A conference I regretably will not be at, but would have like to have attended is BioPharm America 2011 – 4th International Biotechnology Partnering Conference that is taking place in Boston from today until this Friday, September 9th.
The program overview suggests that it will be an interesting meeting with sessions on personalized medicine, business development and strategy and partnering. On friday there’s a briefing on Regenerative Medicine and Cell Therapy: The Road to Commercialization. If like me, you are unable to attend, you can follow the conversation on twitter using the hashtag #BPA11 (nice and short!). I noticed there’s already some excellent live tweeting from the event. I’ve added an aggregator below to make it easier to follow or catch up on the news. Just click on the play button to see the tweets:
According to a forthcoming article published in Forbes, excerpts of which appear on Matthew Herper’s blog “The Medicine Show,” big pharma should take bigger risks and outsource R&D to smaller, innovative companies.
At least that’s the philosophy of Bernard Munos, the former Lilly sales executive who has focused on the innovation problems faced by the pharmaceutical industry. According to Forbes, he believes that big pharma should “cut research and development” and “rather than do research in house, companies should close their labs and outsource the work to tiny, nimble startups that can explore bigger, crazier ideas.”
However, as Munos goes on to say in an excerpt published by Matthew Herper:
“You cannot script innovation,” Munos says. “You cannot boil it down to a code of best practices. Because it is unpredictable and the opportunities in science do not match the opportunities in markets.”
That is why Munos’ strategy of outsourcing drug discovery may not be the right one – there is no formula that you can give a vendor on how to be innovative. Indeed, leveraging the innovation of small biotechnology companies is nothing new – isn’t that what big pharma already does with its licensing deals and alliances?
The question that comes to mind from the provocative Forbes article is whether innovation of drug development is a service like clinical trials that can be outsourced? Contract Research Organizations (CRO) are now the route by which the majority of companies conduct clinical research. They possess the efficiency and economies of scale to do what is a mundane, process driven task of setting-up, monitoring and processing data associated with a clinical trial on a global basis. Those models works reasonably well and are now the norm. Standard Operating Procedures (SOPs) exist for everything a CRO does in what is a heavily regulated process of gathering data for regulatory submissions.
Is this the same for drug discovery? I am not so sure. Firstly, if you outsource you have to give direction. You have to have a commercial or scientific target, and resources have to be allocated accordingly. Who decides where R&D investment should be spent? Ultimately in any outsourced venture, the company spending the money makes that decision. So all you are doing is shifting the execution of the task, not the development of the strategy, which is where the innovation needs to take place.
Indeed, if one looks at the clinical trial service model, what has happened is that consolidation of small and medium size CRO’s continues to take place. Small companies simply lack the resources to get the job done. I am not convinced that small is necessarily best when it comes to drug discovery.
What’s more, Munos, in the recent Science Translational Medicine (STM) commentary on innovation that he wrote with William Chin, appears to argue for a different model than the one he proposes in Forbes. He states that:
“pharmaceutical companies cannot mitigate risk adequately by pursuing “safe” incremental innovation, instead the industry should reengage in high risk discovery research on a broad scale and only take genuine breakthroughs to the clinic.”
This is easy to say in practice, and may not be a realistic strategy when there is money and sales to be made from me-too and follow-on compounds. How many companies are going to say we are not going to continue with this business model?
According to Munos in Science Translational Medicine (STM) the options open to big pharma are to:
- Participate more decisively in collaborative networks
- Form precompetitive consortia and other partnerships to share costs
- Adopt new research models such as public-private partnerships
To me, there seems to be a disconnect between what Munos says in the Forbes article and what he says in his STM commentary. If he has a clear vision for the future of pharma innovation, he should at least be consistent.
Where I do agree with Munos is the conclusion of his STM commentary that success starts with breakthrough science. This message was also clearly stated at BIO 2011 by the panel on innovation that included GSK’s Moncef Slaoui.
