earlier ones eventually.
As I mentioned earlier, antibody-drug conjugates (ADCs) are a major focus in oncology. I’d say radiotherapeutics are right behind them. They may not be as prominent just yet, but I expect their popularity to grow as clinicians become more familiar with dosing, logistics improve, and the risk–benefit profile becomes clearer, especially for specific, well-targeted indications that can truly benefit patients.
Interviewer: That sounds very positive and encouraging. But what about diagnostics?
Do you expect any breakthrough in cancer diagnostics in the near future—something that could help address one of the biggest challenges we currently face, which is that most patients are diagnosed too late, when treatment options are limited?
What’s your feeling about it?
Charles: Great question. I’ve always had a strong interest in cancer screening. When I was an academic researcher at UC Irvine, I did a lot of work in colorectal cancer screening and cost-effectiveness.
If anyone listening is 45 or older and hasn’t had their colonoscopy yet, please schedule it. It could save your life.
So, I’ve long been interested in how we can improve cancer screening. The next frontier is whether we can detect cancer early through a simple blood test, using circulating tumour DNA or analysing methylation patterns in the blood to detect early-stage cancers.
That research is ongoing and promising, but there are still major limitations. These blood-based tests are often very good at detecting cancers that have already spread. But the whole point of screening is to catch cancer early—ideally at stage 1 or even a T1 lesion, when it can be cured with a relatively simple surgical procedure.
And we’re not there yet. The positive predictive value of these tests, which look at factors such as methylation patterns or circulating tumour DNA in the blood, is not high enough for them to be able to detect cancer at an early, highly curable stage. The field is evolving, and some of these tests are available for patients to pay for out of pocket.
I would just caution patients considering these kinds of screening tests, whether it’s a circulating tumour DNA test, methylation pattern-based blood tests or even whole-body MRIs, which are becoming popular.
If you want to spend your own money on them, that’s entirely your choice. But please don’t substitute them for the well-established screening tests that are proven to save lives.
When I think about effective cancer screening, here’s what comes to mind:
If you don’t smoke, you dramatically reduce your risk of lung cancer. If you get a colonoscopy at age 45, you significantly lower your risk of colorectal cancer.
Prostate cancer screening is controversial, but I personally do it, and I encourage others to consider it.
For breast cancer, while not perfect, mammography and self-exams are very effective tools.
A Pap smear is excellent for cervical cancer screening. Self-examinations are also valuable for detecting melanoma early.
These are the tests that are clinically proven to reduce cancer risk significantly. If you want to go beyond those and explore more experimental tests like a whole-body MRI, which can cost around $3,000, go for it. But don’t do that instead of the screenings that are backed by strong evidence.
The other risk with the whole-body MRI is the following. Sometimes they find something that they just can’t quantify, which can lead to further tests to find out it was a benign lesion all along.
As a surgeon, the evaluation process, which may include a surgical procedure to confirm that the lesion is benign, can itself lead to complications.
Whole-body MRI is not a free pass. It’s expensive and unproven in reducing mortality, and it can lead to unintended consequences.
The other test I would point out is if you’re a smoker with 20 pack years, a chest CT scan is also a proven test to reduce your risk of death.
My advice is to concentrate on the tests that genuinely lower your risk of death, rather than getting distracted by shiny, new tests that may offer no benefits and could potentially harm your health.
Interviewer: Yes, there are quite a lot of new, shiny ones. I agree with you on this one.
As a surgeon, do you expect any breakthroughs in surgery? Do you think there will be anything that could really change things for surgeons and oncologists?
Have you seen anything that you think would be interesting to have?
Charles: When it comes to surgery, I think the biggest change over the past decade, really over the last several decades, has been the increased use of minimally invasive techniques. Prostate cancer is a great example.
Forty years ago, prostate surgery was done as an open procedure. It’s a difficult area to access through open surgery, and the risk of nerve damage was quite high. Today, in most Western countries, nearly all prostate cancer surgeries are performed laparoscopically, often using high-precision tools like the Da Vinci surgical system.
This allows surgeons to precisely separate the prostate from surrounding nerves, significantly reducing the risks of both incontinence and sexual dysfunction. Minimally invasive surgery has truly transformed the field, and I think it’s one of the most important advancements in the past 20 to 30 years. It’s now being applied much more broadly across various oncology procedures.
Interviewer: That has improved not just for patients, but for surgeons as well. I listened to some interviews with surgeons. They said that being able to sit down while working makes a big difference, as they don’t have to stand for hours.
Charles: It’s less taxing for the surgeon, too, as you said. Surgery is a physically demanding field.
Pancreatic surgery used to require a Whipple procedure — a pancreatic duodenectomy, to give it its official name, and you would literally be standing for about seven to eight hours to perform that operation.
So, it’s physically taxing, not as much as for the patient, but you are definitely affected.
Interviewer: Yeah! It’s hard work, it’s not easy. Charles, let’s talk a little about your books.
With everything else you’ve accomplished, I honestly don’t know how you found the time to write two books! Your first book is The Unnecessary Expense, and the second is The Medal Count. I’ll let you share a bit more about them.
Charles: The Unnecessary Expense was really an effort by my former company, TRACON, to share our experience and encourage other companies to adopt what we called an “insourced” clinical trial model.
We strongly believe in this approach. As we all know, drug development is risky, and the biggest cost in that process is running clinical trials. Most companies outsource trials to a contract research organisation, or CRO.
The problem is that CROs often don’t have interests aligned with the sponsoring biotech or pharma company. And why is that? It is largely due to how CROs are paid.
