COVER NGPEU7 v3:apr09 08/04/2009 14:11 Page 1
www.ngpharma.eu.com â€˘ Q2 2009
RIDING THE WAVE
Bernhard Kirschbaum surfs the financial downturn
Why restructuring is the way forward for GSK
CLOSED DOOR POLICY
Shire carves out a special place in big pharma
Justin van Gennep examines the increasing power of payors
STORM How will the European pharmaceutical industry avoid getting soaked by the recession? Page 28
EDITORS NOTE:apr09 08/04/2009 14:19 Page 3
FROM THE EDITOR
Rough weather ahead How will the industry stay afloat in turbulent times?
“In our setting, there is no need to do something that helps in the short term but which in the long term would be a mistake” Bernhard Kirschbaum, EVP of R&D for Merck Serono (Page 34)
“We’re projecting to hire in 2009 in a prudent way. It’s completely justified by the growth of the business”
t’s been a tough few months for the pharmaceutical industry, on both sides of the Atlantic. Mergers, layoffs, cost-cutting exercises – it seems we are not immune to the stormy effects of the global financial crisis after all. Or are we? The main merger and layoff activity so far has been centred on American companies. Pfizer/Wyeth and Merck/Schering-Plough are all USbased, with Roche/Genentech being the obvious exception. The Pfizer/Wyeth merger alone will result in the loss of 20,000 jobs. By contrast, some European companies seem to be doing rather well. Late last year, Novartis said its profit had reached €6.2 billion and that sales had increased nine percent. The company also boasts the largest cash reserves among the big players – €11.4 billion. German drugmaker Boehringer Ingelheim has invested €1.73 billion in research and development in the last year, and has added 400 new employees. Shire, with headquarters in both the UK and the US, has hired 2500 people in the last three years. This is no time to be smug, however. As the latest report from PricewaterhouseCoopers points out, big pharma’s strategy of putting all its money on a few molecules and turning them into blockbusters looks to be running out of steam. Productivity in the lab will drop sharply as companies turn their attention to more unusual or complex diseases in an attempt to replace drugs going off patent. The report also quotes estimates that generic erosion will knock between two and 40 percent off the revenues of the top 10 companies between now and 2015. No matter how relatively secure we feel in Europe, watching as events unfold across the ocean, we can’t escape the fact that the pharmaceutical industry is international. We too will face our own patent expiries and will find ourselves staring the dearth of new blockbusters in the face. It may not be on quite the dramatic scale that we’ve seen in the US, but change is coming, whether we like it or not. Depending on how you look at it, this is either the time to take bold risks – when there is little to lose – or to hunker down and protect what we’ve got. Perhaps the best strategy will be a little of both: look after our core assets, but at the same time embrace new opportunities. It will be interesting to see which companies master the art of staying afloat in the troubled waters of 2009.
Sylvie Grégoire, President of Human Genetic Therapies, Shire (Page 40)
“We’re making changes that will make us stronger. If we don’t make them now, we’re not going to be standing when it’s havoc in the industry” Moncef Slaoui, Chairman of R&D, GSK (Page 86)
Marie Shields Editor
Sink or swim How will we keep our heads above water in the wake of the financial downturn?
86 Ringing the changes How Moncef Slaoui is radically restructuring GSKâ€™s R&D
28 Riding the wave Why Bernhard Kirschbaum isnâ€™t worried about the crisis in the financial markets
40 Standing out from the crowd Shire carves a recessiondefying niche
CONTENTS MANUFACTURING, RESEARCH AND DEVELOPMENT
59 Contract manufacturing With Grindeks’ Lipmans Zeligmans, Anders Ulfhielm of Rechon Life Science and Jim Kernan of PharmaFlow Ltd 72 Outsourcing With Piramal Healthcare’s Aidan Walker, Aesica Pharmaceuticals Ltd’s Keith Payne, Shasun Pharma Solutions Ltd’s Kevin Cook and Fine Organics Ltd’s Keith Hanson
Justin van Gennep
ASK THE EXPERT 90 Waters 98 Ethan Smith, Metastorm 100 Richard Lake, Restek Corporation 106 Peter Duncan, Definiens AG 118 Robertus van Miltenburg, Roche Diagnostics 122 Gerd Maass, Roche NimbleGen 124 Kamni Vijay, Bio-Rad Laboratories 128 Jean-Luc Tardieu, Cisbio Bioassays 146 Sybille Queißer, sellxpert GmbH & Co KG
83 Supply chain With Jean Bédard of Alternatives Technologie Pharma Inc and Richard Harrop of SCA Cool Logistics 109 Drug discovery With Simon Wood of STARLIMS Corporation and Ed Addison of TeraDisc
CASE STUDY 32 Dave Champagne, Thermo Fisher Scientific 76 Slim down, tone up Novartis’ Steve Dreamer explains why Lean works in continuous manufacturing
92 Leaping ahead in translational medicine Amgen’s Brian Kotzin translates science into medicine
44 Cut down, collaborate and focus on the customer
102 Building relationships around the globe
Pfizer’s Kim Sendall is busy designing the manufacturing facility of the future
Joan Shen extols the benefits of international clinical trials
54 New concepts in risk control
116 The genetic advantage
Bayer’s Helmut Mothes examines the success of Lean manufacturing
Allen Roses on using pharmacogenetics to make clinical trials more efficient
64 Turbulence ahead
126 Pest control
Sammy Rashed on ensuring supply chain security in these stormy financial times
How an ad featuring a rat helped the MHRA raise awareness of counterfeit medicines
INDUSTRY INSIGHT 52 Martin Svantesson, Geodis Wilson 70 Patrick Boosyut, Siemens 114 Jeff Spitzner, Rescentris 130 Zheng Wang, MPI Research 132 Martin Crockard, Randox 134 Andrew Reaume, Melior Discovery Inc 138 Justin van Gennep, Innovex
CONTENTS MARKETING AND TECHNOLOGY
EXECUTIVE INTERVIEW 50 Manfred Zurkirch, Divdella AG 96 Xavier Cristina, Applied Biosystems 112 Andreas Persidis, Biovista Inc 120 Philippe Goix, Singulex Inc 144 Sati Sian, IMS Health 136 Patient power Isabelle Mercier explores the power of patient influence in marketing
141 The grass is always greener Astroturfing and big pharma
142 Down but not out Frost & Sullivanâ€™s latest survey shows marketers are not giving up the fight
148 Virtual reality
How telepresence is changing the way we do business
IN THE BACK 152 Travel 154 In review 156 Profile: Janez Potocnik 158 Events 160 Final word: John Singer explains why this is a good time for creative leadership P L AT I N U M S P O N S O R
CREDITS NGPEU6:apr09 08/04/2009 14:17 Page 10
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UPFRONT NGP EU7:nov08
DON’T LET THE BED BUGS BITE
A US STUDY looking at the available evidence on bed bugs found that while they are highly resistant to a number of methods of extermination, they are likely to be more of a nuisance than a serious health problem. However, the possibility that they could one day be vehicles for disease needs further research. The bed bug (Cimex lectularius) has been a human parasite
for thousands of years. hosts, in places like mattress Infestations are rising fast; more seams, crevices in the bed, beso in developed counhind the headboard and tries, probably due to loose wallpaper. international travel, From what we Bed bugs prefer to hide immigration, know, bed bug with in a changes in how bites tend to be pests are conmore of an irritant trolled and insectithan anything, alof their hosts cide resistance, wrote though they can cause the study’s authors. some skin reactions. Bed bugs prefer to hide However, their potential to serve within a few metres of their as ‘disease vectors’ and how best
UPFRONT NGP EU7:nov08
NUMBER CRUNCHING Up to
15 million people in Europe bear a risk of developing a severe allergic reaction after being stung by an insect Factor by which pregnancy makes a woman more attractive to malariacarrying mosquitoes:
2 Estimated number of fireflies it would take to generate the visible brightness of the sun:
14,286, 000,000 Between
40-100 trol articles from 1960 to 2008. to control and eradicate them is They also did manual searches not well understood. for older texts in jourFor the study, which nals, textbooks, was published online trade journals and in the Journal of the Bed bug bites tend to be newspapers from American Medical more of a 1892 to 2008. Association, JAMA, For the cliniJerome Goddard cal studies, they inand Richard than anything cluded original deShazo from the accounts of bed bug inUniversity of Mississippi vestigations that had enough Medical Center searched datadetail of cause and effect bebases for medical and pest con-
tween the insect bites and clinical effects and sufficient evidence that bed bugs were the source of the bites. The researchers found 53 articles that met these criteria, but only found two clinical trials that tested the ability of pest control interventions to eradicate the insects. They also found that a variety of clinical reactions to bed bugs were reported, mostly skin reactions.
people die each year in the US from insect sting allergies Maximum number of months humanity could survive without invertebrates:
UPFRONT NGP EU7:nov08
GRACE INTRODUCES REVELERIS FLASH GRACE DAVISON DISCOVERY SCIENCES has introduced the Reveleris Flash Chromatography System, a leap forward in enhancing productivity in drug discovery. The benefits to medicinal chemists include seeing potential molecules they may be currently missing with UV-only detection, along with less rework needed due to higher fraction purity and improved detection, more target material collected and greater throughput. The Reveleris Flash Chromatography System is a combination of Grace’s collective expertise in silica gel manufacturing and detector technology,
creating the next generation of flash purification systems. The patent-pending RevealX technology detects both chromophoric and non-chromophoric molecules. This technology overcomes the limitations of traditional UV detection, which will only detect chromophoric components, and can miss any non-chromophoric impurities or compounds of interest. The system is equipped with Radio Frequency ID (RFID) labeled Reveleris SRC cartridges, which are packed with a specially developed grade of silica and have a higher pressure rating. These cartridges improve purification by significantly boosting system resolution, sample loading and recovery. By increasing sample loads on a given cartridge size and reducing run times, sample throughputs and yields increase, making overall purification costs lower, the system offers a footprint that allows it to easily fit in a fume hood. Its intuitive software and graphical interface make it very easy to use. The Reveleris Flash Chromatography System is one of a range of Grace’s solutions for drug discovery purification and analysis.
Web: www.discoverysciences.com/Reveleris The information presented herein is derived from our testing and experience. It is offered for your consideration and verification. Since operating conditions vary significantly, and are not under our control, we disclaim all warranties on the results that may be obtained from the use of our products. Grace reserves the right to change prices and/or specifications without prior notification. W. R. Grace & Co.-Conn. and its subsidiaries can not be held responsible for any damage or injury occurring as a result of improper installation or use of its products. REVELERIS, SRC, and REVEALX, are trademarks of Alltech Associates, Inc. Alltech Associates, Inc. is a wholly owned subsidiary of W. R. Grace & Co.-Conn. Grace Davison Discovery Sciences is a product group of W. R. Grace & Co.-Conn., which now includes all product lines formerly sold under the Alltech brand.
CONTRACT MANUFACTURING label or double blind studies. MP5 AND CRÉAPHARM, subSince 1990, Créapharm has sidiaries of Créapharm Europe, are completed the full packaging of pharmaceutical contract manufac6000 clinical batches. turers, committed to investigationCréapharm offers its cusal medicinal product development tomers a high expertise in laand supply. belling and quality services. Créapharm Europe offers Included in this are labels for biotech and pharmaceutical comone or several panels, black panies a complete range of serand white or colour printing, vices, from the development to the multilingual texts (all alphabets distribution of clinical batches. and ideograms), decoding enMP5 specialises in the develvelopes and randomisation opment and production of injecta(imported or generated). bles, liquid or lyophilised, supplied We are committed to offerin vials, bags or syringes, in particuing reactivity, assistance, lar for substances requiring contransparency, 100 percent finement/isolators (high potency traceability and reliability, and drugs or cytotoxics for example). distribution. The services we Créapharm is one of Europe’s use for this are importation leading investigational medicinal and European pharproducts suppliers. maceuticals reCréapharm is Créapharm is lease, along registered by the one of Europe’s with distribuFrench health tion throughproducts safety out the world, agency (AFSSinvestigational thanks to our APS) for the promedicinal products suppliers strong worldduction, wide partnerships. packaging and distriWe also provide manbution of investigational agement of dangerous prodmedicinal products. ucts (narcotic and Créapharm specialises in psychotropic drugs) and exfour fields, the first being manupress shipments at controlled facturing. Créapharm provides temperatures (positive or negcapsule blinding as well as manative), along with returns, ufacturing of placebo capsules checking and reconciliation, (Coni-Snap and DBcap capand destruction at the end of sules). Our highly experienced the studies. staff react quickly and efficiently Our carriers are audited to customer needs, thanks to and certified every year in order our high-performance semi-auto offer you the best services. tomatic machines; and our overIn the last 10 years encapsulation capacity is the Créapharm has handled largest in Europe. 250,000 shipments to investiCréapharm also specialises in gational sites worldwide. packaging: primary packaging We are absolutely mindful (blister packs and bottles), secof our customers needs. You ondary packaging (boxes or blister need the best, we do the best! cards) and packaging for open-
UPFRONT NGP EU7:nov08
FRONTLINE PAT SOLUTION
PROTECTION AGAINST BIRD FLU
THE LATEST GENERATION of ABB’s PAT solutions, Industrial IT eXtended Process Automation Technology (xPAT), provides simplified engineering and streamlined integration with enterprise systems, as well as broad connectivity to a host of analysers to help customers achieve continuous process improvement, real-time product release and Quality by Design (QbD). As a leading-edge quality control concept in the biopharma industries, PAT has increasingly gained worldwide acceptance by many industry experts as a proven method of ensuring product safety and quality. It promotes the integration of analytical measurements into the manufacturing process to streamline and improve new product development as well as improving the quality and ensuring the safety of the end product. With its powerful integration capabilities and functionality, xPAT helps life science industry customers implement QbD throughout the entire pharmaceutical product lifecycle, from drug discovery through development to production. ABB’s Industrial IT solutions for PAT and automation are applicable to the complete product lifecycle – from development, through scale up to manufacturing. ABB provides an integrated environment for ease of engineering, data and process visualisation, data management, multivariate advanced statistical process control and enterprise connectivity. Interoperability with analysers is assured by a common configurator and industry standard analyser interfaces based on OPC UA technology. xPAT integrates analytical and automation products in a flexible and scalable platform. It provides a single configuration for multi-vendor analytical instrumentation, data acquisition and central storage of all analyser and process related data. The PAT data management and control platform allows users to manage analyser control parameters, store analyser data and perform multivariate data analysis for process monitoring and control.
RESEARCHERS HAVE DISCOVERED human antibodies that can neutralise not only H5N1 bird flu, but also other strains of influenza. The antibodies, comprised of immune system proteins, may be used to protect frontline workers and others who may be at high risk should a pandemic of flu break out.
The initial tests on mice, done by scientists in Hong Kong and the US, have shown to be highly effective. The speed of antibody response is reported to be far higher than the H5N1 bird fly vaccine produced by sanofi-aventis for humans.
RISE IN SLEEP DISORDERS
due to the steady rise in childhood and adult obesity rates, which could be a contributing AT LEAST 20 MILLION Europeans suffer from factor to obstructive sleep apnea,” said Frost chronic, long-term sleep disorders every year, & Sullivan Senior Research Analyst Janani and 10 million more have occasional sleeping Narasimhan. “According to doctors, more problems. Sleep facilities have witnessed a awareness about treatment options through rise in patients of 10 percent in the last 12 media dissemination along with referrals months, and this number is expected from friends and family members have to grow further at a rate of nearalso added to the increase in ly 13 percent in the next year. At least sleep facilities.” New analysis from Despite the rise in the numFrost & Sullivan, Sleep ber of reported sleeping disorEuropeans suffer Service Providers – A White ders, it is estimated that many from chronic, longPaper on the Scope and of those affected remain unditerm sleep disorders Opportunities in Europe, exevery year agnosed. There remains a lack of amines hospital and non hosawareness about asymptomatic pital-based sleep service providers sleep disorders, which has resulted in di(physician-owned and operated laboratories). minishing rates of testing. Many people develop The study found annual medical expenditures cognitive deficits after a few nights of reduced on sleep-related disorders to be about US$10 sleep quality or quantity and new evidence sugbillion (€7.4 billion). Indirect costs due to gests more health-related consequences of lower productivity and other factors were esti- sleep debt such as common viral illnesses, diamated to be much higher. betes, obesity, heart disease, depression and “A part of the boost in sleep facilities is other age-related chronic disorders.
Learn more at: www.abb.com/lifesciences or email us at: email@example.com.
UPFRONT NGP EU7:nov08
FRONTLINE HAMILTON UNVEILS BIOLEVITATOR
SUPPLEMENT FAILINGS AN OVER-THE-COUNTER DIETARY SUPPLEMENT taken by arthritis patients has been found to be not as effective as once thought. Glucosamine, a substance that is naturally produced in the body, has failed to emerge from trials as a suitable supplement for sufferers. Anomalies in the wide-ranging results of the trials of glucosamine sulphate mean the results of the study are inconclusive, and therefore the compound is too unstable to be used as a supplement. Another study was conducted as a follow-up to the glucosamine trial; the second study also tested chondroitin sulphate, a carbohydrate that helps cartilage retain water, which is often taken in combination with glucosamine. The results of the study deemed the substance to be just as unreliable as straight glucosamine, and therefore no treatment could be suggested.
AGREEMENT SIGNED ZYDUS CADILA, based in Ahmedabad, India, has signed a new drug discovery and development agreement with Eli Lilly that aims to increase productivity in drug discovery and development by alligning the unique strengths of both companies. The collaborative research programme may continue for up to six years, according to a Zydus spokesperson. Lilly will have an option to license resulting molecules at different stages. Zydus would receive payments of up to $300 million and royalties on sales.
optically clear and non-autofluoTHE BIOLEVITATOR is the first rescent pipettable substrate for benchtop 3D cell culture system on adherent cell lines. The GEMs the market, delivering significant contains paramagnetic particles productivity gains to researchers in that facilitate suspension in the drug discovery, cell-based theraLeviTube and media changes. peutics and regenerative medicine. Custom protein coatings are The BioLevitator brings the engiavailable to facilitate growth of neering and automation expertise difficult cell lines and the GEM’s of Hamilton together with Global hydrogel core inhibits ice crysCell Solutions’unique approach to tals during cryopreservacell culture for a scalable tion, ensuring high and automated syssurvivability and tem that reduces cell function. costs while imHamilton proving the Company is a consistency and is the first benchtop 3D cell culture system leading worldwide relevance of culon the market supplier of precise tured cells. liquid handling deTheBioLevitator vices, laboratory automaeliminatestraditionalpetion and storage systems, ripheralcellcultureinstruments, serving customers in academic suchasincubatorsandcentrifuges, and private research laboratoandminimisesmanualhandling. ries, pharmaceutical and clinical EachoftheBioLevitator’sfourhydiagnostic companies and govdrophobic,PTFE-filtered50mLcell ernmental institutions. Hamilton culturetubescanproducecell maintains headquarters in growthequivalenttouptotenT75 Reno, Nevada, US and Bonaduz, flasks, depending on the cell line. Switzerland, both of which The system features a user-friendly house R&D and production faciltouch screen interface with real-time ities. Hamilton has subsidiaries monitoring, and control of environfor direct sales and service in mental temperature and CO2 levels. many countries and works with The BioLevitator utilises the a wide distributor network in Global Eukaryotic Microcarrier other regions. Hamilton is a pri(GEM) technology from Global Cell vately held company. Solutions. The GEM provides an
GARDASIL DEEMED SAFE THE EUROPEAN MEDICINES AGENCY has said that Gardasil, the human papillomavirus vaccine produced by Merck & Co., is safe to use and is unlikely to have caused two girls in Spain to become ill. An expert committee reviewed the two cases and regulators will continue to recommend vaccination with Gardasil “in accordance with national vaccination programs in member states” of the European Union.
HIV LINKED TO TB A NEW REPORT by the World Health Organization shows a close link between tuberculosis and HIV. The report says that nearly 9.3 million people became ill with tuberculosis in 2007, and of these new cases, 1.4 million – 15 percent – were linked to HIV. The TB Control report finds
one out of four TB deaths, or nearly half a million deaths, is HIV-related, nearly twice as many as previously realised. According to the WHO, the escalating number of TB deaths among people infected with HIV shows a need for a joint, well-coordinated response to the two epidemics.
UPFRONT NGP EU7:nov08
FRONTLINE IN MY VIEW
JOSEPH JIMENEZ CEO, Novartis Pharmaceuticals My experience at Heinz was of great benefit to my career in the pharmaceutical industry. Innovation is very important in the consumer packaged goods world, because itâ€™s a fast-moving market. You can come up with an idea and launch a product within 12 months. Things are constantly changing, and that changing mentality has helped me to look at things and think about innovation in a different way. When I was first exposed to the pharmaceutical industry in 2002, I grew aware of many of the issues that the industry was facing, and I found it intellectually stimulating to see how it was changing. It was clear to me that a new business model would be required to win in this changing environment. The old industry model, from a sales executive standpoint, was focused on the physician, with a strategy to deliver the message multiple times to that physician. Physicians, however, at least in some parts of the world, now have less and less say in what is actually dispensed, as payors and providers and more restrictive markets shift that balance of power. And yet we were still addressing the physician as the sole decision-maker. The pharmaceutical industry is a good industry, but it is going through some tough times. The long-term prospects of the industry are very positive. With an aging population and with the cost of chronic illness accelerating with that aging population, the capability that has been created in Novartis in terms of discovering and developing new and innovative medicines that meet unmet medical needs is going to position us very well for the future. Consolidation among the big players in the industry hasnâ€™t increased efficiency, or the effectiveness of development, and neither has it enabled companies to better meet the needs of patients or other stakeholders. Development is being restructured to be able to operate in a tougher regulatory environment. We are moving from what has been functional decision-making to cross-functional teams that are empowered and focused around moving our molecule from early development all the way through commercialisation.