Pharma R&D $ needs to be spent more wisely. In my opinion there is a role for incremental, as well as breakthrough, innovation. The two are not mutually exclusive.
Is cutting R&D and outsourcing discovery the route to success as Munos suggests in Forbes? Only time will tell as pharma R&D retools and refocuses for the future.
Munos, B., & Chin, W. (2011). How to Revive Breakthrough Innovation in the Pharmaceutical Industry Science Translational Medicine, 3 (89), 89-89 DOI: 10.1126/scitranslmed.3002273
What is innovation? Like “strategy” and “leadership” it’s a term we frequently use, something we all seek in the biotech/pharma industry, yet it’s hard to define, even harder to develop or predict.
What is the future for innovative medicines in our industry’s pipeline? was the title of a session that I attended yesterday afternoon at BIO 2011, the annual meeting of the Biotechnology Industry Association (BIO) in Washington DC.
Moderated by John Mendlein, the panel contained some R&D heavy weights:
- Tom Daniel, President of Research & Early Development, Celgene
- Charles Homcy, Venture Partner, Third Rock Ventures
- Moncef Slaoui, Chairman R&D, GlaxoSmithKline
- Doug Williams, Executive VP, R&D, Biogen Idec
Several people in the audience live tweeted the key messages of the speakers, and I encourage you to review them, if interested. The take homes that I took from this session were:
Innovation can be incremental or major breakthroughs
Many people think of innovation as a major breakthrough. Well worn clichés such as “ground breaking”, “game changing” come to mind. In pharma, I’d cite imatinib (Glivec®/Gleevec®) in CML as an example. In the consumer world, the Dyson vacuum cleaner jumps out to me. Something completely redesigned and made better = innovation.
However, incremental change can also be innovation if it has an impact. Take a new drug formulation that instead of daily dosing moves it to monthly doses and in the process improves patient compliance and adherence. That’s incremental innovation.
“Incremental versus major breakthrough” reminds me of scientific research. Most published papers are incremental, only rarely is there a major paradigm shift and landmark study. Only a few PhD students undertake truly novel research, instead the majority pursue incremental avenues associated with their supervisor’s interests. An oversimplification perhaps but there’s some truth to it.
Understanding science enables Innovation
Companies should focus their energies on disease mechanisms where the basic science has reached an inflection point of knowledge i.e. there is enough information for us to apply. This is why the work of research organizations such as the National Institutes of Health (NIH) is so important. In an area where there is the disease knowledge emerging, you can then put together a team of people who understand the science and biology of the disease. This does not guarantee innovation, but allows the identification of opportunities and in my view “enables innovation.”
Innovation will come from focus on molecular pathology of disease
Drug development is no longer focused on treating symptoms but on the underlying mechanism of a disease. Medicine itself is moving in this direction with personalized medicine and drugs that target specific mutations of genes e.g crizotinib in lung cancer. In a complex world of overlapping pathways (cancer and inflammation was the example cited), drug development innovation is going to come from understanding the molecular pathology of a disease. The terms “translational medicine” was not used in the session, but this is what comes to mind. Understanding science is key to success.
What is the future for innovative medicines in our industry’s pipeline? The panelists didn’t actually answer this question directly, but my view is that it is promising.
For those unable to make it to Washington DC for the 2011 Convention of the Biotechnology Industry Organization (BIO) that starts today, you can follow all the #BIO2011 conference tweets live on the Icarus Consultants website.
I will be live tweeting from sessions this afternoon as @3NT.
One of the sessions at BIO 2011 in Washington DC that I hope to make if my travel plans permit, is the Monday afternoon session on “What is the Future for Innovative Medicines in Our Industry’s Pipeline?”
The June issue of Nature Reviews “Drug Discovery” attempts to answer this question by looking back at what happened to the R&D projects involving 28,000 compounds investigated since 1990.
Fabio Pammolli and colleagues analyzed the Pharmaceutical Industry Database (PhID) maintained by the IMT (Institutions, Markets, Technologies) in Lucca, Italy.