Pharma companies want trials done quickly and cost-effectively. CROs want to maximise their own revenue.
They typically get paid in two ways. One is what I call fee-for-service model. That means they receive a fee for every service performed. While this might sound fair, but the problem is that if they make a mistake and need to redo something, they get paid again to fix it.
It actually encourages a culture of making mistakes, correcting them and getting paid for it. In my opinion, that’s bad enough.
Another problem is that they receive a separate payment, which is the guaranteed monthly project management fee. This means that they are paid every month, regardless of whether they provide any services. So, if the trial drags on for twice as long, they will receive double the amount from the monthly project management fee.
You can understand why there’s little incentive to do the trials correctly the first time and on schedule and within budget, because if they perform them sloppily, correct mistakes, and take a long time to complete the trial, they will actually earn more revenue.
And that’s the whole point of unnecessary expense.
If you insource that function and conduct trials yourself, our view is that you could save approximately 70% on each trial you undertake, and we experienced this at TRACON. We managed trials in oncology, covering all expenses, including paying the site under £100,000 per patient.
In contrast, other companies were paying around $300,000 per patient. And in certain rare disease areas, like CAR-T therapy, we heard of companies paying up to $1 million per patient once all costs were factored in.
How can you sustain a company if you’re paying a million dollars per patient? This is why many small companies have either gone out of business or have been unable to complete their trials, because they ran out of funding.
Insourcing clinical trials can benefit your company by reducing costs. Since you manage the trials, they will be completed on time. There is no incentive to delay when you actually own the trial.
That was the point of unnecessary expense. I’ve been glad that certain companies have embraced the book and adopted the model of insourcing clinical trials, and it has been satisfying to see this.
Interviewer: That’s brilliant! I wanted to say that I’ve read your book and I highly recommend it to anyone interested in understanding the model, as well as the reasons behind investing in certain drugs and not others. It’s also a great resource for anyone looking to gain an understanding of the industry. Many people assume that pharmaceutical companies have plenty of money, so they believe there aren’t any issues.
They should read your book to better understand how the market works and how a drag on the market can still lead to less profitability than expected.
It’s a great insight, very well written, and an excellent book for people to read and learn about the industry and how it works from the perspective of someone with hands-on experience.
I’ll leave you to talk about your second book.
Charles: Thank you so much for the endorsement, Olga. I really appreciate it.
Unnecessary Expense was my first book, available on Amazon. My second book, The Medal Count, has a different focus: it’s about human empowerment.
I was watching the 2024 Paris Olympics, and everyone was discussing China and the U.S., debating which country would win the most gold medals. In the end, both countries actually tied in gold medals, but the U.S. won more total medals. Then people felt that the U.S. was a superior country simply because it won more medals overall.
Then I realised that neither of those countries is particularly successful at winning medals when considering their overall population and national wealth.
The country that does the best is Norway, which is an incredible country. Norway wins 48 times more medals per capita than any other country. China actually wins fewer medals per capita than the global average, and while the U.S. does slightly better, it’s only about twice the average.
One country that truly empowers its citizens is Norway. The book discusses Norway and other nations that prioritise human empowerment, examining this theme through the lens of success in the Olympics.
It also discusses other countries, many of which are poor, but there are other reasons too that prevent them from empowering their people.
There are so many potential athletes who never get the chance to shine. For example, Nigeria, a large country with over 200 million people, It’s not quite as big as the US, but it’s close. Nigerian athletes win a lot of medals, but not for Nigeria.
It’s mainly the descendants of Nigerian immigrants to Europe who become very successful. However, they don’t win medals in their host country because they’re not empowered, which is a tragedy.
Norway is a wealthy country that empowers its citizens to win more medals than any other country in the world. In contrast, other countries that partly due to poverty and partly due to poor governance, don’t win a single medal and don’t empower their people at all.
Then there are the unique individual stories of countries like Jamaica. Although Jamaica is a poor and fairly small country, it wins a disproportionately high number of medals, which suggests that something special is going on there. The book discusses those special factors as well.
So, It’s a book that talks about success and failure in the Olympics.
It talks about the forces that really count and individual anecdotes of how individuals or nations empower their people. If you’re interested in sports and society, and if you like strong statistical analysis to back up conclusions, I think you’ll enjoy Medal Count. It is also available.
Interviewer: That’s brilliant, Charles! It sounds very relevant because it works in the pharma industry as well.
Some countries invest in their people and their start-ups helping them while in other countries this is not common practice. You can see the results.
I think empowerment is a very important thing, and it’s something we can clearly relate to our field as well, not just sport.
Thank you so much, Charles.
Charles: I’ll finish on that. I think that’s such an important point, because certain countries really encourage the pharmaceutical industry, like Australia. Australia has an incredible tax credit programme, and US companies are flocking there in droves to conduct phase 1 studies for two reasons.
The regulatory process is simple and fast. They also receive a tax credit, which means that if the company is not profitable, the tax credit is refunded to the company in cash.
They started to dominate the phase 1 trial design. As you said, it’s the government empowering their pharmaceutical industry. They have really become a dominant force in early-stage trials, and now even more so in late-stage trials, but primarily in early-stage trials because the government empowers the pharmaceutical industry.
Interviewer: Yes, it’s something we can all definitely consider, and I hope we see more initiatives like this in other countries too.
I’d like to thank you for taking the time to speak to me today. I will include links to your books in the podcast so that people know where to find them.
Thank you very much for taking the time to speak to me. Thank you and thank you to our listeners.