UPFRONT NGP EU7:nov08
DRIVING RETURNS FROM YOUR ERP INVESTMENT
ing of the users, as well as postMANY ORGANISATIONS FAIL to ponement of the implementation deliver the benefits which were of some parts of the system due to envisaged in the original busiimplementation fatigue or budness case for their ERP sysgetary constraints. tem investment. When this hapSome of the comMost of pens, a very expenmon reasons for the cost of the sive asset is being this are due to a significantly underlack of focus on utilised. The benefits realisaimplementation Enterprise Resource tion during imhas already been incurred Planning (ERP) plementation or Assessment is a low cost from taking inadeapproach to identifying opporquate account of process tunities for improvement and preand organisational change. This senting potential benefits to the also may be the case because of senior management team. insufficient education and train-
DELIVERABLES An assessment is made of current operations and of how the ERP system is being used to support and improve the business processes. An analysis of results and identification of opportunities for improvement is produced to provide an estimate of benefits resulting from those opportunities, which often come in the form of a prioritised list of potential improvement initiatives. A feedback presentation is then made to senior management outlining the potential benefits and proposed implementation approach.
BENEFITS Most of the cost of the ERP system implementation has already been incurred â€“ the ERP Assessment is about identifying how to drive further benefits from the initial investment. The assessment and feedback processes are highly engaging and interactive, which helps to build ownership and commitment to the improvement initiatives, and many of the initiatives identified are likely to be low investment in relation to the return, and therefore will be self funding. For more information on this service, please visit www.bsmconsulting.co.uk/erp-assessment.
BAD CONNECTIONS A STUDY BY BOSTON RESEARCHERS published in the journal Psychotherapy and Psychosomatics found that most of the psychiatrists on the American Psychiatric Association panels who wrote the newest clinical guidelines on treating depression, bipolar disorder and schizophrenia had financial ties to drug companies. Lisa Cosgrove of the University of MassachusettsBoston and colleagues searched publicly accessible databases such as Medline and
the records of the federal patent office to identify financial ties. Eighteen of the 20 authors had at least one financial tie to drug companies. Twelve authors had ties in at least three categories, such as consulting, research grants, speaking fees or stock ownership. The study also found that all of the authors of schizophrenia and bipolar guidelines had relationships with the drug industry, while 60 percent of the authors of the depression guidelines had similar connections.
ISSUE IN NUM8ERS
3 â‚Ź2 bilion a year GSK is undertaking a restructuring plan to reduce costs by
over the next two years (p28)
An orphan disease is one that hits anywhere between 2000 and 250,000 people (p40) Between 600,000 and
800,000 babies die every year in the developing world from rotavirus-induced diarrhoea (p86)
106,000 deaths are caused by adverse drug reactions in the US each year (p116) www.ngpharma.eu.com
UPFRONT NGP EU7:nov08
FRONTLINE INTERNATIONAL NEWS
PREVENTION OF MAJOR BIRTH DEFECTS A STUDY UNDERTAKEN by a group of researchers based in Washington, DC, has found that women need enough vitamin B12, in addition to folic acid, to cut the risk of having a baby with a serious birth defect of the brain or spinal cord. One of the researchers, Dr. James Mills of the US NIH, said the study showed that vitamin B12 deficiency was a risk factor for neural tube defects independent of folic acid, another B vitamin. Irish women have been found to have the lowest vitamin B12 levels, and are therefore five times more likely to have a baby with a neural tube defect. In response to the results found in the study, Mills has advised that women who do not eat meat or dairy products to be particularly vigilant with their vitamin B12 intake during pregnancy.
FLU VACCINE APPROVED IN AUSTRALIA SANOFI PASTEUR, the vaccines division of sanofi-aventis, has announced that Emerflu, its pandemic influenza vaccine for use in humans, has been granted marketing authorisation from the Australian Therapeutic Goods Administration. The vaccine is now approved for the prevention of pandemic influenza in Australia upon official declaration of a pandemic. It is intended to be manufactured and distributed with the identified pandemic strain and used in Australia in accordance with official Australian government practice. The approval follows the positive recommendation by the Australian Drug Evaluation Committee in February, based on a review of results from clinical trials, which began in late 2004 on H5N1 alum-adjuvanted inactivated influenza vaccine candidates. The trials evaluated the safety and ability of the vaccine to elicit a protective immune response to the H5N1 strains currently identified by global health authorities and experts as a potential source for the next pandemic.
TAKEDA MOVES INTO CANADA company, Takeda is striving to reTAKEDA PHARMACEUTICAL inforce a global operating infraCOMPANY LIMITED and its structure including expanding its wholly-owned subsidiary, own sales channels. Takeda’s enTakeda Pharmaceuticals North trance into Canada is a sigAmerica, Inc., has annificant step in nounced the esexpanding Takeda’s tablishment of Takeda North American aims to be a Takeda Canada presence,” said Inc., expandYasuchika ing the compapharmaceutical Hasegawa, presiny’s North company dent of Takeda. American presTakeda Canada ence into the will register and commerworld’s eighth largest cialise medicines from Takeda’s pharmaceutical market. Takeda portfolio of primary care and speCanada will be headquartered cialty products. Takeda Canada inin Mississauga, Ontario, west of tends to file its first New Drug Toronto, one of the top three Submission (NDS) with the biotech areas in North America. Canadian Health Authority by the “Aiming to realise itself as a end of 2009. world-class pharmaceutical
UPFRONT NGP EU7:nov08
FRONTLINE INTERNATIONAL NEWS
COMBATING COUNTERFEITS not say that the Middle East region A FORUM held in Sharjah, UAE in is free of fake medicines, especially February 2009, saw representabecause of the presence of many tives from government departfree trade zones.” ments and the private sector Dubai is the centre of tackle the increasing business transit, with worldwide problem The UAE goods from Africa of counterfeit Ministry of Health and Asia passing pharmaceutiwill be making through en route to cals. The the rest of the Middle East has requirements for world. The UAE been specifically drug trading Ministry of Health retargeted, despite quires all companies imrecent initiatives to porting prescription and limit the amount of trade non-prescription medicines to obin fake, and potentially dangertain a permit to move their products. ous, medicines. Steve Allen, With the importation of fake mediEurope and MENA Senior cines on the rise, the Ministry will be Director of Global Security for making the requirements for drug Pfizer, said, “There are lots of initrading stricter and placing a ban on tiatives being taken against non-registered drugs. counterfeiting here. But we can-
NEW CANCER DRUG US-BASED Synta Pharmaceuticals Corp and GlaxoSmithKline have entered into an agreement for the development and commercialisation of the drug Elesclomol. The collaboration was secured upon a €7.5 million payment from GSK to the biopharma company that focuses solely upon the treatment of severe medical conditions. Elesclomol is an investigational, oxidative stress inducer that triggers apoptosis (programmed cell death) in cancer cells. It is not yet approved for any indication in the market. The partnership makes Synta eligible for a total of €440 million in pre-commercial milestone payments, of which €40 million have been paid to date, €75 million is related to additional progress in melanoma, and the remainder is related to progress in other cancer indications.
PROBLEM MERGERS TEVA PHARMACEUTICALS INDUSTRIES LTD, the world’s largest generic drugmaker, reported a fourth quarter loss following its acquisition of rival Barr Pharmaceuticals. The Israel-based company experienced a net loss of €519 million, compared with a net profit of €430 million the previous year. The company acquired New Jersey based Barr for
€5.62 billion in late December 2008, and was forecasted to post a new profit of €2.19 billion from the merger. In a statement given at the time, Shlomo Yanai, Teva’s President and CEO said, “With the integration process (of Barr) well under way, we believe we will realise even greater synergies from the combination than we initially anticipated.”
ONE STEP CLOSER TO COLD CURE are a breakthrough for asthma US RESEARCHERS have desufferers and those with chronic coded the genome for 99 obstructive pulmonary disease. strains of the common cold, However, the cost for and as a result, may have the development of come one step clossuch drugs can be er to finally findThe typical high. Anti-viral ing the cost of developing drug experts prelong-awaited a new drug is around dict the typical cure. Stephen cost of developLiggett of the ing a new drug to University of be around €530 milMaryland created lion. There is also a long findings from a process of regulations to go. process of cataloguing the With the effects of the common vulnerabilities of the virus; he cold being very minor, combined says the benefits with an expensive process in which to manufacture and market the drug, it seems unlikely that the common cold cure will take off.
UPFRONT NGP EU7:nov08
P&G OUT OF THE GAME PROCTOR & GAMBLE is taking itself out of the pharmaceutical branding industry in an attempt to focus more heavily on its high growth business arms. The company is working with Goldman Sachs to identify potential buyers for its consumer products, following record low share prices of $52.21 (€39.39) in February 2009. The company’s healthcare division, which includes its pharmaceutical business, recorded €11 billion in sales in 2008, with a net earning of €1.8 billion. With the company’s focus moving away from investment into new drug development, P&G have now taken the direction of shedding some of its key pharmaceutical brands.
€39.39 The company saw record low share prices of
Pharmaceutical business recorded
in sales in 2008
€1.8 billion With a net earning of
COMPETENCE FOR SOLID FORMS
six billion pieces of pressings and 80 million packages with 200 million blisters. Dragenopharm’s products are granulates, tablets, film-coated tablets, sugar-coated tablets, capsules, powders and clinical samples in batch sizes for development, scaling up to a production of up to 750 kg. Investments in packaging capabilities with DRAGENOPHARM APOTHEKER three new lines for blisters and bottles are now PÜSCHL GmbH is a global contract manufacturer in focus and Dragenopharm is able to offer a for solid forms in the pharmaceutical and the broad and wide range in all different materials healthcare section with headquarters in and quantities with adjusted equipment. Tittmoning. Additional locations are Berlin, A new administration and laboratory buildNeuötting and Warstein. The innovative entering in Tittmoning with 7000 sqm of prise with highest pharmaceutical space was built in 2008 and a huge competence is a leading European A new capacity for different analytic administration guarantor concerning quality as and laboratory methods including EU-release regards to manufacturing and building with was created. Transparency was in development of pharmaceutiall areas provided by the installacal products in full service. tion of glass walls. Dragenopharm Apotheker of space was built in 2008 Transparency meets security in a Püschl GmbH was established in perfect way: all sites and procedures 1949 as a private company and has meet the requirements of GMP-guidelines and always been dedicated to contract manufacISO 27001. turing. The enterprise is a member of Aenova, a As one of the leading German contract leading European group of contract manufacturing manufacturers for solid oral forms (European in solid oral forms of pharmaceutical and dietary Best 500 nominee), we deliver finished prodsupplement products. ucts mainly to customers within Europe, also to Dragenopharm is experiencing steady growth other continents. of its four different plants, with an annual output of
CHANGES TO ANIMAL TESTING PROPOSED REVISIONS to the European Union’s animal testing directive, 86/609/EEC are currently making their way through the European Parliament. According to campaign group Animal Defenders International (ADI), MEPS have tabled more than 500 amendments to the Directive. They decry what they call a “fierce lobbying campaign by those in the primate trade and research industry” which they say threatens to tear apart the proposals and open up a free-for-all in animal experimentation in Europe. The UK-based Royal Society for the Prevention
of Cruelty to Animals (RSPCA) also voiced fears that the Committee would “opt to weaken the way the proposed law will regulate the use of animals in experiments because of exaggerated claims that lifesaving research will grind to a halt in Europe if the proposal is approved in its current form”. The UK bioscience sector warned in a declaration that many of the proposals in the revised draft directive, as well as some of the amendments proposed since last November, “could undermine animal welfare either directly or by driving research abroad, or would hinder bioscience with little or no animal welfare benefit”.
UPFRONT NGP EU7:nov08
GSK TO DRAMATICALLY RESTRUCTURE UK PHARMACEUTICALS giant three years. Witty did not say GlaxoSmithKline is to spend how many jobs would be lost – US$5.1 billion on reand claimed many would structuring its orbe reallocated. The GSK ganisation, the news followed the is to spend group’s CEO announcement Andrew Witty by GSK that it recently told has sustained a the UK’s fall in full-year on restructuring its Financial Times. pre-tax profits organisation The move could from US$10.7 bilsee the company cut lion to US$9.5 billion thousands of jobs in a bid to on sales, which were up by achieve annual pre-tax savings seven percent from US$32.3 of US$1.4 billion within the next billion to US$34.7 billion.
TAKE HEART Sweden and colleagues, was SWEDISH SCIENTISTS have published online in the 3 April found that heart muscle cells are issue of Science. renewed over our lifetime, so we The researchers took adare not limited to those we vantage of the fact that are born with. The carbon-14 generated discovery could One percent by nuclear bomb open the door of our heart cells are tests during the to treatments Cold War gets that replace into DNA, includdamaged per year at ing that in heart heart tissue age 25 muscle cells (carwith new cells. diomyocytes). This can The study, by then be used to date the age of Professor Jonas Frisén of the the heart muscle cells in humans. Karolinska Frisén and his team found Institutet, in that heart muscle cells renew Stockholm, gradually over the human lifetime, although the rate declines as we get older. One per cent of our heart cells are replaced per year at age 25 and this falls to 0.45 per cent at age 75. They also found that over a normal lifespan, fewer than 50 percent of the heart’s muscle cells are replaced.
FROM THE VAULT In the Q2 2008 issue of NGP, WAYNE PISANO, CEO of sanofi pasteur, emphasises the fact that the company is the only one in Europe dedicated entirely to the production of human vaccines. In this exclusive interview, he also divulges his commercial strategy of growing existing core assets and increasing capacities to answer medical needs in the new market. Go to www.ngpharma.eu.com to browse ‘Past issues’ and view the cover story of the Q2 2008 issue, and read Pisano’s vision to create “a world in which no one suffers or dies from a vaccine-preventable disease”.
THE TRUTH ABOUT BROCCOLI A NEW REPORT in Cancer Prevention Research details the power of the three-day-old broccoli sprout to eliminate Helicobacter pylori (H. pylori) infections, a widespread type of bacterial infection and a major cause of stomach cancer. The cancer-protective effects of sulforaphane, a phytochemical from broccoli, have been documented for almost 20 years. However, the effect of broccoli in humans on the bacterial infection that leads to stomach cancer was explained for the first time in this
study. Seventy grams of fresh broccoli sprouts or its equivalence in alfalfa sprouts were given daily to 48 Helicobacter-infected Japanese men and women for a period of eight weeks. Using tests on the breath, serum and stool of participants, researchers evaluated the severity of H. Pylori infection at the start of the study. Eight weeks later, infection levels were lower on all three measures among those patients who had eaten broccoli sprouts, while they remained identical for patients who had eaten alfalfa sprouts.
UPFRONT NGP EU7:nov08
FRONTLINE COMPANY INDEX
ROMANIAN SALES UP
THE UK GOVERNMENT’S new health and social care regulator is to draft a risk profile for every GP practice so that it can identify poor or possibly dangerous GPs. The Care Quality Commission, which took on regulatory responsibili-
ty on 1 April, plans to evaluate practices using a tool based on substandard performance indicators. Risk scores would be based on a range of data, including total numbers of complaints, surveys of staff and patients and the commission’s inspections of GP practices.
ZENTIVA, the Czech drugmaker owned by sanofi-aventis, reported a doubling in sales in the third quarter of 2008, compared to the same period last year. Between January to September, the company recorded a two percent increase in its net sales reported in local currency. “The favourable evolution of Zentiva’s sales in Romania directly reflects the reconsolidation of our local operations and the positive impact of the changes in strategy initiated in the last year. These changes are aimed at refocusing our efforts from securing market share to optimising working capital, improving cost efficiency and financial profitability,” said Dragos Damian, General Manager, Zentiva.
COMPANY INDEX Q2 2009 Companies in this issue are indexed to the first page of the article in which each is mentioned. ABB Aesica Pharmaceuticals Ltd Alternatives Technologie Amgen Anabase Applied Biosystems Arvato Services Healthcare Bayer Best Manufacturing Bio-Rad Laboratories Biovista Inc BSM Consulting Bürkert Cabernet Pharmaceuticals Inc Cisbio Bioassays Créapharm Definiens AG Dividella Dragenopharm Duke University FedEx Fine Organics Ltd Frost & Sullivan Genentech Geodis Wilson GlaxoSmithKline Grace Davison
15, 66 72 83, 85 92 95 6, 96, 97 81 54 46 124, 125 112, 113 19, 151 43 116 128, 129 14, 69 106, 107 50, 51 22, 23 116 11 72 28, 142 28 52, 53 86 14, 57
Genostar Grindeks Hamilton Human Productivity IMS Health Innovex Lodestone Melior Discovery Inc Merck & Co Merck Serono Metastorm MHRA Millennium MPI Research NEPIC Novartis Oystar Pharmaflow Ltd Pfizer Piramal Healthcare Pricewaterhouse Coopers Randox Rechon Life Science Rescentris Restek Corporation Roche Roche Diagnostics
2, 105 58, 59 16, 17 148 144 IFC, 138, 140 49 134, 135 28 34 98, 99 126 136 130, 131, IBC 72, 75 64, 76 25 59, 60 28, 44, 126 72 28 132, 133 59, 63 114, 115 100, 101 28 118, 119
Roche NimbleGen SCA Cool Logistics sellxpert GmbH Schering-Plough Sensitech Shasun Pharma Solutions Ltd Shire Siemens Singulex STARLIMS Corporation Stratx TeraDisc Thermo Fisher Scientific Waters Wyeth
122, 123 8, 82, 83 146, 147 28 78 72 40 70, 71 120, 121 109, 111 27 4, 108, 109 32, 38 90, 91, OBC 28, 102
COVER STORY v2:apr09 08/04/2009 13:41 Page 28
his should be a good time for big pharma. The purchase of prescription drugs is usually non-discretionary – people need their medicines – and in the US, backed by insurance. Many companies have large cash reserves, which should be enough to see them through the downturn. Some companies do seem to be doing all right. In January, Swiss drugmaker Novartis reported a 25 percent jump in 2008 net profit and forecasted a record year for 2009. Novartis said its profit had reached €6.2 billion and that sales had increased nine percent last year, driven by vaccines, diagnostics and consumer health products, and a revival in its core pharmaceutical business. The company also boasts the largest cash reserves among the big players – €11.4 billion. US-based Merck & Co. also beat profit expectations when it announced in February that it had earned €1.65 billion in the final quarter of 2008. However, this was not achieved through increased sales – in fact, the revenue from two of the company’s top drugs, Zetia and Vytorin, fell by 26 percent after questions were raised about their effectiveness, and overall revenue fell from €4.7 billion to €4.57 billion. Instead, Merck shored up its profits by eliminating more than 10,000 jobs in the last three years, and it has said it will cut 7200 more by 2011. UK-based GSK cut 850 research jobs last year as part of a restructuring plan that began in 2007, and in February, the company warned that it
might be forced to cut its workforce further in an effort to reduce costs by €2 billion a year over the next two years. At the same time, AstraZeneca said it would cut 6000 jobs, and 20,000 jobs are also due to go in Pfizer’s merger with Wyeth.
Cut your losses Many of these job cuts involve US companies. So what’s going to happen in Europe? Will we feel similar effects of the downturn? According to Jo Pisani, a partner in PricewaterhouseCoopers Strategy’s pharma group, we have at least one advantage: it’s harder to cut jobs in Europe than it is in the US. “It’s easier to lay people off in the US because of the nature of the employment contract, and then the next easiest would be somewhere like the UK,” Pisani says. “In countries like France, Germany and Belgium it’s more difficult, because of stronger unions and the period of consultation involved. Unfortunately at the moment, distressed companies will go for the countries where it’s easy to downsize first.” Pisani also points out that many companies are spinning off their non-core activities. “This is part of a general shift within pharma to a business model of focusing on core therapeutic areas. For instance, Pfizer recently came up with a business unit structure where it’s got six core business units and is actively out-licensing 100 compounds that don’t fit
K N I S
The global financial crisis has prompted a rash of mergers, consolidations and layoffs in the pharmaceutical sector. How will the European industry stay afloat in these challenging times? By Marie Shields
COVER STORY v2:apr09 08/04/2009 13:41 Page 29
its therapeutic area focus. Similarly, AstraZeneca early last year sold off its cardiovascular franchise to a joint consortium of private equity and venture capital.” As many of those non-core activities happen to be based outside of the US, this could mean a boost for non-American specialist companies. Downsizing, outsourcing, restructuring: these are the kinds of things that go on all the time in any industry, especially one facing the challenges of patent expiries and the death knell of its main cash cow, the blockbuster. It’s hard to tell how much of the recent activity in the pharmaceutical sector is a reaction to the financial downturn, and how much would have happened anyway. One thing that does seem to have been prompted by the credit crunch is the sudden vogue for mergers. The big news in January was Pfizer’s €52 billion acquisition of Wyeth, which will give it access to its rival’s vaccines, and consumer health and animal products. The move was widely seen as an attempt to boost Pfizer’s pipeline in advance of Lipitor – the cholesterol drug that made the company nearly €9 billion last year – losing patent protection in the US in 2011. In all, 38 percent of Pfizer’s current sales will face competition from generics by 2013. The merger will create a massive player in the industry, creating a company with more than 15 products with €750 million each in annual revenue, allowing it to move away from its dependence on blockbusters. In March, Merck & Co. agreed to buy Schering-Plough for €31 billion,
in order to extend its pipeline and diversify its portfolio, while Swiss-based Roche finally took control of Genentech in a deal that valued the US biotechnology company at €35 billion. Both of these deals are interesting, for different reasons. The Merck/Schering buyout will be enacted through a reverse merger, with Schering, renamed Merck, remaining as the surviving public company. The reason for this rather complex manoeuvre seems to be aimed at avoiding the loss of the rights to Remicade, a lucrative rheumatoid arthritis drug that Schering markets internationally under a joint agreement with Johnson & Johnson. Then there’s the ongoing saga of Roche/Genentech. The two companies have been linked since the 1980s, when Genentech licensed one of its first drugs to Roche. In 1990, Roche and Genentech merged, with Roche acquiring 60 percent of its smaller rival’s shares. At the time, it purchased an option to buy the remaining shares at a pre-set price – an option it exercised nine years later. Roche then brought Genentech back into the market twice in the next year, keeping a 58 percent stake in the company. Roche eventually agreed to pay the equivalent of €35 billion – or €72 per share – for the cancer treatment specialist, which represents a premium of 26 per cent above Genentech’s closing share price at the time. The price is well above the €67 a share that Roche initially bid.