In their Drug Discovery article entitled “The productivity crisis in pharmaceutical R&D,” they reach a number of conclusions, some of which are:
- Output of new drugs has not matched investment in R&D
- Therapeutic innovation has become more challenging and complex
- Decline in R&D productivity is associated with investments in R&D areas where risk of failure is high
- There is no evidence of any R&D productivity differences between United States and Europe.
The authors analyzed R&D investment decisions by looking at the potential pay-off for an R&D project (probability of market launch multiplied by potential market value) and the expected Probability of Success (POS) in reaching the market based on the average success rate of compounds with the same pathology.
What I found interesting in their paper was the fact that many of the therapeutic areas with the highest percentage of R&D projects had the lowest average POS e.g. cancer drugs (antineoplastic and immunomodulating agents) had the lowest POS (1.8%) and the highest share of total projects (21.77% from 1990 to 1999, increasing to 29.77% from 2000-2007). The 1.8% average probability of success can be contrasted with 4.19% for musculoskeletal system drugs and 6.64% for dermatologicals.
The authors argue that the data shows a shift towards therapeutic markets with a lower POS. What are the reasons for this? Possible explanations include:
- Orphan drug development incentives: legislation that provides incentives to undertake drug development for rare diseases (orphan drugs) has led to a shift towards these targets, which by definition have smaller markets.
- Development of drugs for chronic diseases e.g. Alzheimer’s disease: Collectively these have a POS of 6.88% compared to the acute disease average POS of 8.77%. 85.80% of R&D projects from 2000-2007 were within this category.
- More research targeting lethal diseases such as cancer and infectious disease, which have an average POS of 5.54% compared to non-lethal diseases, average POS of 9.72%.
The authors conclude from this research that:
“R&D investments tend to focus on new therapeutic targets, which are characterized by high uncertainty and difficulty, but lower post-launch competition.”
This article offers some interesting retrospective analysis, but I am concerned that they may have underestimated the market potential for many rare disease areas where market size cannot properly be quantified.
As Novartis showed with imatinib (Gleevec®/Glivec®), it is possible to build a blockbuster out of a very small, rare market (only 4,500 – 5,000 new diagnoses of CML per year in the United States), creating a new market segment and moving the leukemia from a certain death sentence to a chronic disease that can be easily managed with targeted therapy.
The focus of many biotechnology and biopharmaceutical companies on orphan drug development has been shown to be a valid strategy by Genzyme and others. Proving you can bring a product to market and obtain some revenue is likely to stimulate more company investment rather than less.
In the run up to BIO 2011 several companies have highlighted their orphan drug strategy, including Oklahoma City based Selexys Pharmaceuticals who announced news about SelG1 in Sickle Cell Disease and Lamellar Biomedical from Glasgow with LMS-611 for Cystic Fibrosis.
I am looking forward to learning more at BIO on how industry experts view the future for innovation within the sector. Also whether the orphan drug strategy that many biotech companies are now following will pay off given the lower probability of success in rare indications.
All in all, the 2011 BIO international convention is set to be an interesting and informative meeting. Business cards, comfortable shoes and camera/video – I’m ready!
Pammolli, F., Magazzini, L., & Riccaboni, M. (2011). The productivity crisis in pharmaceutical R&D Nature Reviews Drug Discovery, 10 (6), 428-438 DOI: 10.1038/nrd3405
I am excited to be attending, for the first time, the Biotechnology Industry Organization (BIO) international convention that takes place in Washington DC in just over a week’s time from Monday June 27 to Thursday, June 30th.
This meeting has something for everyone interested in the biotechnology industry whether it be deal making, partnering, licensing, drug discovery or personalized medicine. There are 16 specialized tracks where industry experts provide insight and best practices.
In addition, there are numerous networking and social events plus an exhibit hall that showcases the world’s biotech regions and how they are promoting innovation.
At meetings where there are parallel sessions, I apply “the law of two feet” (thanks to Podcamp for this) that says if you are not getting what you want from the session, it’s OK to walk out and go to another one.
