In the past few years, new classes of biologics have revolutionized treatment of autoimmune diseases, especially multiple sclerosis, rheumatoid arthritis, psoriasis, and asthma. Biologics tend to be most effective because they work on specific targets and impact the underlying causes of disease. In addition to new biologics, a number of companies and academic researchers are looking at expanding applications for certain cancer drugs to autoimmune diseases. The rationale behind this is straightforward: both diseases have inflammatory effects and require cytotoxic approaches. However, for all the difficulties scientists have had in understanding cancer, they've had even more in trying to figure out autoimmune diseases. Autoimmune diseases tend to have systemic effects and thus it's hard to pinpoint a single site of disease.

Israeli start-up Can-Fite is developing small-molecule agonists of the adenosine A3 receptor, having come to its lead compound (in-licensed from the NIH) in the course of investigating why cancer never metastasizes to muscle tissue. The firm says mechanistic studies indicate that its lead compound could also treat inflammatory conditions like rheumatoid arthritis.

ACOs have been one of the most hyped innovations in the US health care sector this decade. The buzz may be overdone, but ACOs are now established as a different—and confusing—new customer segment for pharma. How is industry adjusting?