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Old news Mergers and acquisitions in the pharmaceutical industry are not new, and we probably haven’t seen the last of them. In the opinion of Shabeer Hussain, Program Leader in Pharmaceuticals for Frost & Sullivan, “Plagued with R&D challenges, patent expiries, generic competition and high drug attrition rates, pharmaceutical companies have resorted to various crisis management strategies to stay afloat during trying times. One of these strategies is M&A activities. With Pfizer taking a strong and bold step in this direction, there may be other companies to follow.” AstraZeneca, Eli Lilly & Co., GSK, Novartis, Pfizer and sanofi-aventis all have patents on major drugs due to expire in the next three years. Wyeth, so eagerly snapped up by Pfizer, faces a tricky situation of its own. Its two biggest selling drugs, Effexor for depression and Protonix for heartburn, will lose patent protection in 2010 and 2011. In addition, generic erosion is predicted to knock between two percent and 40 percent off the revenues of the top 10 companies between now and 2015. One strategy for coping with this massive loss of income is that exemplified by the Pfizer/Wyeth deal: swallow up your rivals, slim them down by radically cutting staff, and take over their pipelines in the hope that, even if they don’t produce the next blockbuster, you will at least add some diversity to your portfolio and gain enough to prop up your bottom line in the short term. The crucial phrase is ‘bottom line’. Such mergers are often nothing more than a quick fix, aimed at making companies look good for shareholders and investors. But how well does this work? When news of the Pfizer/Wyeth merger broke, many analysts and industry leaders were skeptical. Michael Rainey of Accenture commented that nine out of 10 of such big deals created no value or negative value. Bain’s Charles Farkas called
the deal a half step forward: “Wyeth’s assets will buy Pfizer some time but will not be enough to replenish its research pipeline or replace Lipitor.” PwC’s Jo Pisani argues that: “It should be more about creative collaboration and strategic collaboration than mergers. McKinsey research has shown that 60 percent of mergers and acquisitions don’t create value. Add to that the period of paralysis that companies often go through while the deal’s uncertain, a lot of those big deals won’t close for another six months. “Against that backdrop, though, you’ve got the fact that pharma has an awful lot of cash – there was an FT article a few months ago that said the top companies have something like $100 billion (€76 billion) between them all. And then you had the Pfizer/Wyeth deal in which they put up $22 billion (€16.6 billion) in cash, and the rest they raised through financing. It’s a quick fix solution: if you have the cash, you can suddenly buy a pipeline or buy your entry into biologics.” As Shabeer Hussain points out, “As blockbusters fall off patent, organic growth has witnessed major hits. Pharma companies have resorted to inorganic growth through M&A. However, this growth cannot form a sustainable business model for long. This is a stop-gap arrangement, to satisfy investors. “Though Wyeth’s Prevnar and Enbrel are expected to benefit Pfizer by softening the loss incurred due to the Lipitor patent expiry, the deal may not add the expected value as imagined by Pfizer. This expensive acquisition is unlikely to bring in great dividends. In fact, expanding the business will make it even more difficult for Pfizer to handle its enormous empire. Growing a huge business of that size is a tall order.”
Generic erosion will knock between 2 and 40 percent off the revenues of the top 10 companies between now and 2015
COMPANIES WITH THE
Like attracts like
So far, much of the merger action has been confined to the USbased pharma giants. Is this a geographical trend, or can we expect to see more of the same on this side of the Atlantic? Jo Pisani believes it’s a question of cultural fit. “Pfizer and Wyeth have a simBIGGEST CASH RESERVES ilar sort of culture, and that would be the same if you had European to European consolidation. Many people are saying Novartis that GSK must buy AstraZeneca, that it has to be the next one. €11.4 billion It would make sense because they are culturally similar, plus there would be synergies in smashing together the two head ofRoche fices in the UK.” Pisani believes that cross-continental consoli€10 billion dations are less likely – the Roche/Genentech deal being the obvious exception. Another interesting difference between US-based and Johnson & Johnson European-based pharmacetuical companies is that several of the €9.7 billion European companies are family-owned rather than publicly quoted. German company Boehringer Ingelheim, the number 15 comMerck & Co. pany in the world, is one of these. In a previous conversation with €7.5 billion Andreas Barner, Boehringer’s Vice Chairman, he said, “It allows us to be more stable. We are less affected by the stock market, GlaxoSmithKline very obviously, and can continue to follow our long-term vision.” €7 billion Barner isn’t exaggerating: Boehringer has invested €1.73 billion in research and development in the last year, adding 400
COVER STORY v2:apr09 08/04/2009 13:41 Page 31
new employees, to bring its global headcount in R&D to 6400 people, in a time when other companies are cutting back. One of Boehringer’s German competitors is also majority privately owned: 30 percent of Merck KGaA’s total capital is publicly traded, while the Merck family owns an interest of about 70 percent. Bernhard Kirschbaum, Executive Vice President of R&D for Merck Serono, the pharmaceutical arm of Merck KGaA, points out that, “It means we don’t have to look every day, every minute at the stock price; instead we can think in somewhat longer periods. The Merck family has invested a lot in this company. It’s not like with some other families who might invest here and there and when the one business suffers they pull their money out and put it into something else. That’s not the case with us, which brings additional stability.” Jo Pisani confirms this. “It does help to insulate them from the flucuations in the market. Certainly you haven’t seen many of those privately held companies become as distressed as the others. And if you look at the strategies they’re pursuing, they have a lot more freedom.” Of course, being family owned can go wrong as well. Witness German billionaire Adolf Merckle, who threw himself under a train in January, after losing billions speculating on the stock market. Merckle had taken over his grandfather's business, creating Phoenix Pharmahandel, Germany's largest drug wholesaler, and starting generic drug maker Ratiopharm.
One other change in the financial markets that has affected pharmaceutical companies is the loss of private equity investors. When credit was really available, such investors could raise as much as €75 billion, which meant that even the top pharmaceutical companies were within their sights. But the current conditions have left those players unable to raise debt, which has cut off a potential exit route or source of capital for organic growth for pharma companies.
Bad for research Whichever way you slice it – mergers, layoffs, spinning off elements of the business – none of these do anything to drive the engine that has kept the industry going for decades, innovation in research. Mergers, for example, usually result in bigger companies with more layers of management, something that tends to stifle research, rather than encourage it. Says Shabeer Hussain, “Innovation is not the primary focus at the moment, and these activities are just crisis management measures. Such short-term arrangements enhance their stock prices and are purely business-oriented, not innovation-oriented.” According to the latest PwC report, Pharma 2020, Virtual R&D, Which path will you take?, this ‘innovation deficit’ has enormous strategic implications for the industry as a whole: “Pharmaceutical companies need to decide what they want to concentrate on doing and identify the core competencies they will require, a process which may involve exiting from some parts of research and development. “But even those that regard research and development as a core element of their business will have to make fundamental alterations in the way they work. They may, for example, have to focus more heavily on specialty therapies, since most of the diseases for which there are currently no effective medications or cures are not amenable to mass-market treatments, as well as reducing the time and costs involved in researching and developing such medicines to ensure that society can afford them.” The truth is, no matter how much the public loves to hate big pharma – much as we love to hate any powerful industry with a major impact on our lives – the world needs the pharmaceutical industry. Without the innovative research and development it funds and carries out, many serious diseases would remain untreated. So what’s the answer? Companies – whatever side of the Atlantic they find themselves on – need to take a different approach. Instead of gorging themselves on their rivals, then going on a ruthless job-cutting purge, they need to slim down from within, stay focused on vital research, find themselves a niche. Accept that the days of big blockbusters are over. Build a portfolio of mid-performers – then if they lose one drug to generic competition, it won’t smash a meteor-sized hole in their profits. Smart companies, the lucky ones with strong enough cash flows to ride out the recession, will target emerging markets or focus on core competencies or rare conditions with high unmet need. Combined with the stability afforded by private ownership, this could mean that the European pharmaceutical sector will emerge from the financial downturn relatively unscathed. n
Thermo Fisher Scientific:13sept
Enterprise level LIMS â€“ reaping the benefits of integration
ith drug development times of approximately 15 years and subsequent costs approaching $2 billion by 2010, pharmaceutical companies are increasingly in search of processes that can help them consistently deliver a return on investment during the patent life of a drug. Enterprise level laboratory information management systems (LIMS) are key contributors in this effort. Delivering advanced functionality that is specific to each stage of the drug development process, sophisticated, purpose-built LIMS streamline processes and costs and present organisations with unique integration opportunities. These LIMS provide superior capabilities by delivering real-time analysis and reports, facilitating regulatory compliance and product quality, integrating with the companyâ€™s broader network and providing secure access to key data throughout the organisation. Thermo Fisher Scientific, the world leader in serving science, has developed a portfolio of LIMS that meet the needs of our customers. This is particularly true in the Life Science market where laboratory requirements are unique in research and development, discovery, and manufacturing. There is no single system that could answer the unique needs of these laboratories so our position has been to develop, with the help of our customers, purpose-built LIMS for each area of the pharmaceutical value chain.
Generic LIMS Historically, industry standard LIMS have only delivered 30-40 percent of specific functionality targeted to each userâ€™s needs, requiring extensive customisation to make that LIMS function in that particular setting. Such customisation is commonly only possible through the use of proprietary programming languages that are developed and provided by the LIMS vendor. The combination of minimal industry-specific functionality and often out-dated and/or costly proprietary languages has been particularly troublesome in the pharmaceutical industry. In
addition, pharmaceutical laboratories normally create their own user documentation, design documentation, validation scripts and help files. As a consequence, the implementation of LIMS in various laboratory settings has been, almost without exception, a long, costly and painful process not only during installation, but also in operating and maintaining the system over the years. The growing mandates of global regulatory compliance and long-term data traceability, as well as the complexity of laboratory testing and emphasis on batch versus sample management, have forced pharmaceutical manufacturers into lengthy, expensive adaptations of generic LIMS to meet their specific requirements. Extensive and costly customisation, validation and implementation periods, in many cases lasting 36 months or more, have become routine, resulting in decreased productivity. However, with the increasingly higher costs of bringing a new drug to market, pharmaceutical manu-
facturers cannot afford delaying the implementation of next generation tools that will make them more productive.
Generic LIMS shortcomings At Thermo Fisher Scientific, we believe that the challenges facing life science companies can be ideally addressed using purpose-built solutions that provide as much application-specific functionality as possible out-of-the-box to meet the particular needs of various laboratories. When the required functionality is built into the base system as standard, it eliminates the need for user-specific customisations during implementation. This, in turn, results in reduced validation time, shortened deployment and easier ongoing support. Thermo Fisher Scientific has developed Darwin LIMS, a fully validated laboratory and data management system that is being successfully implemented worldwide by many of the largest pharmaceutical manufacturers. Darwin
Thermo Fisher Scientific:13sept
LIMS is a clear example of how the benefits of purpose-built LIMS solutions can be found in pharmaceutical manufacturing. Darwin LIMS is specifically designed to address, out-of-the-box, the unique needs of pharmaceutical manufacturing R&D and QA/QC laboratories to help them meet US Food and Drug Administration (FDA) regulations, achieve significant time savings in validation efforts and generate cost savings in personnel and production time. Darwin’s unique batch and product-oriented design aligns directly with the pharmaceutical manufacturing processes, allowing production data to be logically organised, summarised and reported. Darwin LIMS also includes built-in, dashboard-ready functionality to allow pharmaceutical laboratory managers to make faster, more informed decisions. The system’s user-friendly, intuitive Microsoft-compatible interface facilitates end-user acceptance and support for process modification as part of standardisation. In addition, Darwin LIMS contains an environmental monitoring module as standard, facilitating product quality monitoring and compliance. Further standard functionality includes dissolution, stability testing and product and batch management.
LIMS into the enterprise According to the 2008 strategic analysis of the US Laboratory Information Management Systems Market by Frost & Sullivan, market growth indicators are focused on providing customers with not only purpose-built LIMS that are fully integrated with other laboratory equipment, but also LIMS that easily align with global enterprise solutions. In addition, preconfigured solutions with test methods for specified industries will drive growth across all markets. Today, global deployments of LIMS solutions have become more consistent and more rapid. The implementation of purpose-built LIMS across the enterprise allows for more simplified system upgrades, minimised project risks and enhanced compliance. In addition, industry-specific solutions facilitate enterprise-wide application and training. These multifaceted benefits help lower the total cost of ownership of the solution, which is critical to pharmaceutical companies that are under ever-increasing pressures to contain costs and increase efficiency. This goal
can be achieved by integrating the LIMS with instrumentation and enterprise systems, which can facilitate the global harmonisation of business processes, automation of operations and consolidation of data management in a single system allowing for near-instant decision-making.
out the enterprise, providing both the integration of instruments and systems, and the interoperability necessary to transform data into relevant business drivers. Thermo Fisher’s 25 years of integrating laboratory informatics with the enterprise has been built and strengthened by its ongoing partnership with industry leaders such as Microsoft, Oracle, NextDocs and Symyx, as well as with members of our Global Partner Alliance programme. With Connects, we bring a strategic vision and the resources to help facilitate management level discussion about the necessity of integrating the various sources of data; including laboratory and related instrumentation, enterprise systems (like MES, PIMS and ERP) and enterprise communication tools (like SharePoint, BizTalk and document management systems), thereby elevating the role of the laboratory in the day-to-day mission critical decisions required of management throughout the enterprise.
Conclusion Dave Champagne was named Vice President and General Manager of Thermo Fisher Scientific’s Informatics business in April 2005. Prior to joining Thermo, he was President and CEO of ProActivity Software, an early stage venture that provides business process analysis solutions. Earlier, he was President and CEO of UPSPRING Software, a development tools vendor, before it was acquired by MKS.
In response to market growth indicators, Thermo Fisher Scientific has introduced a new informatics initiative aimed at bridging the gap between laboratory-generated data and the enterprise level information that is required for mission critical management decisions. Because of the breadth of our company’s product offerings and our strategic partnerships, we are uniquely positioned to offer Thermo Scientific Connects, an enterprise-level solution set that allows companies to more fully integrate the work of the laboratory into the enterprise. Connects enables our customers to extend the business of science from the laboratory through-
At Thermo Fisher, we have an opportunity to leverage our expertise, people and products to help our customers now respond with more certainty to the many unforeseen challenges that can often make or break a company. We believe it’s within our power and our responsibility to lead the market in transforming laboratory data into the most relevant business drivers for those companies committed to the advancement and integrity of science, and to the health and safety of the world we live in. Enterprise-level integration is particularly relevant in today’s business climate where near instantaneous response is required by life science companies to protect the public and the environment. With Connects, our goal is to help bring key business knowledge originating in the laboratory to management at all levels of the enterprise. The integration of the entire enterprise will facilitate better data correlation and collaboration, end-to-end report generation and more secure data exchanges, with the goal of providing management with a dashboard view of the key business metrics essential to running the business, and enabling management to have the critical data they need before, not after, any point of crisis. For more information about Thermo Scientific informatics solutions, please visit www.thermo.com/informatics.
THE BIG INTERVIEW
The global pharmaceutical industry is facing some tough challenges at the moment: patent expiries, a lack of new blockbusters, and now the ongoing crisis in the financial markets. But Merck Serono’s Bernhard Kirschbaum isn’t too worried, as he tells NGP’s Marie Shields.
uch has been written about the difficult situation in which the US pharmaceutical industry finds itself, with several of the bigger companies merging and cutting jobs, but what’s happening here in Europe? For Merck Serono at least, the outlook is not all bad. When asked if the financial downturn will force the company to downsize its R&D staff, Bernhard Kirschbaum, Executive Vice President of Research and Development for Merck Serono, says, “No, I don’t see that we will have to cut jobs. We are in a more comfortable situation than many of our bigger competitors who face big challenges with patent expiries. We don’t have significant patent expiries in the near future, giving us time to bring new drugs to market, and creating a completely different dynamic than the one that exists in companies who are under pressure. “We see a significant opportunity to build and create the right momentum and so there is no talk of job cuts. On the contrary, we are further building our R&D capabilities, particularly in the new core areas that we have announced.”
Staying in focus The core areas that Kirschbaum is referring to are oncology, autoimmune and inflammatory diseases and neurodegenerative diseases. “These are our focus areas,” he says.“At the same time we want to maintain our leadership around the growth hormone and fertility business. But in terms of research efforts, we’re doing less research for the two latter areas. Until we find cures or better protection for cancer, there will be a medical need because there are still many people dying, and many cancers are not very treatable and we are far away from cures.”
“We have a strong commitment to and a very nice portfolio in oncology, where we are approaching the indications from different angles, attacking tumor cells themselves, the tumor environment and the immune system. “Then we have neurodegenerative diseases like Parkinson’s and Alzheimer’s, where there’s currently only symptomatic treatment. These are devastating diseases and an increasing burden for an aging population. The whole industry, including ourselves, is looking for disease-modifying agents that are able to at least postpone the onset or the progression of these diseases. That would have a huge impact on the individual patient and also on society, if you think about the explosion of the cost and the burden associated with the aging population.
stead we can think in somewhat longer periods. I did live through this during my time at Aventis, when you always had to look at the stock market and to sometimes make short-term decisions that were not absolutely in line with regard to long-term requirements. “This does not mean we are not ambitious, and it doesn’t mean we don’t have a lot of pressure and want to bring things forward and not lose any time. But in our setting, there is no need to do something that helps in the short term but which in the long term would be a mistake. “The Merck family has invested a lot in this company, not just money. It’s not like with some other families who might invest here and there and when the one business suffers they pull their money out and put it into something else. That’s not the case with us, which brings additional stability. We also have both the chemicals and the pharmaceuticals business sectors and this helps us to balance things out. There are times when the pharma business profits from the chemistry business and there are times, such as right now, where the chemistry business profits from the pharma business.” Another benefit that Kirschbaum finds in working at Merck Serono is the opportunity to work in networks rather than silos. This is part of the reason he chose the company as the next step in his career. “I chose an organisation with an open and active mindset, which you particularly need in the early phase of drug development, because you can’t do it all on your own. The world has changed so dramatically that you could be as big as you wish as a company, and you will still need help. You still need the networks and the access to experts externally.” Kirschbaum has worked in New York, Paris and Germany. He believes it’s important, both for him personally and also as a leader in a global company, to be exposed to different cultures and nationalities. “I’ve always enjoyed that interaction,” he says. “I found each of those places extremely enjoyable, whether it was the Lake Constance region with many
“The combination of what the consumers want, what the health agencies want and the discussion around pricing will lead to more stratified approaches to medicine” “And of course one of our big areas is multiple sclerosis, where despite the fact that there are great drugs, there’s still a need for higher efficacy and for more convenience, which would then allow better compliance, more continuity, less frequent injections and less painful or oral alternatives that are efficacious and safe. With cladribine tablets and their favourable results from the phase III CLARITY study, we have the opportunity to serve patients with a new oral alternative.” Kirschbaum points out that with rheumatology and autoimmune diseases in general, and even in rheumatoid arthritis, there are still researchers looking desperately for effective, new, safe alternatives. He says it’s a tough task to become curative, and this is even more true for other autoimmune diseases such as inflammatory bowel disease. Merck Serono has a very exciting compound in the context of rheumatology: “We are engaged in osteoarthritis and we think with one of our compounds, FGF18, we indeed have a compound that may become the first disease-modifying agent. Here again we have a disease that affects regeneration of the joints and hits many people, 10 times more than RA in terms of prevalence. You have the surgery, the knee and hip replacement and otherwise you’d give painkillers but that’s often more counterproductive than beneficial. “It’s ambitious because many companies have tried. We have a very attractive mechanism with the fibroblast growth factor 18 that targets the articular cartilage and stimulates it to grow. It would be wonderful for the patients to find something that would be disease-modifying.”
Family values The ability to continue with these important areas of research depends to some extent on a stable working environment. One factor that helps Merck Serono provide this stability is the fact that it is a familyowned company. “This gives us a lot of confidence for the future,” says Kirschbaum. “It means we don’t have to look every day, every minute at the stock price; in-
Bernhard Kirschbaum is Executive Vice President of Research and Development for Merck Serono, and a member of its Executive Management Board. Kirschbaum joined Merck KGaA in 2005 and was previously Vice President in Pre-clinical R&D and Head of Global Technologies. Prior to joining Merck, Kirschbaum was Vice President Discovery Research for sanofi-aventis. He has also worked for Aventis and Hoechst Marion Roussel in various senior positions, and headed the Centre of Applied Genomics in Martinsried.
opportunities for outdoor activities, or somewhere like New York, where you can combine a tough academic environment and a high workload with the best quality entertainment options. And then there was Paris, which was perfect both with regard to my work at the Pasteur Institute and my private life, with a home in the Quartier Latin. “The toughest part of all those changes was the step into industry, because for industry I exchanged the espresso at noon in a nice Parisian café with the canteen next to the chemical plant. But what I learned in all these different situations was that I had to approach each with the attitude that, independently of how it turned it, it would be an important experience for me that I would profit from in one way or another. This attitude has made me quite relaxed in approaching challenges.” In terms of the differences between the academic world and the world of big pharma, Kirschbaum says that as a young scientist, it’s extremely rewarding if you are associated with a compound that makes it through development. “There was one compound that I accompanied to the market
at the beginning of my career and that was just a great experience and a huge learning curve. This was one of the reasons why I have stayed in the industry, because the experience is so manifold and so broad.”