My top 10 sessions at BIO reflect my personal interests in innovation, science and new product development:
Tuesday June 28
- How will we afford Personalized Medicines?
- The Biomarkers Consortium: Facilitating the Development and Qualification of Biological Markers
- Personalized Oncology: The emergence of Personalized Medicine Strategies in Oncology Clinical Development and Deal Making
- Navigating the New Law on Licensing Biosimilars
Wednesday June 29
- Lessons from a Mature Public-Private Partnership. The Alzheimer’s Disease Neuroimaging Initiative
- Emerging Markets. The Future of Growth for Biologics?
- The Role of Imaging Biomarkers in Early Phase CNS Drug Development
- The Promise of MicroRNA-based Therapeutics in Cancer
Thursday Jun 30
- After the Fall. Venture Capital and the Biotech Funding Landscape
- Regulatory Issues for Tissue Engineered Products
If you have plans to be at BIO 2011 do say hello after one of the sessions or receptions. You can reach me at the meeting via twitter (@3NT). See you in DC!
Today and tomorrow, Northern California’s Life Science organization BayBio has their annual meeting. Entitled ‘Powering Global Innovation” it’s a meeting that covers a lot of ground from deal making to partnering, emerging markets and company presentations.
According to their website, they plan to be live streaming to their website. However, if you are interested in following the Twitter discussion (hashtag #baybio2011), you can do so using the aggregator below – just click on the play button to see the tweets:
At this past weekend’s Association of Health Care Journalists (AHCJ) conference in Philadelphia, Ed Silverman from Pharmalot moderated a panel on “efforts to revive the drug delivery pipeline.” He drew the attention of the audience to FDA data, published earlier this year, on the number of applications/approvals for new molecular entities (NME).
Source: redrawn from FDA Center for Drug Evaluation and Research (CDER) presentation. The data in my opinion is a little ambiguous as to the true state of the Pharma industry. While the number of applications declined last year to a five year low of 23, from a previous 5 year high in 2009 of 37, the number of NME approvals at 21 was only just below the 5 year average of 22.
What I took from this data (see chart), was the fact that in 2010 the number of approvals as a percentage of applications was the highest in 5 years (91%) as compared to 70% in 2009. It is too early to tell from this data whether companies are presenting better applications to FDA, or if this data reflects the fact that new products are being terminated if the phase III trial results are not promising.
For the biotechnology industry, the challenge remains that bringing a new product to market is an expensive and risky proposition. However, it is clear that there are some factors that are likely to be key factors for success, including:
- Improved understanding of the biology of disease
- Better clinical trial design
- More rigorous patient selection criteria
- Increased time in the phase II stage
As big Pharma scales back R&D funding in favor of shareholder value and baby biotechnology companies struggle with the challenges of whether to grow or sell out, it will be interesting to see how the FDA application/approval data evolves.
The VC funding from Third Rock Ventures to the Boston/Cambridge based company is reported to be the largest early-stage funding for a New England life sciences start-up.
What makes this exciting news? First it adds to the growing reputation of Boston/Cambridge as a hot-spot for cancer research. Blueprint Medicines will be focused on translational medicine and the development of new kinase inhibitors for the treatment of cancer.
Secondly, it confirms what is taught at business school, that investors back management expertise and their belief in the entrepreneurs ability to execute. In the case of Blueprint Medicines the scientific co-founders are Dr Nicholas Lyndon and Dr Brian Druker, who were instrumental in the development of imatinib (Gleevec/Glivec), a tyrosine kinase inhibitor that revolutionized the treatment of chronic myeloid leukemia (CML).
Blueprint Medicines is a company to watch for the future and Biotech Strategy Blog wishes it well in the quest for personalized medicine and more effective cancer treatments.
The launch of the company in Boston/Cambridge adds to my view that Boston is emerging as the premier biotech region on the East Coast for start-ups interested in oncology and translational medicine.