Changing times Rheumatic and autoimmune disease research has been through many changes since Kirschbaum started working in the area in the mid1990s. “Then, methotrexate was the generic standard therapy. There were some other drugs that showed efficacy – they had serious side effects, but they were cheap, and you needed to beat this type of efficacy. During this period several oral compounds were profiled at the same time as injectibles such as the anti-TNF treatments, which completely changed the environment. “The development during the past decade has been dramatic. It was interesting to see such a field where people were on the one hand anxious to treat the pain and on the other hand there were cheap generic com-
pounds available and you had to decide if it was worth the effort of embarking on further work. There were already treatment options but there was – and still is – medical need in this area. For example, there are people who are not able to stay on a certain therapy because at some point they can’t simply stand it any longer, and they need other options.” Merck Serono’s current pipeline includes Erbitux, which according to Kirschbaum is becoming an important standard in oncology. “It’s certainly an important pillar for us to build our oncology portfolio around. We are continuing to look into alternative indications where Erbitux may be beneficial.” “In oncology, it’s very important to have combinations of drugs that work together to bring an improvement. This was a significant breakthrough in colorectal cancer. If this cancer gets reduced to a level where the metastasis can be completely resected, this provides the chance for a cure. The combination of Erbitux treatment with subsequent surgery can be beneficial. If you have a patient for whom surgery is not an option because it is not resectable and you can bring it down to a level where it becomes resectable, then this is a significant additional benefit.” In addition to Erbitux, Merck Serono has several promising compounds in later stage development for various cancers. These include cilengitide, a peptide-like integrin inhibitor which acts as an antiangiogenic agent, and Stimuvax, for non-small cell lung cancer, which Kirschbaum says could be extremely exciting in the development of a vaccine for cancer. “It would be the first successful vaccine for cancer. Of course the verdict is still out as to whether it will work in a larger patient population,” Kirschbaum explains. “That’s to be tested now in phase III.” Biomarkers remain an important element in the company’s cancer research. “Each of our trials has an association with a biomarker,” Kirschbaum explains. “With many of our products, we either associate them with certain markers or we associate them with single nucleotide polymorphisms. As a midsized company, we are in a better position to tackle this than the big pharma companies, who may worry about losing market share. “The combination of what the consumers want, what the health agencies want and the discussion around pricing will inevitably lead us to more stratified approaches to medicine. Those companies who embark on this early on will have set a standard and also will have the chance to create more credibility in the community because you can say, ‘I won’t give it to people who have no chance to benefit from it, but I can stratify the population.’ Of course we can never be 100 percent sure, but we can stratify it in a way that those people who take the compound have a better chance of benefiting. This is a very ethical thing to do, which we have an obligation to engage in. “We also have compounds for various autoimmune diseases in the pipeline. A compound called atacicept is being investigated in several different areas such as RA, lupus and MS. This is a compound that neutralises Bcell growth factors and therefore controls B-cell response. There is FGF18 for osteoarthritis, which is in early clinical development. We still have a long way to go but we are really excited about this compound. It could even have company-transforming potential if it is successful. “In addition to such diseases, we are tackling rare diseases such as inherited phenylketonuria. Our compound Kuvan, which provides the first therapy for this rare disease, has recently been approved in the European Union. It may not be the ultimate blockbuster, but if you have the chance to bring this type of treatment to the patient, you should do it.”
Ramping up Merck Serono recently announced a $50 million expansion of its facility in Billerica, near Boston, Massachusetts. As a primarily Europeanbased company, Merck Serono is looking to build up significant presence in the US. “Historically we had two sites in the US – one from Merck and one from Serono – and we said that we need to bring those people together and we are willing to invest in a nice campus there. We brought the discovery research campus together with our technical operations facilities at a site where there is the potential for further expansion eventually if we decide to invest more. “We want to create these hubs, not only to ensure a fully integrated group of people that covers the value chain, but also in terms of having good local interactions with excellent partners in academia and biotech. Boston is a very good place to do this. We have a significant group there that works on oncology, and again it’s important that they are embedded in the local networks. And we have our endocrinology, our growth hormone and our fertility approaches located there. “There’s a lot of excitement over in Boston. We have just been ranked in the top 10 of biotech employers by Science magazine, and we have an all-time low attrition rate in research in the Boston area. It has always been double digit before and now we are well in the single digits, and that’s a great achievement, especially if you remember that we just formed Merck Serono two years ago. There’s a remarkable stability and loyalty there, which you usually don’t see in these US regions with heavy pharma presence.” The emphasis on networks rather than silos also helps to create an R&D continuum. Kirschbaum says that whenever you make a surgical cut between research and development, you end up with silos where people don’t interact very effectively. “We have created a structure where people are interacting much more. They are encouraged both by the structure and by management to interact, and we are seeing good progress in this. As one of the most recent activities in this area, we have merged the research and development departments into one function, headed by myself. It is a big advantage to have everybody around one table. “We are also developing relationships with university clinics and other external partners that could be involved in early clinical development. We have interesting models in Boston, the Rhine-Main-Neckar area in Germany and also in Geneva – for example, with the University of Lausanne. It’s time to try new models, and the different partners involved are much more open to this. The stratified medicine approach also calls for these types of interactions. You need to build these things very early in your approach, because otherwise you lose a lot of time and risk not bringing your compound to the patient.” In the end it comes down to commitment and a willingness to excel during times of change, both of which Kirschbaum and his company seem to have in spades. “There is a very strong commitment to innovation. We are currently spending €1 billion on R&D every year, which is more than 20 percent of Merck Serono’s total revenues. This also shows if you look at the recent investments we have made in new technologies that could bring new drug-like molecules to the market.” It certainly sounds as if Merck Serono is well placed to ride out the financial downturn, and emerge successful on the other side.
FROM THE CROWD
Mike Cola and Sylvie Grégoire of Shire Pharmaceuticals explain why being different is increasingly important in the dark days of economic recession. By Natalie Brandweiner
ith the state of the pharmaceutical industry beginning to reflect that of the financial markets, we are starting to see big drug companies buying out those unable to maintain a respectable share price. In a multi-billion dollar industry, differentiation from competitors is key to keeping one’s head above water, and Shire’s entire corporate structure is based upon this principle. In a bid to stay competitive in the trend of large pharma company buyouts, Shire has adopted a strategy that sets it apart. “We’re a highly specialised business in that we focus on diseases that are very rare and have a very high unmet meet,” explains Sylvie Grégoire, President of Human Genetic Therapies. “Our populations qualify as orphan, which confers a certain protection in terms of intellectual property from the governments in the US, Japan and Europe. “Our portfolio of products in the Human GeneticTherapies business focuses on the very rare end of the orphan diseases: the target populations we treat arebetween2000and3000.Whatthatmeansisthatthedevelopmentprograms inordertobe able to bring products to the market have to be globalin nature because when I say 2000, I mean 2000 patients worldwide,” explains Grégoire.
By focusing on a niche area of patient care, Shire must search the world to find patients to complete its clinical studies, and as a result must operate in over 43 countries to create a viable business model. Commercialisation of product is very important to completing the model; the success of such a strategy can be seen in two of the company’s currently marketed products, Elaprase and Replagal,which are usedin over43 countriesas enzymereplacementtherapies.
“This year we anticipate doing a little over €1.5 billion in revenue out of our Specialty Pharma business” Mike Cola This business strategy has not necessarily been a safe one, but the choice to develop and bring products to the market in such a way has ultimately generated sufficient profits, despite the higher price of such products and the rarity of patients available for treatment. “Governments and
of those business units we have sales forces fairly well aligned. These units try to run as semi-autonomous companies within a company focused very much on the needs of the specialist physician, which is very similar to the model in our Human Genetic Therapies business that Sylvie oversees. Within the ADHD area, our lead product is Vyvanse, which we launched about 18 months ago and it is growing nicely. We think it will be the market New products leader over time.” Shire’s aim is to introduce eight new products to such rare disease popEPU is the side of the business that allows the company to become ulations by 2015, which it hopes will bring in €1.1 billion in revenue. The more commercial. “We haven’t talked a lot it, but we have a number of company’s expansion is due to the strategic reinvestment of this revenue Carrierwave initiatives under way. Carrierwave is into new drug development. As a big fish in a relaa technology that was acquired in our 2007 actively small pond, Grégoire believes focusing on a quisition of New River Pharmaceuticals. It came niche market will benefit the company, in comparalong with Vyvanse and we’re discovering ways ison to the approach of larger, more generic, pharto apply that technology. We hope to be able to ma companies. share more about it by the middle of 2009. “Those life-changing products are the rev“Overall the consistency between the two enue generators, but they also provide hope for businesses is there. We leverage the same those with rare and dire diseases, and that really model and the same principles, they’re just a litmotivates our team, who come to work every day tle bit different as far as size and scale. This year with the hope of helping and transforming families’ we anticipate doing a little over €1.5 billion in lives as well as the patients’ lives.” revenue out of our Specialty Pharma business However, producing drugs with such high-proand we’ll drop somewhere in the neighborhood file capabilities brings with it both challenges and of €75 million to our overall bottom line. So our responsibilities. “It’s a highly specialised area, but Specialty Pharma unit is a growing business,” within our human genetic therapies business we’ve says Cola.” developed the internal capabilities to counter this. Mike Cola is President of You can leverage those capabilities in terms of Specialty Pharmaceuticals Survival both the clinical development of the products and As a specialised pharma company with a the commercial infrastructure you have. Once much smaller sales force and very few patented you’ve done it with success with one product, you products, it’s certainly going to be easier for can leverage the know-how as well as the capabilShire than for the larger and more generic pharities to add products to that particular model, as ma companies to survive the current challenges, opposed to being in multiple therapeutic areas. given the financial markets. “It doesn’t matter whether the specific thera“Beyond Adderall XR, we do not have a lot peutic areas are cardiovascular or GI. Generally, of patent exposure. If you look at the IP of our these patients with rare genetic diseases have current products it goes out very far into the multi-organ system problems, so it’s a general way 2023-2024 range,” explains Cola. of developing multi-organ disease expertise, and “If you look at all our diseases they’re highwe can leverage that know-how internally. Clearly, ly symptomatic. We create tremendous value a very good understanding of the regulatory apfor the patient. If these patients don’t have proval process, as well of as pricing and reimtheir medication they will feel the difference bursement, in all of these countries is key,” quickly, as opposed to an asymptomatic drug explains Grégoire. Sylvie Grégoire is President of lowering your cholesterol or even your blood Human Genetic Therapies Wider range pressure, where you may not notice it for a long Product focus is obviously an essential comperiod of time. ponent of Shire’s success. As Mike Cola, President of Specialty “That differentiating factor – focusing on symptomatic conditions – Pharmaceuticals explains, the company’s Specialty Pharmaceuticals busihelps us. We provide a lot of value for a smaller patient population and that ness model is far more wide ranging, with a vast array of drug programs. value we don’t think will be taken away from these folks through reduced “We have everything from an orphan drug in Xagrid in Europe all the way access to healthcare.” to something that’s more of a mass marketed product in the US for ADHD, Despite the upcoming loss of patent protection on Adderall, Shire has Vyvanse, and in the past, Adderall XR. a portfolio of products wide and big enough for it to cover the gap. Cola re“We have three business units now in our Specialty Pharma business, lates the company’s growth story, and explains that with six new product ADHD, GI and EPU, our emerging products business unit. Within each one launches in the last three years, that will continue to drive the company’s the populations we serve are willing to pay for such products because the impact they have on patients’ lives is significant,” says Grégoire. “If they don’t have replacement therapies or the drugs that we develop, their quality of life results in very high morbidity as well as often early mortality.”
Shire Human Genetic Therapies, Cambridge, Massachusetts, US
success. “We know we need to work through the end of the life for Adderall XR. We understand the dynamic of losing the exclusivity in April, but in fact we have a citizens’petition in place. We don’t know the impact of the citizens’ petition. There may not be multi-source generics but we’re not counting on that happening, so it’s really a growth story with the new products,” he says. Grégoire attributes a large portion of the company’s growth to its recently launched products. “They still have a lot of growth in them, whether it’s from our Specialty Pharma business or our Human Genetic Therapies business. From the growth perspective of our currently marketed medicines, and then the pipeline products that we have, we feel it’s a nice story for the overall growth beyond the Adderall XR story, which had been a sig-
“Out of that 3500 people we’ve hired at Shire, we’ve hired close to 2500 of them in the last three and a half years; so I’ve seen tremendous changes. We’re trying to consolidate all of those recent hires and make things more efficient. If you think of the state of the company when Matt Emmens took over as CEO in 2003, it really was not in a good place and each year we’ve added a fair amount of new products and new structure, building new opportunities for Shire,” says Cola. Grégoire explains the company’s approach for the future, highlighting recruitment of people to Shire’s already expanding operations to be central to strategy. “In our Human Genetic Therapies business, we’ve added 300 people in 2007 and 2008 to our team, and in 2009 we have plans to add more than 275 people. “We plan on hiring to support our growing business, specifically, we’re launching a medicine in Europe, Firazyr and we are now hiring people to work on that project. We’re projecting to hire in 2009 in a prudent way, based on the fact that we have the uncertainties that come with XR. It’s completely justified by the growth of the business and achieving the goals of the business,” she explains.
Strategy Grégoire’s experience in both the traditional and the entrepreneurial aspects of the pharmaceutical industry have contributed to her tenure at Shire and her influence on the company’s strategy. As she explains, “These kinds of experiences in terms of business, thinking about how to run a company in a nimble and entrepreneurial fashion and a global view is very important, and is something that helps me in mapping out the potential for our HGT business to grow. “In just that year and a quarter that I’ve been here we’ve added a significant amount of projects to the pipeline through business development and our HGT business has a research component. So we look at what’s in our research portfolio and we’re always working on different potential new drugs that will enter the pipeline internally, and externally. The economic difficulties that small companies are facing today in terms of raising capital whether they’re private or public provide an opportunity for Shire to aggressively consider acquisitions of products that fit our strategy, making sure that we focus on that specialist strategy. We have a courageous way of approaching business opportunities that come from the external world and want to manage the company in a non-big pharma way.” That non-big pharma way certainly seems to be an approach that has boosted the company’s revenue and allowed it to further its development of new compounds. However, with the credit crunch expecting to last at least well into 2010, only time will tell if such a strategy will pay off.
“We have a courageous way of approaching business opportunities and want to manage the company in a non-big pharma way” Sylvie Grégoire nificant part of Shire’s history. In our Human Genetic Therapies business, we’ve added 300 people in 2007 and 2008 to our team, and in 2009 we have plans to add more than 275 people.”
New jobs Shire’s development as a company is largely due to the substantial growth it has undergone in the last two to three years. It currently employs about 3500 people globally, with a sales force of approximately 1400 to 1500 people; without having thousands of salespeople relying on what’s going to be next in the pipeline, the model becomes much more efficient.
CUT DOWN, COLLABORATE AND FOCUS ON THE CUSTOMER Pfizer’s Kim Sandell lets NGP in on his vision for the manufacturing facility of the future.
or Kim Sandell, building the ultimate pharmaceutical manufacturing facility is not about bricks and mortar or machinery – it’s about people. Sandell, who is Pfizer’s Director of Manufacturing, knows what he’s talking about. He is currently project director for a new biotech plant under construction in Strängnäs, Sweden. He believes that of manufacturing’s four elements – equipment, product material, processes and people – people are the most important. “If you have a newly constructed facility or an old facility, you’re more or less stuck with the equipment. It sits there. So you need to work around with processes, or you need to find clever ways of utilising people better, such as other ways of working shifts, for example. It’s also about empowering people to feel that, ‘I can do my job and take decisions within my responsibility.’ “The people element of it, that’s the most important thing; that’s where you can make a difference. Everyone can buy the right equipment, everyone can get a fairly good process, but if you don’t have
people who are passionate about moving the process along and developing it continuously, you will not be leading edge.” Once you have the right people in place, the next issue to be tackled is the constraints of legacy equipment. Sandell says this can be overcome by building in flexibility from the very beginning, “When we’re building a new facility, it’s very much about building in flexibility in line with our knowledge. Of course there will still be constraints, but it’s mostly about getting to a point in the construction of a facility where you are very aware about your bottlenecks and your constraints so that you have made conscious decisions as to what you end up with. “When you have constructed the facility, you will then know the ways out of potential future problems. You have to do a really big, good planning exercise before you start building so that you know if you build it like this, you will have a bottleneck in say, step one. Or if you do it like this, you can remove the bottleneck in step one, but then step four becomes the bottleneck. You have to think forward and see where this facility could go in the future. If you have a conscious-
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and flexibility when the design is still only on paper. If you do it later, you will already have built in restrictions that might be less desirable. It’s about getting a customer focus: you need to have the customer on board in the product early so that you can make the right decisions. “Otherwise, you might miss the long-term goal; you might not give enough consideration to lifecycle costs, for example. It might be wise to spend €10 million on something rather than €1 million, because if you choose the €1 million engineering solution, it might not help in the long run, because you might need to spend €20 million on people in the following 10 years because you need a complicated workaround.”
Breaking down silos Sandell says that part of the innovation process for the future of manufacturing will involve encouraging people to think in a broader context. “It’s very much about getting a mixture of people and trying not to look at the departmental things. It’s about saying, ‘I’m work-
“When it comes to Lean manufacturing, the pharmaceutical industry is way behind, maybe 15 or 20 years”
Kim Sandell is Director of Manufacturing at Pfizer. He is responsible for the end-user representation and start-up activities for the new biotech plant being constructed in Strängnäs, Sweden.
ness about that, it’s much easier to work around. Otherwise, if you build something for a certain purpose described in the business case at that point, you can be sure that it will change in fi ve years, and then you don’t have the flexibility.” Manufacturing is an integral part of the pharmaceutical process, but it is often not considered thoroughly enough in the design process. Sandell says this will change, with the facilities of the future being designed to be multipurpose. “You have to have someone with a good imagination and good knowledge about what might come, and you have to make some educated guesses, so that you don’t focus solely on that one product. Building a dedicated facility is a terrible waste of capital. You need to look at a broader perspective, but you still have to go back to the process that you’re aiming at to start with to make sure that that you can reach the quality attributes you need. “One of the most crucial elements is having customer input from the beginning. You need to think about things like user demands
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ing for the capital product, so I’m focusing on my parts in the capital things. I look at equipment.’ “But you also have to have someone coming from the process side talking to these people and saying, ‘Yes, but if you do it like this, it will be much more beneficial from a process point of view.’ It’s all about mixing a team, and as a manager being proactive in that and bringing in a cross-functional team. Somehow you have to, as a manager, force people together, because it’s very easy to sit in your silo and say, ‘I’ll do my work and he’ll do his.’ And that’s not the way of the future.” One concept in streamlining which many other industries have introduced, is continuous manufacturing, but Sandell points out that this method is not particularly suitable for the pharmaceutical industry, which tends to stick to the batch process. “We are working with E. coli fermentation, for example. E. coli is a really rapid organism to work with: it grows for 48 hours, and after that it has generated so much cell mass, you can’t handle it within the equipment. You have to have a batch break. I think we’ll still stay with batches for a long, long time. You do need to have a process where the batch flows smoothly through the system so that you don’t have to wait to empty the whole facility, but until batch one is done, you can’t start batch two. It will never be a fully continuous process. “The other big drawback of having a continuous process when you’re working with fermentation and high potential drugs, is that you have such enormous value in the facility, it’s nice to have isolated batches if something goes wrong. It could be very expensive if you have continuous operations and it takes 10 days to shut the facility down. That might mean you have lost several million euros worth of product.”
There are those who say that the pharmaceutical industry should not only break down silos within its own walls, but that it also needs to reach out and learn from other industries when it comes to introducing more future-oriented manufacturing processes. In much the same way that Novartis has said it wants to become the Toyota of the pharmaceutical industry, Sandell says that his company can learn from other manufacturers on its home turf. “I think that’s the same thing for us. We are fortunate being in Strängnäs in Sweden; we are close to Södertälje where we have Scania, the big truck manufacturer, and they are really advanced in Lean manufacturing. The pharmaceutical industry is way behind on this, way, way behind, maybe 15 or 20 years. We definitely have to step up our performance. “We can make a quick comparison on the existing processes we have today and the existing facility and compare that to the new facility that we’re building up now. We will produce the same products, but we have a new generation of process. Today we need to handle about nine batches to get to one final batch of a certain size. In the facility of the future, we will be able to handle one batch all the way through with a three times higher yield. So we are replacing 27 batches with one batch. “Those are the things you have to do to move forward. You can’t just have a lab model that you scale up 1000 times; you need
“Building a dedicated facility is a terrible waste of capital”
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to look at around step one – what effect does that have? – to step two, and try to get into a free-floating thing so that you can have a batch flowing through. “Today we have to have a lot of intermediate steps, and that wastes a lot of time, because you need to collect a product, and then start the next step. But in the new facility, we can start from point A and run all the way to point Z without having any stops. We’ve been more moving toward that and looking at less intermediate steps and trying to gain yields as well – and of course, looking at waste time. “We will reduce the lead time on these processes with about 75 percent moving from the old facility to the new facility, just because it’s a more streamlined process and we can streamline work around it as well. Just imagine handling 27 batches at the compared to one; it’s a huge impact.”
Reining in spending Sandell believes there is no need for enormous capital expenditure in creating and building these new labs. “That’s the beauty of it: the new processes don’t have a new specification. They use the old specification, so we can use all the old methods. The analytical labs stays intact. You use the old labs for doing the new processes, so what you are doing is freeing up a lot of time in those labs for doing more production or using personnel, wherever the needs are. The best thing would be if you could have more product coming in and you can do even more with the same amount of people. Otherwise, you would have to take away people if the volume stays the same. “The dilemma you end up with when you are working with operational excellence is you have to be very careful that you don’t start to use it solely as a savings exercise, because that takes away all the engagement from people. They will start thinking, ‘If I do good work here, that might mean that I don’t have a job on Monday.’ It’s very important that operational excellence is about freeing up capacity and then trying to fill that capacity. “It’s not about freeing up people and taking them away and minimising the organisation. I guess that’s why companies like Toyota and Scania have been really good at this, because they have been working from one capacity base, and they needed to increase capacity. It has not been about being more efficient in that way, but they gain all the efficiency anyhow. It’s all about doing more with what you have. “I’m a bit worried about the turmoil in the pharmaceutical industry now, because it’s more about doing – or saving money. Even at Pfizer this operational excellence initiative that we’re running now more or less started as a saving exercise. That doesn’t empower people, and that doesn’t engage people because in the course of the work, you might lose your job when you are making improvements.”
Given this, what other metrics can we then use to measure operational excellence, because everyone says cost is the driver, because it gets the executive buy-in. How can we ensure operational excellence moves in the way of empowering the people to do well without threatening their livelihood? Sandell says it’s about showing what you can do with the facility and the equipment you have. “Say that you can be so efficient so that you can free up 70 percent of the capacity. Then it’s about, for management, filling that capacity; it’s not about trying to shut it down or laying off people. We need to find something to fill it with, and if we don’t have products in our own pipeline, we can try something else, such as going out to do contract manufacturing. “We can show that we will free up this capacity, but that it should be used for something else. Otherwise, you won’t get those great benefi ts that you might think, because you’re still saving money, but you might spend things in capital to make these improvements, and you’re still stuck with the same volumes. All that goes back to the same volumes, and you don’t get the big leverage on the improvements that you would get if you could still utilise all the capacity you have.” In the end, Sandell is looking to make Pfizer a leaner, more flexible manufacturing entity. “We would like to fill up what we have in spare in terms of other products, and if it’s not a Pfizer product, it will be great if we could find a third party, and we’re working on those strategies. It’s not all about saving, saving, saving, cutting away and cutting away. Freeing up capacity is more the thing; filling that up.” And ultimately, Sandell says, the big drug companies can use this to take back ground in the battle against the generics. “You can take the electronics industry as an example,” he explains. “There are a lot of joint ventures around facilities where they are producing the same kind of microchips, but it might be Phillips or Sony or someone else using the same facility; the only thing you are changing is the layout of the plasma screen. “In the same way, why not have a growth hormone production site where you have a joint venture of fi ve big companies making growth hormone. Why should they all have separate facilities? If you consolidate that into one facility, you get much better gain out of that facility and you might utilise the capacity up to 90 percent instead of having fi ve facilities that might be used to 50 percent. “We need to go to more alliances like that to, into the future and think in a much less conventional way. If you look at all other industries, this is not something new. But in pharmaceuticals we have been too protective.” Once it opens up to these new ideas, pharmaceutical manufacturing will never be the same again. It may even prove to be the secret weapon that helps big pharma stave off generic competition and come through the recession more or less intact.
“When you’re working with high potential drugs, it could be very expensive if something goes wrong and it takes 10 days to shut the facility down”
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Product package efficiency By Manfred Zurkirch
NGP. How can the supply chain be operated to help in the fight about counterfeit medicines? Manfred Zurkirch. There are different philosophies. One of them is making sure that the final patient, the customer, doesn’t get a counterfeit medicine; that’s the easier way. The more complicated one, the full-blown track and trace, makes sure not only that it doesn’t happen, but if it does, it also finds out exactly which type of supply chain it has been done in and by whom. This is tricky, and the pharmaceutical company has to make sure that it has clear control over the distribution channels down to the doctor or
times on the machines have to be extremely short. For a complete changeover from our machinery, for instancing changing of packaging five vials to 10 syringes in combination takes about 30-45 minutes. We have seen a clear trend that time to market is an issue. They build less and less stock, which is also capital, and they want to make sure they can package on their machine whatever they want, whenever they want, and changeover and flexibility of the machine is of the essence. Today you buy a syringe machine to package syringes, and in two years maybe you will have to package injector pens, so you
“We have seen a clear trend that time to market is an issue” the final patient by whatever means. This can be ready in the future via RFID. I’m skeptical that you can have full technical control until the end. You have to know the ways your products go and have a trust relationship with some of the doctors; otherwise, you can always cheat. NGP. How can time to market be achieved with the shortest possible changeover time? MZ. That’s one of the strengths of our company, and we have seen, especially in the last few years, that product batches are getting smaller and smaller. This means that since products are becoming more expensive, they’re more specialised. Pharmaceutical companies want to produce packages on the same machine, and so they change over several times a day to make sure that they do so just in time. They get an order for a batch of 50 packs, and then they package those, and then the next ones, and so the changeover
want to make sure the equipment you spend millions on can be retrofitted, and that is its changeover flexibility, that’s the key in the pharmaceutical market today. NGP. What role does product packaging play in ensuring medicines are safe from counterfeit and tampering? MZ. Obviously, product packaging plays a major role besides tight control of the distribution channels. The features used on pharmaceutical secondary packaging are many. Dividella can offer features, such as hot melt tamper evidence closure on the TopLoad carton and cardboard tamper evidence features on every single product inside a TopLoad carton. (For instance every single syringe in a multi-syringe presentation is protected individually.) Other features include the print and/or labelling features on the outer side of the TopLoad carton that are necessary for a real track and trace (this can be data matrix codes, serial num-
Manfred Zurkirch is Managing Director of Dividella AG, which he joined in 2006 from a leading Swiss technology group, where he was Business Unit Manager, and previously VP Marketing and Sales. His expertise covers the capital equipment industry, and through his extensive sales activities he has an excellent knowledge of international markets. He previously held various technical and managerial positions in Switzerland’s biggest telecommunications corporation. Zurkirch is a doctorate physicist and he also holds a Master’s degree from a top business school in Paris.
bers, RFID tags etc.) and special marks on the cardboard that enable the final customer to verify where the carton originates from. Normally, these features are defined together with the customer during the packaging development process even before discussion about the machine itself starts.
INDUSTRY INSIGHT The supply chain has become a competitive edge, a sales argument and at the same time, a key area for cost cutting activities. Time to market plays a significant role for the future.
Cross-divisional integrated solutions
ross-divisional solutions will play a major factor for the success in the future global supply chain of pharmaceuticals. End to end integrated solutions is the true competitive edge. The forwarding industry needs to focus more on integrated solutions, meeting up with expectations from the pharmaceutical companies that seek to have cross-divisional solutions. The pharmaceutical supply chain is under great development where the industry is going from decentralised decision making and functional focus to a model of a true integrated and value added supply chain model, where cross functional focus and centre lead strategies are focus areas. Warehouse strategies play a signiﬁcant role for the supply chain and the potential markets served. The pharmaceutical industry is seeking true long time partners that have the ability in offering all areas of logistical activities, distribution and warehousing. The pharmaceutical industry has become aware of the signiﬁcant advantage of operating their supply chain from warehousing to effective road, airfreight or ocean freight, this linked with most up to date communication platforms. The traditional business behaviour between a logistics supplier and pharmaceutical companies are changing. Historically there has been a clean cut in between different solutions, warehousing, airfreight, ocean freight or road freight. The future partnerships will span over the different areas, becoming one integrated solution. A true global logistics provider must be able to offer these cross-divisional solutions, best tailored in any region of the globe where the customer chooses. It is simply not good
enough only to offer top quality air freight solutions if you can not offer a warehouse operation tailored to customer needs. The market demands global solutions and customers are requesting the ability to order correct quantities and lower inventory levels. This brings a change to the order proﬁle; orders are becoming smaller. Production changes accordingly. This is a challenge for the distribution of pharmaceuticals. Consolidation possibilities that can meet with the lead-time demands of end customers are highly valuable. A change of routines in the supply chain can have dramatic effects if not properly implemented at all levels. With clear communication the cost of change reduces dramatically. Global harmonisation enhances the possibility of maximising effects in a supply chain. It is the harmonisation and interaction between the pharmaceutical company, freight forwarder and carrier that gives the supply chain success. There are regional variances in infrastructure that determine how the supply chain is operated. A true cross divisional activity achieves several synergies for both parties. The ﬁnancial beneﬁts are far greater than if a customer would operate with three or four different partners for the warehouse, airfreight, ocean freight and road freight services. The logistics provider will become more integrated into the pharmaceutical company and its full supply chain. Better understanding the pharmaceutical companies’ demands and needs will secure a robust service level and at the same time keep cost down. Facts are that communication between parties becomes more effective. The need for
Martin Svantesson is Vertical Market Director of Geodis Wilson Pharmaceuticals. He has 15 years experience in Global distribution and holds a Master’s degree in Supply Chain Management. Svantesson’s role is to develop Geodis Wilson’s pharmaceutical distribution solution/ proposal for existing and potential pharmaceutical customers, as well as to harmonise a global approach within Geodis Wilson in regards to pharmaceutical handling according to GDP standards.
a suitable communication platform is a must. This part could take some time to adjust to both parties, but ones up and running acts as the glue between the parties. Cross divisional partnering tends to be for a period of three to ﬁve years, this falls in line with changes that are ongoing in current business climate, long term partnering and fewer partners. Geodis Group global strategy is to meet up with the future trends for cross-divisional demand in the pharmaceutical industry. Geodis has several partnerships up and running where a full control, cross-divisional set up is operated. We see the beneﬁ ts of this type of approach and seek to partner with more pharmaceutical producers or wholesalers. Geodis Group stand in the forefront of end to end, cross-divisional solutions for pharmaceuticals.
NEW CONCEPTS IN RISK CONTROL Bayer’s Helmut Mothes examines the success of Lean and the development of operational excellence.
n recent years, the life science industry has faced increasing challenges, often due to long development cycles, uncontrolled failure risks and growing competition. As SVP and Head of Process Technology at Bayer, Helmut Mothes is discovering new concepts in the development and manufacturing of drugs to address these issues. He explains the signiﬁcant challenges created by the long development cycle for drugs, and the risks produced by the complexity of the tasks, advising that the solution for the industry to apply speciﬁc concepts proven to speed up the process, containing those risks in its early phases: “If failure happens in an early phase, the risk of having spent too much money already is avoided,” he says. According to Mothes, there are three major concepts that you could apply to manage that process efﬁciently. “The ﬁrst thing you have to do is introduce what you could call proof of concept or proof of visibility in the developmental cycle very early, and during the early phases of a developmental project you have to focus on activities that help to lead to the proof of concept. “You also need workﬂows, particularly after proof of concept, that are very standardised, very modular, and that allow you with minimum risk to achieve the goal, to break through pre-clinical and clinical development, and then to launch the product. Thirdly, combined with that second concept, it’s necessary to have standardised technology platforms, particularly with respect to manufacturing. So these are the three things that are important to speed up the process and to take the risk of failure into early phases,” says Mothes.
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Data management In terms of improving handling of information, a more efficient creation of data is important to transfer some of that failure risk to earlier phases in the development cycle. Mothes explains that central to this is the development of a drug, whether chemical compound or biological, which will create a huge amount of data. However, this does not come without its challenges. “The problem arises as to how to manage this data appropriately and also, a challenge even more important in the future, is how to extract the right information out of this data to support decision-making. Essentially, you need efficient ways to manage huge amounts of data, not only for a single-track development project, but also for a variety of projects, because that may create additional information and opportunities. Also, combining data management with modelling and computational tools could allow you to extract further information to create more insights into structures, things you can see by simply handling data.” In order to shorten the time between target discovery and approval of the active substance, Bayer has implemented many of the standard procedures, from high throughput screening in the early stages of generating small quantities of an active compound, through to efficient ways of managing clinical testing. “Of course, there are new ways to improve the performance,” explains Mothes. “I would like to describe that with an example, which is not so much related to drug discovery, but to the synthesis of active ingredients and how to get an active ingredient or an active substance from the early stages toward the production scale.” “For example, when you start a development you generate the first milligram of a product, and the synthesis route you have chosen to do that will affect what you have to invest later on in the production side, it will affect how complex the process development will be, and it will also affect what the risks are. We try to implement a concept so that you generate the first milligrams of a product with technologies that can be easily scaled up and then put into reality in a production plan: micro technology. “The reaction is done in a single channel and then later on the production is done in a multiple number of channels, but what is happening in a reaction channel doesn’t change. So scaling up is not really a problem. This is very simplified, but it makes clear that it is possible to use the same technology platform when you produce the first milligrams of active substances, and you use the same principles late in production. That of course significantly minimises the risk of failure and also optimises the speed of the positive element processes.”
Lean The move to Lean and toward operational excellence is continuing to dominate discussions within the life sciences industry, and so with it becoming a major topic for biotechnological services, to address topics related to performance and operation. “The idea is to apply operational excellence in an integrated manner. We want to operate the process, the plan and the facility as optimally and as efficiently as possible, so that’s the target, and this objective is particularly challenging at the moment with all the changes in raw materials and global competition,” says Mothes.
Helmut Mothes has been Head of the Process Technology Division at Bayer Technology Services since January 2002. Prior to this he worked at Bayer’s Animal Health Business Group in Mannheim, where he was responsible for operations (manufacturing, supply chain management and quality assurance). He began his career at Bayer in 1984, working in the Process Engineering Department of the Central Research Division. During his five-year stay in the US, he worked first at Bayer Corp (formerly Miles Inc) and then at Haarmann & Reimer as manager of the biotechnology pilot plant and later of citric acid production.
“To be really successful in operational excellence you need integrated programs that address three topics. First of all you need an assessment of where you are and where you could go with your performance. This assessment has to be neutral. It should not be biased by beliefs that you carry from the past, so that’s the first element: assessment. Second thing, you need methodology. Very often we get proposals, which we improve, but methodology means you have to have tools, software and handbooks that guide you through the process of implementing operational excellence projects. So assessment, methodology, and the third level that is automatically linked to operational excellence is the topic of sustainable implementation: you need things that allow you to monitor, to steadily improve the key parameters. “For example, you need online monitoring with respect to key parameters: assessment, methodology and sustainable implementation to bring an integrated approach. At biotechnology services we have put together a package that integrates these three levels and the package actually aims at different targets,” he says. Mothes notes the importance of efficiency in improving speed and flexibility during drug synthesis in the manufacturing of active substances. He advises the first step in this to be in synthesizing an active substance, starting with the technologies that are easy to scale up, which is often done through the setting up of laboratories that are able to produce very small quantities in a manner that is similar to a later production side.
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Bayer also recently signed a partnership agreement to use their modelling and simulation software, and as a result has implemented some of the necessary hardware. “These are the first very promising projects running,” explains Mothes. “What are we aiming at? We think that these methods could enhance certain development tasks, such as the area of codings and in the area of formulations and drug delivery systems. “It’s important to integrate these computational methods with what you do in a standard manner with experiments, and these computational methods allow you to reduce the number of experiments, but they also allow you to challenge your mental models and that creates new knowledge. We have applied these things to two or three actual topics in drug development and we think that these theoretical methods definitely supplement what we do during the normal development cycle.”
Innovation Bayer follows a strategy that can be described as openly innovative: the complexities of the challenges are only successful if handled without a network of research units, institutes and universities. A single company is not capable of providing all the neces“Important to this process are modular and standardised concepts, sary resources, making it essential to build a network of research along with being able to prefabricate certain things later on for produccollaborations. Mothes names the catalysis centre in Aachen as one tion. Currently active ingredients are manufactured in multi-purpose, example of this: “It’s one element, together with biomaterial signs, multi-product plants, which require upfront investment, and it’s always biotechnology services and the university, which we have set up. difficult to get a high utilisation in these plants. These multi-purpose, In the centre there are people working from the university but also multi-product plants are very flexible but they are less efficient. Bayer people, and in this environment we are carrying out projects “We try to overcome that problem by moving towards continuous that are more long term. production, and by small but dedicated “We are going for what we call dream processes to manufacture active ingrereactions. Currently, we have a product dients. This could change the way active that you synthesise with five or six steps. “We want to operate the process, substances are manufactured: we move It would be very beneficial if you could the plan and the facility as away from a multi-purpose, multi-product reduce the steps to get to a polymer from optimally and as efficiently as chemical plant toward a more automotive five or six to let’s say two or three, by compossible, which is particularly kind of production for active substances. bining new technologies, new catalysts challenging at the moment” “Whether that will actually happen, and ionic liquids, and that will reduce raw we will see. There are certain challenges in material demands and investment. terms of technology that are required, but “Since it’s very long-term research, we what I consider to be the most important challenge for us is changing also need some time. That’s the reason we’ve supported the centre production strategies in such a manner that will require a paradigm for at least five years, but there are already some developments that change, because you cannot implement a multi-purpose plan in a indicate there is a potential. There’s still some way to go, but first resmall, dedicated line. That will not allow you to utilise all the benefits, sults show that we are very likely to be successful there,” he says. meaning you have to strategically approach the topic. Therefore Innovation is important to Bayer, especially in terms of economBayer’s biotechnology services, together with those of other major ics. “If you look at a product like polycarbonate, then currently you companies, have started an initiative we call F3 factory.” are doing that in plants where you have several steps. You synthesise The F3 factory project is supported by the European Commisstep by step and find the product would be polymer. It is feasible to sion, and is set up to allow different companies to put together more take two of the main raw materials, carbon dioxide in this particular flexible concepts, at a faster pace. Since it involves a paradigm shift, case, and synthesise that polymer. There have been a lot of efforts companies cannot push their individual concepts through. Instead, a in the past to pursue so-called ‘dream reactions’ and in principle consortium of partners must work together to standardise modules they are plausible, but up until now they haven’t been achievable. and interfaces. The change from a multi-purpose, multi-product “With nanotechnology, new catalysts and new process techbench production toward continuous dedicated production is one of nologies, like micro technology, there is a good opportunity to be the trends currently being seen in the life science area. successful.” n
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THE ADVANTAGES OF OUTSOURCING Optimising your resources to achieve long-term success, with Lipmans Zeligmans, Jim Kernan and Anders Ulfhielm.
NGP. What advantages can companies in the pharmaceutical sector gain from outsourcing their manufacturing requirements? Lipmans Zeligmans. The main advantages are optimisation of resources and concentration on the companyâ€™s long-term, strategic processes. Why is this important? The deepening of the global economic crisis has significantly reduced end consumer purchasing power and is leading to increased competition between producers and the price of goods or services and effectively reducing their costs is more important than ever. This is driving all market players to find ways to optimise internal company costs and improve efficiency. One option or solution for improving business is to concentrate financial and human resources on the companyâ€™s long-term, strategic processes, and to outsource less important, non-core processes to companies specialised in effectively providing a specific service. In the pharmaceuticals industry, companies usually prefer to use contractors to perform standard processes, for which there is no risk of knowledge transfer. These are usually standard production processes, but the choice of sourcing model depends on each companyâ€™s specific strategy. Jim Kernan. Price pressure and a lack of a strong pipeline are forcing many manufacturers to reconsider the organisation of their production systems. Some companies are focusing their efforts on improving manufacturing efficiency by introducing techniques such as Lean manufacturing. Others are examining their product portfolio and looking to see if they can drop or sell off some of the small volume products. Still others are adopting a combination of both approaches. At the same time, the growth in demand for personalised medicines, added to the need for multiple line extensions in order to maintain sales and the opening of new geographical markets, are leading to greater fragmentation in the number of finished pack presentations demanded by customers. In the face of these competing challenges, production of solid or liquid dosage forms in bulk for smaller volume products may still be economic. The real problem starts when companies want to fill or pack in short runs and in multiple presentations. By outsourcing the short runs to partners that have the flexibility to respond quickly to customer demand and the ability to keep costs at a reasonable level, mainstream manufacturers can free up their large volume lines to deliver much improved efficiency with far better customer service, whilst maintaining a full portfolio of product presentations. Inventory and working capital can also be kept to a minimum. Anders Ulfhielm. Pharmaceutical companies doing outsourcing activities can get substantial cost savings and offset the high capital investment required for building in-house manufacturing capabilities, while still keeping the compliance and quality level. The companies can also focus on core competencies. CMOs can today provide technology transfer and manufacturing capacity quickly as the organisations are small and flexible, and pharmaceutical companies can get access to additional expertise and expensive state-of-the-art technologies. The disadvantages are that companies have reduced the opportunity to develop internal manufacturing know-how and expertise. The loss of control of manufacturing is a commonly cited concern of pharma companies. It can also be a concern regarding the confidentiality of developed proprietary information.
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Why should companies applying the principles of Lean Manufacturing consider outsourcing their short production runs? JK. The highly integrated manufacturing models used by the pharmaceutical industry are well suited to the application of lean manufacturing techniques, but there are a number of precursors that must be put in place in advance. One key principle is that Lean manufacturing is best applied to a stable manufacturing environment where the number of changes to production schedules and finished product presentations has already been minimised. It is no surprise that the old 80/20 rule that applies in so many industries also applies to the pharmaceutical sector. Typically, 80 percent of the profit made on pharmaceuticals is made from just 20 percent of the finished pack presentations, or stock keeping units (SKUs). The remaining 80 percent of the SKUs are normally small runners and contribute only 20 percent of the profit. These small runners also account for an inordinate amount of changeover time. A disproportionate amount of inventory are frequently the cause of unplanned interruptions to the production schedule and are often found at the back of the queue, resulting in poor customer service. To apply Lean manufacturing successfully it is essential to clear the decks of the small runners so that full focus can be brought to bear on those SKUs that offer the greatest potential for efficiency gains. In the meantime, the small volume products should be diverted to suitable units within the company’s own infrastructure or outsourced to manufacturing partners who specialise in short run production.
“Price pressure and a lack of a strong pipeline are forcing many manufacturers to reconsider the organisation of their production systems” Jim Kernan AU. When outsourcing, Lean manufacturing principles should always been taking into consideration when evaluating all types of manufacturing steps. This is especially important when you are doing outsourcing activities with short production runs, to avoid inefficient steps. LZ. The lengthy process of developing a product, constantly rising manufacturing, equipment and marketing costs, and increasing quality and regulatory requirements can all delay a product’s entry into the market, which is critical for efficiency in pharmaceutical companies. By evaluating its processes and outsourcing those requiring big investments or specific knowledge, a company can concentrate its financial and human resources on long-term development and strengthening competitiveness in strategically important areas such as R&D and marketing. This can all have a positive impact on company cash flow by reducing product costs and time to market. And isn’t that the main goal? NGP. How can outsourcing help companies reduce costs, reduce inventories, improve lead times and facilitate improved customer service? AU. You need to create a company outsourcing strategy which shall be approved by the executive management, find qualified partners and go for a
Jim Kernan is one of the founders of PharmaFlow Ltd and is responsible for Business Development. Prior to PharmaFlow he held senior positions within Eli Lily, Baxter, Aventis and most recently as Vice President of International Manufacturing at Stiefel Laboratories. He has extensive experience of operations, quality and strategy management within the life sciences sector.
win-win situation.When you use outsourcing companies or CMOs, you will always have process and manufacturing steps with a high utilisation level, and thus will have an efficient value-added process with gains for both the pharmaceutical company and the CMO. It’s all about having the right critical mass and utilising the best knowledge. LZ. Entrusting manufacturing to a company specialising in the relevant field, with experience, know-how, reputation and all of the necessary resources for providing the respective service, can have a positive impact on company cash flow by optimising inventories both for raw materials and finished products, since the service provider is fully responsible for this. Also, by optimising capital expenditures, the company saves both time and the resources required to maintain or adapt the necessary infrastructure and acquire technology as this is all done by the service provider to accelerating the products’s time-to-market. A company specialising in contract manufacturing usually arranges the development, manufacturing, packaging and delivery of the product in accordance with an agreed, binding schedule in line with JIT system and GDP requirements. JK. By outsourcing the fragmented elements of their manufacturing requirements, companies can apply the full rigour of lean manufacturing techniques to improve all aspects of their retained mainline activities including inventory management, production efficiency and customer service. By choosing a flexible and responsive outsource partner that specialises in small volume production, they can also be assured that they will maximise their ability to service the short run presentations effectively. In both cases, working capital, inventory cycle and cash flow are improved.
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NGP. Pharmaceutical companies are coming under increasing pressure to reduce costs, lower inventory levels and ensure continuity of supply. How can companies like yours help them to achieve this? JK. PharmaFlow was established in 2004 by experienced pharmaceutical professionals to provide contract manufacturing services for small batch/multiple presentation products in the pharmaceutical and natur-
“Pharmaceutical companies doing outsourcing activities can get substantial cost savings and offset the high capital investment required for building in-house manufacturing capabilities” Anders Ulfhielm al healthcare sectors. Operating in a fully GMP licensed facility, we specialise in providing innovative, flexible, low cost formulation, filling and packing solutions. By outsourcing short runs to PharmaFlow, our customers achieve increased production efficiencies, minimise production delays, reduce inventory, improve customer service, shorten their cash cycle time and free up their own management team’s time to focus on improving all round profitability
Anders Ulfhielm is CEO at Rechon Life Science AB in Malmö, Sweden. He is responsible for creating a new pharmaceutical business in Europe with the newly founded company Rechon Life Science, which has Chinese owners. He has long experience in executive positions within the pharmaceutical industry at Astra, Kabi-Pharmacia, Gistbrocades and Ferring Pharmaceutical.
LZ. Grindeks has extensive experience in manufacturing a broad spectrum of pharmaceuticals. We offer full-service contract manufacturing starting from development and production of APIs and followed by development, manufacturing, packaging and distribution of various finished dosage forms (tablets, capsules, ointments, injections, syrups). This allows our customers to optimise their costs for purchasing raw materials, maintaining inventories, manufacturing and logistics. We are flexible in meeting the customer needs and offer tailor-made solutions. Grindeks constantly invests in modern, high-powered technologies – our newly finished dosage forms plant opened in 2009, complies with world class pharmaceutical manufacturing standards and has a capacity of 1.5 billion tablets and 500 million capsules per year. The manufacturing processes are organised in accordance with GMP and ISO quality standards, the plant is equipped with a modern automatic control system that regulates the microclimate, manages the technical engineering systems and other manufacturing processes and significantly reduces energy consumption. An equally important factor is the geographical location of Latvia, the home country of Grindeks. Latvia is a bridge between Europe and Russia, which means savings on logistics costs for shipping goods from one side to the other.
“By evaluating its processes and outsourcing those requiring big investments or specific knowledge, a company can concentrate its financial and human resources on long-term development” Lipmans Zeligmans
Lipmans Zeligmans is the Director of Final Dosage Forms Manufacturing of Grindeks. He has worked for Grindeks since 1992 and has developed tremendous experience in managing the manufacturing processes of company products, as well as for contract-manufacturing partners. Under his guidance the new solid dosage forms manufacturing plant of Grindeks was built, equipped and opened in 2009.
The historical background of Grindeks (links with Russia, the CIS and Eastern countries), its European business culture, the language skills of its staff, international quality standards and the significant research capacity of the company add up to creative and farsighted business solutions at still very reasonable prices. This is especially attractive to medium sized Western European companies that prefer to do business on a European scale. AU. Companies need to utilise the CMO fixed assets in an efficient way, provide an umbrella overview, be flexible, put strong efforts in improving communication levels and establish a professional project management system. n
“What we’re trying to do overall is look for the suppliers we can keep growing with, that we can keep collaborating with, and that we can get even closer to than we’ve done before. This is the basis of supplier relationship management. But how exactly the crisis is going to change the landscape, I’m not sure. It’s our job to try to be able to see ahead of time which are the ones we can work with, which are the ones we can help, and which are the ones we feel may become a greater liability, for which we may have to put in contingency plans. “We recognize the risk, but also the opportunity. We’re fortunate enough to be working in the pharma industry, which is typically not as hit during a recession. We’re still impacted, but we’re not hit as hard as maybe more variable spend industries, although we certainly have our business pressures to look for efficiencies and economies of
scale. On the other hand, in our approach the supply base that we deal with is probably even more fragile. Because to that we do have to be a little bit cautious. “Whenever we see some vulnerabilities, as a large, multinational pharmaceutical company, we can offer stability of volume,” he says. “We can offer assistance with cash flow – there’s a high level of certainty that we’ll be able to pay our bills at the end of the day – and we can also look for commitments beyond the immediate short-term future. So we can both leverage the market opportunities and also work with our vendors to strengthen them in those times of turbulence, and that’s how we’re adjusting the strategy.” The effect of this turbulence on the required skill sets for procurement executives is drastic. In a stable market, negotiation is
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essential, and the relationship between buyer and seller is balanced: following the transaction, one person will lose something, one person will gain. Rashed explains that in the current economic crisis, there are certain situations in which negotiating and pricing is not suitable. Instead you must take an overall look, not just from a sourcing leadership aspect, but also considering the business continuity and the business element. “Now is the time to make some changes; like everyone else, we will seek gains to make it through the market conditions, but we also have to think a bit more longer term, and this goes beyond the purchase order transaction,” says Rashed.
New strategy A strong department depends on good people, and in 2005 Rashed launched the Talent Management Initiative within the manufacturing department, which was considered an unusual move. He did this not because of any personal desire to stand out, but from a logical and business necessity. “I had just moved into the European role and there were 100 people in the team, spread across 27 different sites, the majority of whom had not come from sourcing. We had some who were new learners coming on board to the function, and it was hard to distinguish who was who and what they knew. So it originally started off as an assessment tool, to understand competency skill levels and requirements – what is the demonstrated versus the needed? When the findings came out, they were pretty revealing, but then the question was, “What do we do with that information? “We identified a lot of gaps. The outcome was that we put together a program, which was meant to not only address the talent gaps but also bridge them, and by doing so the needs of the function were actually evolving faster than we were able to bridge them, and that’s when it became a more comprehensive program,” explains Rashed.
“We can both leverage the market opportunities and also work with our vendors to strengthen them in these times of turbulence” The initiative originally started as a tool to correctly assess the right people, based on skills competencies, but the actual outcome was far greater than expected. It became a talent development program of on-the-job action learning and mentoring, expanding the potential for growth and contribution of each individual. “In this way, we can make sure we hold the top performers in the organisation. It took us about a year and a half to build and is very useful. It was once again applied out of necessity, but we took that as a base to expand and make it a global sourcing program, which is now being carried across all divisions,” he says. According to Rashed, the difference following the initiative has
Sammy Rashed has 17 years’ experience in procurement management across various industries, and currently heads sourcing globally across Novartis’ pharmaceuticals sites. His areas of expertise include regional program deployment and talent development in the sourcing function.
been huge. “If you look the quantified numbers, the savings have undoubtedly been a lot more than in the past. We’ve doubled or tripled our savings performance from being probably lower middle of the pack being among the best in class companies. If you look at the ROI of our functions, measuring the investments versus the return based on salaries, overhead, the fixed costs and so on, ROI has pretty much doubled versus what it was, so it has been a very good investment. “This has come through a change of requirements in skills and competencies. The support function, the more traditional role, has mainly been either automated, delegated, outsourced or sometimes just purely eliminated, and we’ve constantly moved upstream in the decision making chain getting closer to a customer, but adding value much earlier in the process.”
War for talent There is a well-publicised war for talent within procurement, which begs the question of exactly what the hiring organisation has to get right. Rashed advises that the answer to this involves a variety of dimensions, the first being what is the exact level at which you want to hire?
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looking for people who can sustain the growth, come in for a while, either grow with the function or grow out of the function at some point back into the business. But at the current moment it’s not a place to come and look for stability for the next five years. It is moving too quickly,” explains Rashed. If there ever was a time for thinking outside the box, this is it. The recent mergers and acquisitions within the pharma industry are producing a knock-on affect on the ability to combine different procurement skill sets. “I can tell you that, from my discussions with the people impacted, this is having a drastic change within their day jobs. The quantity of available talent is going up by a tremendous amount. If anything, when you have mergers and acquisitions, there are usually a number of redundancies that happen as a result of that, and the function as a whole is becoming leaner. “The market has seen more availability of resources in the procurement field, but the quality is not there. People who can navigate through those turbulent times have got a strategic mindset, a good vision, good engagement skills and are strong communicators. These are not the typical skills of procurement professionals. These we’re still looking for, referring back to the war for talent. Anyone who has got those qualities will be doing very well in the market despite the number of people available,” he says. “On one hand, you want to make the job responsibilities as attractive as possible, and at some point they all convert from the soft skills that we’re looking for. But you get to a certain level where you’re competing with much more established functions, so you don’t want to over-specify the requirements needed from the individual. “You also don’t want to over-promise what the job will do if the reality is you’re building the competencies that you need two years from now, and it’s not going to be ready to be deployed until then. In other words, if you hire someone with a strategic mindset, who comes with a bag full of ideas and wants to change the world, but you put them behind the desk to tactically negotiate with vendors and ensure compliance, that’s a big mismatch. This has actually happened a few times in the past. From that perspective, it’s about getting the level right. “The second thing is the environment. If I look at our company specifically, we probably offer more sustained and faster career growth than the average company. Every so many years, you can expect to move on to the next level. What comes out of that is the notion of the career curve. “You can asses an individual’s progress by measuring what has been the growth historically versus the level of responsibility, and if you see someone with a relatively flat curve and the position we’re offering them now is way above the normal trend they’ve had in the past, that should raise some alarm bells. Likewise, if it’s a parallel move by someone who’s fully done the role before, they may not get the same level of satisfaction from coming in and doing the exact same role again. “From a summary perspective, it’s about sizing the job, not just from an aspiration perspective, but also in terms of reality: what will the job look like, and how does that fit within one’s career growth? The keyword for me is ‘growth’. The function is growing quickly, and we’re
“You can asses an individual’s progress by measuring what has been the growth historically versus the level of responsibility” In terms of how procurement skills will develop over the next few years, Rashed doesn’t see much change from current trends. The factors he emphasizes are the ability to understand and align with the business strategy, the ability to engage with senior stakeholders – how you get them to accept that you understand their needs and to trust you sufficiently to give you the leadership of the projects to get their needs met – and being more entrepreneurial, being able to essentially identify, build, initiate and lead cross-functional projects. “You’re not working for the business; you’re working with the business, often in a project leadership role where you rally different team members from different functions together towards a common goal, and you essentially elevate your role internally to a business productivity champion. “If I compare skills with technical competencies, the technical competencies can often be trained; the skills are a bit harder to come by,” says Rashed. The transferable skills usually play a heavier weight in the decision to hire or not than the technical competencies, and you can usually get a feeling as to whether the person has those skills in the first few minutes of a conversation or an interview, then the rest becomes a set of validation. It’s finding those candidates that are ready now with those skills and behaviors. Again, every other function is looking for the same skills and mindset, we’re not unique in that,”n
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SIEMENS:mar09 08/04/2009 13:49 Page 70
Better process understanding Patrick Boosyut looks at software solutions to help the pharmaceutical industry implement process analytical technology.
he pharmaceutical industry is under great pressure, not only because of the financial crisis but also due to low pipelines, patent end-life, new therapies, long product development lead times, low asset utilisation in production facilities and regulatory changes. Driven by future development and manufacturing strategies, several major pharmaceutical companies have initiated an acquisition process to be ready for the industrial challenge which is knocking on the door. Nevertheless, acquisitions will not only lead to the expected quantifiable and qualifiable benefits, but also technical and functional changes are also inevitable to meet future challenges. Several companies have started an expedition to increase operational efficiency, reduce the production costs, accelerate time to market and address niche markets (such as personalised medicine). This expedition is strongly supported by the regulatory authorities, such as the FDA and EMEA, and they encourage the industry to work on a consistent and high-quality drug product, ensuring the required therapeutic effect to the patient. Regulatory authorities emphasise that patient safety comes first and that a consistent and high-quality end product is a must. In other words, process understanding and management of process variability are key today for R&D as well as for manufacturing departments. It took some time but today the industry confirms that the PAT (process analytical technology) and QbD (quality by design) concept is key to increasing process understanding. Also, the new draft Guidance on Process Validation describes the FDA’s vision on the alignment of process validation activities with the product life-
Patrick Boosyut is PAT Account Manager in the Production and Quality Management group of Siemens. He obtained a Master’s degree in Chemical Engineering, with a specialisation in Biochemistry. He has worked for seven years in the LIMS (laboratory information management system) and PLM (product lifecycle management solution) and quality management systems business. Today he focuses on the application of PAT/QbD in the pharmaceutical sector, designing PAT/QbD infrastructures and consulting with companies on their project approaches.
cycle concept. The guidance clearly references the PAT/QbD concept as a cornerstone for, “The collection and evaluation of data, from the process design stage throughout production, which establishes scientific evidence that a process is capable of consistently delivering quality products.” Various new technologies find their way into and will change the current pharmaceutical landscape. Intelligent and multidisciplinary solutions will allow companies to address current and future market challenges and become more competitive.
The solution of choice Siemens can be an important partner in helping the industry to improve R&D and manufacturing performance, supply chain, quality and asset management. Bringing together the customer’s requirements with Siemens’ capabilities is our main target. One of the key technologies in which Siemens is investing which will continue to drastically change the pharma industry is PAT/QbD. PAT guarantees the quality of the end product by measuring the critical quality and performance attributes of raw materials, in process materials and processes in real-time.
“Technical and functional changes are inevitable to meet future challenges” The PAT/QbD solution of Siemens, called SIPAT, is the first configurable and user-friendly PAT/QbD solution which links all PAT tools (for example, process analysers, multivariate data analysis solutions, off-line laboratory data, process control data and historical data) together into one real-time PAT/QbD architecture. SIPAT collects and aligns process data, analyser data, laboratory off-line data and manual data, executes model-based calculations for quality predictions and views all data in real time for batch quality analysis, which can also be accessed off-line for analysis and modelbuilding improvements. A replay function allows new models to be tested and validated based on historical data. As several major and smaller pharmaceutical companies have decided to implement SIPAT in their processes (R&D and/or manufacturing), SIPAT is becoming the solution of choice for PAT/QbD in the pharmaceutical industry. Siemens has extensive experience with PAT projects and its multidisciplinary team can help customers in subjects such as setting up the DoE (design of experiments), data modelling, risk based analysis, SIPAT configuration, manufacturing control strategy (including advanced process control) and integration of SIPAT into the IT landscape. The interaction of Siemens with the pharmaceutical industry and the intensive communication with regulatory authorities in the US and Europe have placed Siemens in a strong position to provide the industry with the products and solutions which are needed, today and tomorrow. n
outsourcing of manufacturing
he strategic outsourcing of the manufacture of active pharmaceutical ingredients, intermediates and reagents by the pharmaceutical industry during the last three decades of the 20th century was the key driver for the development of the ﬁne chemical industry around the world. There have been periods when this trend was temporarily halted and in some individual company cases reversed, but overall the outsourcing trend has continued. This trend has been driven by the pharmaceutical industry’s need to focus on its key business drivers, ﬁrstly researching and ﬁnding new medicines and treatments, and secondly the global marketing of their products. The cost, and to some extent expertise, of chemical manufacture, with its capital-intensive plant and equipment, is a burden that most medicine manufacturers can no longer afford to bear. Consequently partnering with reliable, quality driven and cost-conscious ﬁne chemical suppliers is of vital importance to modern pharmaceutical companies. Over the last 30 years, many small and medium-sized ﬁne chemical businesses grew on the back of the pharmaceutical industry’s outsourcing opportunities. This growth in turn attracted several major chemical corporations who thought that this was an opportunity to move into higher added-value intermediates. The bigger companies actively pursued and bought up many small and medium-sized ﬁne chemical units. However, it has become
apparent in the 21st century that they often failed to recognise that the companies they had bought had built their reputation on the speed of response, quick local decision-making and ﬂexibility that their customers demanded. These characteristics are not easy to manage in large corporations and more recently many of the businesses that were acquired have again been spun out, freeing themselves from the overhead burden and complex decision-making processes of large conglomerates. The north east of England has particular strengths in ﬁne chemicals and companies in the region have histories that reﬂect the scene we have set out above. The North East of England Process Industry Cluster (NEPIC) has many small, medium and large company members that are able to work at all levels of the pharmaceutical supply chain. Companies with bases in this region can deal with the development of new molecules, the scale-up of processes, the delivery of clinical trial materials right through to full-scale manufacture and indeed into formulation and packaging. Here, four signiﬁcant NEPIC members talk to NGP about their experiences supplying outsourced products to the pharmaceutical sector – Aesica Pharmaceuticals, Piramal Health Care, Shasun pharmaceutical Solutions and Fine Organics Limited, whose businesses in this region are approaching 200 years of experience in this activity.
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NGP. Life within the large corporate organisations clearly did not suit your business model. What was it that drove your organisation to its current business position? Aidan Walker. Although the move out of big pharma wasn’t one that the majority of staff welcomed at the time of transition, the ability to clearly make a real difference and, to a large extent, meaningfully inﬂuence their own futures is a change that many are now very positive about. The growing variety of business has also allowed us to capitalise on the wasted inherent capabilities that had previously lain dormant within many of the staff. Kevin Cook. Speed, ﬂexibility and service have always been the cornerstones of our offering at Dudley. The acquisition by Shasun has allowed us to become a more signiﬁcant part of a more focused organisation, enabling faster decision-making and greater responsiveness, with a common goal across the entire organisation of providing the highest level of service to our pharma customers. Keith Hanson. Our business model is driven by customer service, ﬂexibility and rapid response, which ultimately adds value to our customer supply chain and minimises risk by reducing time to market. Being an independent company, we are able to make decisions quickly and expedite solutions with minimal bureaucracy. Also, the ability to freely explore a wider spectrum of market sectors increases our scope of business opportunities signiﬁcantly. Keith Payne. The need for more entrepreneurial and innovative thinking to adapt faster to market conditions and customer requirements.
NGP. Manufacturing for the global pharmaceutical market as you do, what are the priorities that are being demanded by your customers? KP. Globally, pharmaceutical customers are looking for us to be reliable, resourceful, ﬂexible and competitive. KH. Security of supply, high standards for safety, health, environment and quality, technical innovation and optimum cost. AW. On the whole the demands are the same as they have always been: on time delivery, at the right quality, at competitive prices. There is growing pressure on prices as would be expected and also a growing requirement to be able to demonstrate a secure supply chain. KC. With the continuing trend toward outsourcing and a growing dependency on external manufacturing, assurance of supply remains a key priority for our customers with technical expertise, on-time delivery, right ﬁrst time production and comprehensive quality, and HSE systems and controls being essential components of a successful supply chain. Within an ever more competitive landscape, this is very closely followed by cost. NGP. Innovation has always been a key driver for outsourcing of products in the sector. How has this inﬂuenced your business strategy? KC. At Shasun we recognise that innovation is a critical aspect of supplier selection, complementing the beneﬁts of continuous improvement and operational excellence with the ability to deliver step changes in quality and cost. Innovation is a key element of Shasun’s offering and is delivered through two main platforms, manufacturing innovation,
Aidan Walker is Site Manager at Piramal Healthcare, Pharma Solutions. Prior to this he had a number of leadership roles. On the sale of the Morpeth site to Piramal, Walker was appointed Site Leader and has led the site through its transition from a supply site to a standalone business unit within Piramal.
Keith Hanson is Managing Director at Fine Organics Limited. He spent 28 years with Laporte and Evonik Degussa, latterly as General Manager of Seal Sands. Hanson has managed most of the functions on site and in the process has acquired a practical understanding of the internal and external dynamics of the business.
Kevin Cook is Operations Director at Shasun Pharma Solutions Ltd. He has over 22 years’ experience in chemical and pharmaceutical manufacturing and has held a range of managerial positions in the areas of HSE, supply chain, operations and new product introduction. Prior to joining Shasun Pharma Solutions in 1992, he served in various operational roles with Boots Pharmaceuticals.
Keith Payne is Sales and Marketing Director at Aesica Pharmaceuticals Ltd. He joined Aesica in 2007 and became Sales and Marketing Director in July 2008. Prior to joining Aesica, Payne was Senior Vice President, Product Development Services at NextPharma and was previously Commercial Director for Clariant Life Science Molecules (formerly Archimica Fine Chemicals).
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with the application of new manufacturing techniques to deliver costeffective solutions to our customers; and combining dedicated R&D resources with regional collaborations and a world-renowned scientiﬁc advisory board to drive the application of innovative technologies, such as Shasun’s proprietary Fluorination, ABF and HKR technologies, and bring novel synthesis solutions to our customers. KP. Our business strategy is driven by the goal of providing innovative services, approaches and special capabilities for synthesis and formulation of pharmaceuticals, which is responsive to our customers needs for outsourcing. KH. We are a toll manufacturer of pharmaceutical intermediates and hence on many occasions the processes supplied are relatively ﬁ xed by registrations to the regulatory authorities. Innovation has to be looked at in the fullness of the supply chain, starting with the most efﬁcient use of assets. AW. Innovation for us has primarily been focused around developing our one stop shop offering. With this in mind we have invested heavily in capabilities that extend the scope of our offering beyond traditional manufacturing. These include both development capabilities in API and formulations, as well as a brand new clinical trials services unit.
“In the North East of England, there are companies working across the whole pharmaceutical supply chain”
NGP. As productivity is key to effective cost control and pricing, how has your involvement in your region’s improvements, through NEPIC and One North East, beneﬁted your business? KH. Our CI programme has been driven by the site management, supported by local expertise as and when needed. We have had tremendous support from One North East over the last four years. Our CI training programme was support by NEPA and NAC and latterly we are working with NEPIC to improve our business support mechanisms. AW. We have received signiﬁcant beneﬁt from involvement in a number of these programs. Right now we are coming toward the end of our narrow and deep intervention, after which the whole workforce will have attained the skills necessary to ensure we can drive productivity improvements from shop ﬂoor level upwards on a sustainable basis. KP. Aesica has certainly beneﬁ ted from our staff participating in NEPIC and One North East seminars, which raise awareness on industry best practices, operational efﬁciency and other measures that improve productivity. KC. Through NEPIC, Shasun has participated in a number of manufacturing and energy efﬁciency programs, sharing best practices and benchmarking across the cluster to deliver tangible beneﬁ ts to our business. For more information, please visit www.nepic.co.uk 74
There is an ever-increasing pressure on the price of drugs arising from governments across the world. There is also a growing moral obligation to supply cheaper medicines to less economically developed countries. Furthermore, pharmaceutical companies have the strategic need to focus their management expertise on researching and developing the next generation of pharmaceuticals. All of this has given added intensity to the manufacture of cost-effective pharmaceutical ingredients. Companies like Aesica, Fine Organics, Piramal and Shasun, by providing a range of outsourcing opportunities, and a service that is efficient, of high quality and flexible, have become key partners in the pharmaceutical supply chain. Within one hour drive time in the North East of England, there are companies working across the whole pharmaceutical supply chain. They represent over 33 percent of the UK’s pharmaceutical GDP. This sector is provided with a wide range of support services via the regional development agency One North East, including world class activities such as the Centre for Process Innovation and NEPIC.
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TONE UP 76
How Steve Dreamer is whipping Novartis’ manufacturing process into the best shape of its life.
teve Dreamer always knew that achieving his desire to change the way in which European pharmaceutical management operated would be painful, but as he discovered, with much pain comes much gain. “We started off in the US in implementing some of our operational excellence programs and we proved that they worked there, so then we brought them over to Europe,” says Dreamer, Global Head of Pharma Engineering for Novartis. “There was some scepticism up front as to whether this would this really work or if this just an American way of doing things; Europeans often like to have 100 percent of the answers before making a decision. “We were able to move very rapidly in the US on some of our implementations and they recognised that and admired it, saying, “Well how do we get our people to think differently? What can we do so that they can adopt some of this 80/20 type thinking so that we can move forward as well?”
One of the key ways in which Novartis developed their process teams to bring about a change in managerial direction was to put the quality control laboratories within the process team. The traditional thinking would be for the quality control laboratories to stand alone, as a separate group. Dreamer argues that by combining the two, there is an increase in open communication and an improvement in quality. “What the agencies are really looking for is to be able to solve these problems collaboratively, not the previous confrontational type arrangement. As we try to collaborate with the agencies, this builds a level of trust and comfort, so by doing that and showing that these changes are accepted by the agencies, that helped open up communication,” he says. “When there’s a new technology on the market, people often buy it, thinking it to be ‘cool technology’: it runs faster and makes things prettier. They implement it and then they forget about the other elements. So it may be a fast piece of equipment but if the materials don’t allow you to run fast you don’t get any gains. If the process is upstream and downstream of that new piece of technology, and if they aren’t in line, you don’t gain anything, and if the people aren’t on board you certainly don’t gain anything either. “So we always look at those for elements to make sure that things are in sync. When we look at an improvement we try not to look at just a silo or unit operation, we try to look at what’s the impact of the business. If we want to change the business we look the process of material and the operations that are going to impact the business. Then we look at the roles of the people, and then finally the people that are in those roles. We always follow that formula and it seems to work,” says Dreamer. Originally, the changes that came in the traditional way did so via a person joining, changing the organisation, bringing in new people, and then letting them pick the process. However, this system was simply not efficient enough for Novartis, who have instead decided to ﬂip the process around.
Management change “We do this on a local scale, as well as on a global scale. There’s a change management program that goes with it, which makes everyone aware of how uncomfortable the change is going to be, so we take people through this training and we support them. “The most important thing of all of this is the leaders. We’re trying to develop them as coaches, not as managers. We don’t want people that are going to go out and tell their operators and workers what to do. These people know better than anyone how to make medicines, so what we want to do is coach them, and that helps them through the transition,” he explains. Novartis’ structure can be described as the creation of a much ﬂatter level of management organisation. The company first determines the various places in which people with specific qualifications are needed, and then puts the right people in those places. Dreamer explains that if this is done in the right way, then management are able to take a step back, and the operations should be able to successfully run independently.
Steven Dreamer speaking at the NGP summit “If you don’t address the process first,” says Dreamer, “If you just go in and try to do cultural training, you don’t gain anything. I’ve had a lot of people say, ‘We don’t want to change our processes. We just want to change the culture.’ “I’m not convinced that simply changing the culture will work because, although you may change people to think differently, they don’t act differently. By changing the process they have to act differently and that forces them into a new way of thinking. Then you get a culture change. If you do that in the right way, they can’t drift back to the way it used to be. You’ve eliminated all the different levels of management. “In some of our sites we had eight levels of management. Today on all of our sites we’re at three levels. There are one or two still at four and they’re moving to three levels. When you get to that point you’re never going to come back in and add layers, so you only hire the people that can work within this new framework and we’ve done that for 18 sites now quite successfully,” he says.
“Part of the reason we’re successful is that we’re consistent, we do the same thing every time and it’s very predictable” Target 2010 Successful is certainly an accurate word with which to describe Novartis’ management change, with a full implementation of a Lean structure almost in place. Dreamer attributes this to the managerial adoption of a “top-down vision”. “You can’t just sell – people go out and do Lean or people go out and do improvements. They’ll walk different directions so you have to bring it together; they want something to work towards so we try to put this vision in place. We call it ‘Target 2010, The Toyota of Pharma’, which is a fi ve-year plan. We put it in place in 2005 and it’s running through 2010, and we never waver from the program.
“Often in large companies each year they come out with a new ﬂavour, but we’re trying not to do that. We have a vision as to what we want the supply chain to look like and we work toward that bottom up. We enable the people, we give them the tools, we describe what processes we want and we let them work. They start at the low level site-by-site and we start connecting it together, adjusting the people as we go. “Some of these new supply chain techniques are not learnt in university. Nobody else in the industry has done it, so you have to create the people and that takes time. You have to bring them along, educate them, and sometimes you have to change people as well, but eventually we work toward that vision. We have measurements along the way that we look at: throughput time, customer service levels, productivity and overall asset effectiveness. You monitor those and you advance in one area, and then you work in the other area. All of those things have to line up well in order to really achieve that vision,” he explains. However, the implementation of Target 2010 does not necessarily mean a rigidity of the system. With learning, change becomes necessary. “One of the things that we always tell our people is identify 80 percent of it and go. Twenty percent of it you’re going to have to figure out along the way. If we tried to get all 100 percent we’d never get anywhere. Somebody asked the other day,
As Head of Novartis’ Global Pharma Engineering & Innovation Quality Productivity, Steve Dreamer is responsible for providing technical and project management for the major capital investments, and for building operational excellence capability for the TechOps organisation to achieve Target 2010, The Toyota of Pharma Vision by embedding Lean, process oriented organisation and other re-engineering processes.
‘Okay, 2010 is next year. What’s the next vision?’ We don’t know. We’re comfortable in saying, ‘I don’t know’ because when we get there we’ll figure out the next step. If we start thinking about it now there’s still opportunity over the next year to realise certain improvements and we may forego something if we try to do it too soon,” he explains.
“We have a vision as to what we want the supply chain to look like and we work towards that bottom up” By the end of 2009, the vision for Novartis’ next plan is due to be implemented. Rather than a master plan, like the one implemented in 2005, this time around they are opting for a step-by-step proposal, allowing them to continue learning on the way. The established values of Novartis’ traditional structure are steadily being replaced to encompass a learning organisation, and change the culture in which managers think, encouraging them to be positive about the changes and inspirational as to what the next steps should be.
Continuous manufacturing Another policy that Dreamer is championing is continuous manufacturing. He explains that one of the advantages of the creation of a Lean structure is to reduce overall throughput time end-to-end, from the first chemical step all the way through distribution. “In some cases, for major products, we’ve been able to go from 550 days down to 200 days. If you continuously manufacture, you conceivably go from 200 days down to 35 days or less, and it’s not just changing existing batch processes and connecting them together in a continuous way, but it’s changing the chemistry. “One of the advantages is that there should be significantly less capital investment. We combine all of the steps of the drug product together into one manufacturing step and, because you put stuff in one end of the pipe and you get tablets out the other, you can control quality better. You don’t have all of these intermediate tests that you have to deal with. No other company has done this. It’s a 15-year journey for us: we’re in pilot now this year and we’re starting to see some progress with it that makes us believe it’s going to be real,” he explains. The move to Lean and the push for continuous manufacturing are coalescing that vision, which is displaying the innovation part of the process. Dreamer notes a Lean program already in place, Innovation Quality Productivity (IQP), which focuses on the quality removing variability from our processes. He explains this to be the typical Six Sigma, whereas the innovation part of pharma to be a little more difficult.
being innovative and trying new things. Part of the reason we’re successful is that we’re consistent, we do the same thing every time and it’s very predictable. There’s no room for innovation in the way you make the products. However, if you can redesign the whole process, innovation can make a difference there and we believe this might be a strategic advantage for us in the future. “Innovation in the pharmaceutical industry is producing products that solve disease issues in a different way: it’s the overall health of it. Is it important to have innovation in the way you make the product? We’re not in the business because we make the product. We’re in the business of healing, of solving unmet medical needs. That’s the innovation part and that’s where the industry really should focus: on making the product. “We should be able to make it with the highest quality, with the fastest time, and with the lowest cost, and if innovation can help drive that then we will look at it, but innovation in making product brings probably not a lot of benefit to the customer in the end. Ultimately, they’re going to get a tablet and they won’t know if innovation took place in there, not like an iPod or other devices that a consumer would see. So for us, innovation is improving quality, reducing cost, or being more responsive to market demand, but the real innovation for pharmaceutical is in the patient healthcare,” Dreamer concludes. n
Innovation “We’re innovative in the products that we develop, but we don’t want to have operators running around the plant
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Meeting the challenges of supply chain regulations NGP speaks to a panel of experts about the changes affecting the pharmaceutical cold chain. NGP. The pharmaceutical industry is subject to increasingly stringent regulations regarding its supply chain. What challenges does this present to companies? Jean Bédard. Companies involved throughout the pharmaceutical supply chain must comply with the new stringent regulations on the storage and transportation of pharmaceutical or medicinal products. One challenge is to gather all the necessary data and information to have a clear understanding and knowledge of the storage and transport conditions that prevail throughout the supply chain. This can be a long and complex process as it involves uncontrolled environments (transports, seasons) and many potential stakeholders, such as wholesalers, transporters, pharmacies, etc. While pharmaceutical warehousing and storage zones are controlled environments and are easier to validate, uncontrolled environments such as those observed during the transportation and distribution of drug products (ground, sea and air) certainly represent a challenge to companies. Another challenge is to reach a pharmaceutical supply chain that is both fully compliant and economically sound. An optimal pharmaceutical cold chain should ultimately provide compliance but limit the additional distribution costs. Richard Harrop. I am often tasked with evaluating the impact of new regulations and industry guidelines on a company. When doing this it is vital to understand the key focus areas; performance and price. Do new regulations demand greater performance and will this greater performance increase cost? NGP. What methods can companies use to comply with these regulations? RH. Partnership is key. The pharmaceutical manufacturer, logistics provider, ancillary packaging designer and data-logging supplier should be discussing the project together from day one. Building this team ensures clarity is present throughout the development process and all aspects of the supply chain can be considered.
JB. There exist various methods to be used in order to reach cold chain compliance. Our approach is to start first with an exhaustive cold chain regulatory gap analysis where the pertinence of the cold chain regulations, as well as the extent of cold chain management actions to be applied, are verified and established in regard to the audited company and supply chain. This preliminary step enables us to develop a cold chain compliance plan that can be orderly and progressively implemented to the company and its supply chain.
“The interest in creating more robust and effective cold chain solutions has grown dramatically” Richard Harrop The compliance with cold chain regulations will require acting on various cold chain quality aspects, from optimising stability and temperature excursions test studies, updating the cold chain quality system (personnel training, procedures, quality agreement), validating all cold chain processes and equipment (mapping of warehouses and storage areas, temperature profiles study during transport, I/O qualification of temperaturecontrolled storage systems), up to installing cold chain monitoring where needed (temperature-controlled storage and transportation areas, shipments and products).
NGP. What tools are available to enable companies to maintain the integrity of their products during the manufacturing and supply chain process? JB. Cold chain monitoring and packaging systems are the major tools to maintain the integrity of products during the manufacturing and supply chain process. We now have efficient and user-friendly Richard Harrop is the Commercial and Technical monitoring systems to automatically and conManager of SCA Cool Logistics and has been involved in tinuously monitor the environmental condithe temperature control packaging industry for six years, tions during the handling, storage and initially in packaging design and then moving into the transportation of pharmaceutical products. commercial field. Companies have access to new technologies Qualified in structural packaging design, Harrop such as monitoring solutions, wired/wireless previously worked as a technical designer for the FMCG sensor networks, data loggers and thermosector before moving into the world of temperature couples to effectively monitor manufacturing control packaging where he has worked predominately facilities, warehouses and storage areas, storwithin packaging technology. age equipment, transport, shipments and He has developed and implemented several products in transit. Furthermore, special atsuccessful temperature control solutions for many of the tention should be put on new RFID sensing world’s leading pharmaceutical corporations. technologies that enable us to track and trace cold chain products and shipments.
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As for monitoring, shipping and packaging technologies are evolving to offer better thermal protection and performance and to conform to logistic needs. New conditioning and insulating materials (VIP, polyurethane, phase change materials) are introduced while reusable temperature-controlled containers are proposed for international shipments. Another important tool to be developed resides in temperature-controlled transportation modes (e.g., temperature-controlled ground trailers). RH. Over recent years the interest in creating more robust and effective cold chain solutions has grown dramatically. Even without the pressure of regulations, companies seem to have even greater desire to ensure product integrity. However, we still come back to the debate of performance versus cost. At SCA Cool Logistics we have dedicated resources to exploring the possibilities of new cold chain solutions and by working closely with all our industry partners we have been able to develop solutions that meet both performance and cost requirements. Today our pharmaceutical partners can select solutions that come readyqualified against real-world temperature data, offer controlled cooling and heating without batteries or preconditioning, hold loads from one litre up to 800 litres and beyond and last for a single shipment or can be reused. They can also be returned to us for cleaning and can reach durations exceeding 120 hours, regardless of ambient conditions, and are thermostatically controlled. NGP. How do you see the pharmaceutical supply chain developing in the future? RH. Green solutions that fulfil a company’s corporate social responsibility whilst addressing the need for maximising cost-effectiveness – these are the systems of tomorrow. Environmental accountability is already bringing considerations regarding recyclability, carbon emissions and energy cost. Cold chain is one part that can be re-evaluated from a green standpoint. Green solutions already exist, but what must be considered is how they are implemented. The green credentials of a solution must be measured alongside how that solution is used. Will components need to be conditioned within refrigerators or freezers? Are suitable facilities available to break down the biodegradable container? How many miles does the reusable system need to travel before it returns to its point of origin? If we look at two different products, ZeoCool and GREENBOX, we can
see that both have the possibility to solve to green issues, but in very different ways. The ZeoCool system uses the process of evaporative cooling which removes the requirement to pre-condition components; this is an environmental benefit considering that Europe’s refrigerators and freezers account for 62 million tonnes of carbon dioxide emissions every year. ZeoCool offers reduced total system payload, which in turn reduces the transport or fuel consideration; simpler packing process, which means reductions in occupied packing space and man-hours; and no requirement for costly and energy-hungry refrigerated transport. GREENBOX is a completely sustainable thermal packaging system, created with 100 percent recyclable, organic-based, non-toxic and some fully biodegradable components. The resilient nature of GREENBOX means customers can use one box up to 50 times. Reclamation centres gather used GREENBOXes and inspect, clean and re-certify them for re-use.
“An optimal pharmaceutical cold chain should ultimately provide compliance but limit the additional distribution costs” Jean Bédard GREENBOX’s innovative materials are 100 percent recyclable. When the hard plastic outer and Thermal-Lok insulating panels reach the end of their lives they are ground down and made into new shells and panels. In addition, GREENBOX features biodegradable, non-petroleum, non-toxic phase change materials. Customers can save up to 65 percent on distribution-related expenses due to GREENBOX’s unique, reusable design. Because GREENBOX maintains temperature for up to five days; customers can ship road freight – even on Fridays – resulting in up to 65 percent reduction in shipping and distribution costs.
JB. As for the drug development side with GLPs, the manufacturing side with its GMPs, and the clinical trial side with the GCPs, the pharmaceutical supply chain side is going to be significantly impacted with good storage and distribution practices to ensure the highest levels of security and safety for the drug products going throughout the supply chain, from the manufacturing facilities handoff up to the final end-users (patients). Jean Bédard is Chief Executive Officer Cold chain compliance and anti-counterfeiting are cerof Alternatives Technologie Pharma Inc. tainly the two major pillars in making the supply chain He has led the company and its more secure and safe. As a consequence, a great regulaimpressive team of cold chain and tory emphasis will be put on these two aspects, thus leadtrack and trace management experts ing to more generalised good storage and distribution since 2003, and has managed more practices in the pharmaceutical supply chain. than 100 cold chain compliance In the near future, we will probably see a more speprograms in the life sciences and cialised pharmaceutical supply chain, meaning a supply healthcare sectors. He holds an MBA in chain where stakeholders such as wholesalers or transBio-industry Management. porters will be more focused on providing services and quality that fulfil the new pharmaceutical supply chain requirements. n
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R ing ing t he
changes Moncef Slaoui has been working hard to restructure GlaxoSmithKline’s R&D organisation in order to ensure the company’s future. But will he succeed in keeping his team on top in these challenging times? Marie Shields investigates.
s part of a company-wide restructuring that began in October 2007, GlaxoSmithKline announced last autumn that it would shed 850 research jobs in Britain and the US, and earlier this year the company warned that it might be forced to make further cuts in an effort to cut costs by €2 billion over two years. When asked about the job cuts, Moncef Slaoui, GSK’s Chairman of R&D, says, “It is difficult to tell people who have been working for you for a long time and doing their best to discover medicines that now they are going to lose their jobs, because we can’t continue doing things the same way we used to do them. That in order to stay at the top, we have to redesign our organisation. It’s a very difficult message. It definitely impacts the morale of the organisation and the motivation of those losing their jobs, and also their colleagues who have to see that happen. It’s one of the big challenges of changing an organisation. “Scientists are faithful to their projects and to their science. They do their best for their projects. It’s not because they fail individually that they lose their jobs. Globally there may be an element of failure, or at least of limited success, because we haven’t had enough blockbusters coming through, but on an individual basis and a small team basis, it’s very hard. I’m confident that this strategy and these changes will make us even more successful, but there is still a period of adjustment – of grieving, if you will. “We know that we’re making changes that will make us stronger in four or five years. If we don’t make them now, we’re not going to be standing when it’s havoc in the industry. But it’s hard to relate that to an individual who may be losing his or her job today.” Slaoui’s task must surely be made easier by his own participative management style. He summarises his style with this anecdote: “A few months after I became Chairman of R&D, I had a meeting with the 60 most senior R&D leaders to discuss my vision and the strategy we’d
be pursuing. One of the participants said at the end, ‘This is amazing because it’s such common sense. It’s not sexy and it’s not crazy, but it’s so pragmatic that we believe in it.’” Before he joined GSK 17 years ago, Slaoui’s previous career was in academia, and he is acutely aware of the differences between the two. “In academia, partial success is still success,” he says. “You can publish a paper in one of the great journals – Nature, let’s say, or Science – and even if your paper is 95 percent right and five percent wrong, it will still be considered a success. In pharmaceuticals, either you’re 100 percent right and you have a medicine, or you’re one percent wrong, and there’s no medicine. This makes a dramatic difference, because if your medicine has a safety problem, you cannot give it to a patient, even if in 99 percent of its features, it’s fine. That raises the bar so much higher.” In industry, no matter how bright you are, a host of other factors need to fall into place before science leads to a treatment that can be given to patients. Slaoui points out that this makes you more pragmatic, and more wary of trends. In academia, by contrast, researchers will often publish numerous papers in each new publication that comes along, even if none of them is particularly transformative. Another thing Slaoui learned from his time in the ivory tower was to seek out people with what he calls ‘educated intuition’. “Science and innovation are a mix, a kind of art that combines deep expertise and intuition. You can’t put your finger on it – some people have it and some people don’t. Some people are more often right than wrong, and others – unfortunately most – are most often wrong and rarely right.”
Meeting the challenges One of the biggest hurdles Slaoui has had to overcome since taking on the Chairman’s role in 2006, he says, stemmed somewhat counter-intuitively from the fact that the performance of GSK’s R&D was already pretty good. He explains that applying a vision to strongly
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enhance performance is harder to do with an organisation that is reasonably successful – it’s easier to drive change when you’re obviously on the verge of disaster. “From a management and a leadership standpoint, that’s certainly where most of the challenge stems from, because you have to deliver a contradictory message between acknowledging and praising the current successes, and then pushing hard for change. “Another related challenge is to introduce a different culture into the organisation and make changes while continuing to deliver. It’s a bit like fixing the engine of a jumbo jet at 40,000 feet and making sure it doesn’t crash. That’s fascinating and very interesting.” (And most people would add, also more than a little dangerous!) Of course, Slaoui’s job is not just about challenges; there are opportunities as well. He is full of praise for the talent that exists within his organisation. “It’s extraordinary to see the amount of talent we have. There are 15,000 people in R&D, and there is such diversity and richness. One of my main focus areas is to make sure this talent is identified and recognised.”
helm of everything you do and never settle for less. Second, empower the talent and the people who have the expertise and the depth to do the work that needs to be done, versus telling them what they need to do. “It is those who have the depth of expertise in the particular area of research they’re working on who are best equipped to make the right decisions,” he says. “This is versus having a few leaders in an office somewhere telling them what they should do, which is usually wrong. “But at the same time, we should hold them accountable, because that’s one of the things we didn’t do well before. Set expectations very clearly, generate a culture and environment where people feel safe to make guesses, to have judgments, to make choices and take risks. We need to remember that this is not an academic centre, and we do expect them more often than not to succeed.” Slaoui hopes to achieve this by creating much smaller units to drive the engine of R&D. These new units – small groups of between 30 and 60 individuals – will be called discovery performance units (DPUs). Three-year to five-year business plans will be judged by an investment board made up of venture capitalists, bankers and other Surviving and thriving experts, as well as scientists. No one can deny that the pharmaThe units will have clear deliveraceutical industry is facing a time of sigbles, and the deep scientific expertise nificant change, with patents expiring they need to discover medicines, and, and new blockbusters harder to come as Slaoui puts it, they will either deliver by. According to Slaoui, the move to geor they won’t. “When you’re in such a nerics stems partly from the fact that situation, you perform better; you have payors have realised they can be much an opportunity to exert your passion Moncef Slaoui is Chairman of Research and more powerful; that they can use gebetter. You need to empower people and Development at GlaxoSmithKline. He is a neric medicine and that they can make give them the time and the resources to member of the Corporate Executive team and it harder for a new medicine to be paid do what they need to do. the Board of GlaxoSmithKline plc. In his previous for and to justify its value. Regulators “We’re doing several things at position as Senior Vice President, Worldwide have also substantially raised the bar once. First, we looked into the basic Business Development and External Alliances, he in terms of the safety they expect from science and asked, ‘Where is fertile spearheaded changes in R&D to enhance drug novel medicines. ground for discovery to happen?’ We discovery and accelerate product development. “There will come a time when a didn’t look at the market. We didn’t say, Previously, in GSK Biologicals, he engineered the significant number of players in the ‘Where are we selling a lot of drugs?’ development of a robust vaccines pipeline. industry will disappear and only a few We said, ‘Where is the raw material for will remain around the table,” Slaoui great discovery to happen?’ And we says. “Those who remain will be those identified eight areas. Then we said with a strong R&D pipeline and a strong R&D organisation. GSK will to our teams, ‘If those are the areas in which there is fertile ground be one of those, because our business model is based on innovation to discover, why don’t you use your creativity? Come to us with your and the discovery of novel medicines. That’s the name of the game for plan, come with a budget request, and then you have a three-year those who will survive. period to exert your creativity.’” “For this reason, we have no choice but to organise our R&D orSlaoui says this new structure has transformed the way the disganisation for maximum success. And that’s what we’re doing. It’s why covery groups are working, because they moved from a culture where I’m pushing for quite significant and profound changes, despite the people had a sense of entitlement and never had to answer questions, fact that our organisation is already pretty successful. Because pretty with everybody hoping they would deliver something, to a culture good is not good enough; outstanding is what it’s going to take.” where they have to earn what they have. The changes Slaoui is pushing for go straight to the heart of what “The same principle is being driven across the organisation. We makes an R&D operation a success: first, put the best science at the have much smaller project teams, and individuals work on a single
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WHO PRIORITY DISEASES Moncef Slaoui, Chairman of R&D at glaxoSmithKline, outlines the company’s work on the WhO priority diseases: hiV/AiDS, tuberculosis and malaria. “We are absolutely committed to ﬁghting the diseases of the developing world. i spent my ﬁrst 15 years in the pharmaceutical industry in vaccines; i was personally strongly involved with our malaria vaccine, for instance, and the hiV vaccine. We have a dedicated pharmaceutical R&D center in tres Cantos, just outside of Madrid, that’s focused on discovering medicines for malaria and tuberculosis. And we have substantial public-private partnerships with the gates Foundation, with the Malaria Vaccine initiative, with Medicines for Malaria, and others. On the vaccine side, we have signiﬁcant malaria vaccine programs that are currently in phase iii trials in Africa; and also programs for tuberculosis and hiV. We have a strong rotavirus program, having just launched our Rotarix vaccine. A rotavirus is a virus that causes diarrhea in babies, and between 600,000 and 800,000 babies die every year in the developing world from rotavirus-induced diarrhoea.” Aids virus attacking healthy cells. project or two and not on 10. In this way, we are re-personalising R&D. What happened in the last two decades is that we, as an industry, thought we could industrialise R&D in the same way we industrialised manufacturing: ask people to be excellent in a very small task and do it on many different projects. “But R&D doesn’t work that way. R&D is about insight, it’s about expertise, it’s about judgment; and that comes from depth of understanding and from spending time, a lot of time, in a given area – it’s about depth and not breadth. Breadth is important in a few places, but it’s not important that everybody has breadth; it’s very important that most people have depth in the area they are working on.”
Partnering up Slaoui again stresses the need to open up GSK’s R&D to the outside world, because good ideas don’t occur in a vacuum. To this end, the company is ramping up its partnering efforts. “Like others, we partner; but in contrast to others, when we partner we don’t tell our partners how they should do things, because what we value is diversity,” Slaoui explains. “We listen to how they do it and let them do it. We trust them.” GSK recently announced two major partnerships with Harvard institutes, which Slaoui says are aimed at the onset of very basic science, an almost symbiotic relationship with discoverers and innovators at that level. This allows the company to do two things: keep its internal science cutting edge; and have its own scientists spend time in academia, and in exchange have university scientists spend time in industry. “This works well, because they are usually fascinated and come to understand how valuable and rewarding the work we do in industry is. And many of them will, I hope, join us as great talent. “We also have many partnerships with biotech companies here in Europe, in the US, and farther afield in countries like India. We now have 60 programmes in our pipeline that are completely run by biotech companies. Recently we signed a deal with a company in Switzerland for a revolutionary sleep medicine that’s in phase III; and also with Valiant for a schizophrenia medicine. “Sometimes when we think there is a transforming platform technology or approach that will really change medicine, we acquire
it. We’ve done that twice in the last year. We acquired a company called Domantis that has a technology that will transform the way we make antibodies. We also acquired a company called Sirtris, which works on sirtuins, enzymes involved in longevity, diabetes and inﬂammation. If we can crack that nut – and I think the Sirtris people are the best placed to do it – and make medicines out of sirtuins, they will truly be transformative.”
Going global For historical reasons, most pharma companies have based their R&D exclusively in the West, between the US and Europe, but as Slaoui rightly points out, two-thirds of the earth’s population lies outside of those regions. With growth in healthcare costs in developed countries already showing signs of slowing, many pharma companies have developed a sudden interest in moving into new parts of the world, in terms of both sales and research. Pfizer, for example, recently announced that it will set up a unit focusing on emerging markets, and sanofi-aventis is pushing into eastern Europe with its purchase of Czech genericdrug maker Zentiva. A cynic might say that this move is prompted less by a heartfelt desire on behalf of these companies to improve health conditions across the world, and more by the lure of untapped potential profits, or as a way of conducting clinical trials on the cheap. But Slaoui remains convinced that establishing research bases in these areas can only have a positive impact on the advancement of scientific research. “Places like China or India or South Korea or even Latin America have great scientists and great ideas that are often neglected. We have a strategy to find the talent wherever it is. We opened a big center in China, not with the intent of sourcing low-cost research, but to access the best scientists and the best discoverers. Our motto is: ‘We’re going to move from Made in China to Discovered in China.’” It’s clear that Slaoui is determined to keep GSK’s R&D at the top of its game, whatever the challenges. And after spending even a relatively short time in his company, you get the feeling that he will most likely succeed.
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WATERS ATE:co proof 08/04/2009 14:43 Page 90
ASK THE EXPERT
Storm warning How the Beijing Olympics, Hurricane Ike and the slowed auto industry are causing headaches for pharmaceutical scientists.
n general, a scientist in a pharmaceutical laboratory would not expect a major sporting event, a hurricane, and the struggling automobile industry to impact his work. Yet these seemingly unrelated events are providing a significant challenge to scientists who rely on liquid chromatography. Why is this so important to the pharmaceutical business? Every pharmaceutical laboratory has them – liquid chromatography systems are an indispensable tool in conducting effective R&D and product release testing. Typically, the solvents that are used with these systems come with a considerable operational cost – thousands of litres that add up to hundreds of thousands of euros per year. One of the most used solvents in the laboratory is known as acetonitrile. Ahead of the games in Beijing, one of the world’s largest acetonitrile manufacturing plants was shut down to reduce area air pollution. To date, that plant has not been restarted. Hurricane Ike forced the closure of a second large plant in Texas. And finally, access to acetonitrile as a production byproduct of a polymer used in automobiles is tight, as consumer demand for cars lags.
“The impact on analytical laboratories is being felt across all industries” The impact on analytical laboratories is being felt across all industries that depend on liquid chromatography. Suppliers have notified clients they will be unable to fill all acetonitrile orders. Laboratories at leading companies are searching for solutions to maintain their missioncritical laboratory productivity. This situation is prompting companies to quickly evaluate their current liquid chromatography systems and their associated acetonitrile usage requirements to ensure uninterrupted laboratory operations. “The time for ACQUITY UPLC System adoption has never been clearer,” says Rohit Khanna, Vice President of Global Marketing for the Waters Division of Waters Corporation. “Laboratory-dependent businesses and government agencies around the world are facing difficult decisions be-
cause there is simply not enough acetonitrile available to efficiently run their labs using traditional liquid chromatography technology. As these organisations evaluate their options, the innovations behind UPLC technology provide the best solution to today’s crisis and safeguarding against future risk.” Working with its key customers, Waters estimates that replacing traditional high performance LC (HPLC) with ACQUITY UltraPerformance LC (UPLC) reduces acetonitrile consumption by up to 95 percent without compromising productivity and performance. The ACQUITY UPLC System allows scientists to perform required analyses, such as quality assurance and quality control tests, using fewer resources than HPLC. Because the system operates with a lower flow rate and separates samples in less time, UPLC uses significantly less solvent, including acetonitrile. The result is the ability to maintain or improve lab productivity and performance, with reduced costs and reduced external pressures associated with the current acetonitrile shortage. With the acetonitrile shortage expected to last the better part of 2009, current UPLC users are experiencing a competitive advantage. UPLC provides a short-term solution to the crisis while also offering long-term security, a means to demonstrate environmental responsibility, and increased productivity many times over. n For more information, visit www.waters.com/green.
Leaping ahead in translational medicine Brian Kotzin, Vice President of Medical Sciences at Amgen, tells Marie Shields how biomarkers help translate basic science into medicine.
rian Kotzin is the first to admit that his background is a little unusual compared to that of his senior colleagues at Amgen. “I was at the University of Colorado, at The National Jewish Centre for Immunology, now called the National Jewish Medical and Research Centre,” he explains. “I was a physician scientist and did the usual things they do in academic medicine. I’m a clinician, a rheumatologist, so I saw patients within the internal medicine and rheumatology setting. I also ran a laboratory, and I did a lot of teaching.” Kotzin’s appointments were in medicine, immunology and genetics. Over 25 years, he headed clinical immunology and rheumatology groups, as well as a centre of excellence devoted to autoimmune diseases. As this research developed, he realised the next step would be to develop it into a therapeutic, which can be hard to do in an academic setting.
Much of the work that Kotzin and his team carry out in medical sciences is related to biomarkers. “Our group is composed of combined groups from research and clinical development,” he points out. “For example, we have a molecular sciences group that’s devoted to molecular biomarkers, we have an imaging sciences group that’s devoted to advanced imaging biomarkers, we have a clinical immunology group that includes a group focused on cellular biomarkers, and we have the development group. It’s a very biomarker-oriented function here in medical sciences.” The goal of Kotzin’s studies is to maximise the information he gets from early clinical trials. Because the therapeutics are being introduced into a small number of people, it’s important to get as much information as possible, which is accomplished by dividing biomarkers up into different categories. “One of our biomarker-directed questions is, when we introduce a therapeutic into people, did we hit the target? Did we do what we really
another, and the importance of being able to make a strong conclusion regarding that failed molecule is critical. The team needs to know, if it has a failure, is it because the target that they chose was not the right target, or is it because the therapeutic they developed wasn’t the right therapeutic? “By knowing whether you hit the target and whether you covered the pathway, this gives you essential information you need to know whether the approach is going to be useful. If there was no effect on the disease, we don’t want to develop another molecule to hit that particular target. And you only discover that by having those biomarkers that tell you whether you did hit the target. “We may have a molecule, for example, where we have a safety concern. The question is, did we use it at a dose that was much higher than we need, or was it the right dose, or was it not enough? By having the information that says yes, we did hit the target, or we didn’t even reach the dose that we needed to hit the target, this will tell us what the next step is in terms of trying to develop something for the same pathway.”
“All of the science we do here is centred around how we take what we’ve learned in the animal studies, or in the preclinical studies, and move that into humans, so that we can truly understand things” Predictions
thought we did?” says Kotzin. “Then we ask, did we cover the biochemical pathway? Were the intracellular signaling pathways inhibited to the full extent that we thought they were? “Then we have biomarkers that are a measure of clinical activity. We can’t do large clinical studies where we use a clinical endpoint, like survival – we don’t do that in these early clinical trials. Instead, we try to incorporate biomarkers that will give us a clue as to whether we have a clinical effect. For example, if it’s a cancer therapeutic, did we shrink the tumor, or were the tumor cells killed within the tumor? “The last group of biomarkers that we try to get insight into are those that might predict who’s going to respond to a therapeutic. We call them stratification biomarkers or predictive biomarkers.” One other important category of biomarker is related to safety. Most therapeutics at this early stage do not work out: they fail for one reason or
Kotzin and his colleagues have had successes in which they have used biomarkers that predict the clinical effect. For example, instead of going to a several hundred-patient study that measures hemoglobin A1c for a diabetes drug, he has been able to measure the effect in a study with only 20 to 30 subjects, using biomarkers. “We were able to come to the conclusion that the drug really didn’t work, and it wasn’t going to work even if we studied many more subjects. That’s a great help. It’s much faster, and we expose fewer people to the therapeutic. “We get to make our conclusion earlier and faster, and we get to move on to other molecules within the portfolio. Within our cancer therapeutics, we’ve been able to see tumor shrinkage, we’ve been able to measure the death of cancer cells within the tumor. That’s really important early information that says, ‘Yes, this potentially important cancer therapeutic should be moved forward, so that we do larger studies and measure clinical effects like progression-free survival and overall survival.’” Kotzin’s definition of translational medicine is very closely tied to medical sciences. He defines it as the interface between research and clinical development. “When I think of the term ‘translational medicine’, I think of discovery research: animal studies, basic research at the bench. And then you move that science into clinical trials, trying to understand whether there’s going to be a benefit in patients. Translational medicine is that interface, moving it all forward. And it’s all the science that goes along with that transition. “It’s this interface of translating the discoveries you have – either in cell culture or in animals – into human disease. It’s a very difficult thing because the animal models are frequently not predictive of the human disease.
“We’re measuring pathways in animals, and we have to measure the same pathways in humans. All of the science we do here is centred around how we take what we’ve learned in the animal studies, or in the preclinical studies, and move that into humans, so that we can truly understand things. And it’s much more difficult. In an animal study, you can look at the whole animal to see whether your drug has had an effect. But in human studies, you may be limited to sampling blood. You have to be very ingenious, very innovative in how you get the information. This whole process is translational medicine.
Certainly one way to improve safety is not to inject all study participants at the same time at the beginning of the study. Instead, one individual is exposed to a very low dose, and if that causes no ill effects, researchers can feel more comfortable about exposing several people to that therapeutic. The dose can be gradually increased after the first subjects have been safely dosed. Animal studies are often carried out to provide enough information to ensure that the compound will not cause problems in people. But as Kotzin explains, sometimes a negative result in animals will not necessarily translate into humans. Approval “This is challenging because we’re sometimes faced with situations How difficult is it to get approval to carry out these early clinical trials? where we have an animal toxicity which we don’t believe will translate into Kotzin explains that there are extensive regulations that govern this humans. When this happens, we have to figure out how to get beyond the process. This is to ensure the safety of the problem and convince ourselves, investiparticipants when investigating a theragators and regulators that this shouldn’t peutic that has never been put into people prevent us from going into people, espeBrian Kotzin joined before. Patient safety is paramount. cially when the illness is grievous, such as Amgen in 2004, as Because of this, there are many regulaa cancer therapeutic.” Vice President and tions regarding what doses you can start Head, Global Developments at and what types of animal preclinical Inflammation There has been an explosion in basic studies you need in order to know that the Development, science, which has had a big impact in therapeutic is likely to be safe. before transitioning translational medicine, because there are These regulations have become much to his current so many new ideas and new discoveries more stringent in the last few years, because position as Vice that can now be translated to humans. As of the tragic outcome ofTeGenero’sTGN1412 President, Medical Sciences. He leads this Kotzin says, “The whole understanding of study. TGN1412 was a therapeutic that was integrated function comprised of Early disease has been an important developdesigned to target T-cells, but instead of inClinical Development, Molecular Sciences, ment for translational medicine. That’s very ducing the lymphocytes to not respond, it Imaging Sciences, Clinical Immunology, and dependent on new research technologies, triggered them to release massive amounts Computational Biology. Medical Sciences is which give us the ability to develop new of cytokines. One of the study’s major flaws responsible for the planning and execution molecular techniques. was in the decision to inject all of the particof early-phase clinical development as well “There have been tremendous adipants at the same time, and all who reas the discovery and implementation of vances in proteomics, and in how to meaceived the active drug became seriously ill. pharmacodynamic biomarkers in clinical sure intracellular pathways by measuring “That catastrophe understandably studies at Amgen. proteins that get phosphorylated. And colored early development around the world,” says Kotzin. “Although at Amgen we’re very stringent and we like to believe we would not have done anything like that, everyone became afraid of approving new therapeutics, especially biologics. Now nearly every time we apply to put a new biologic into people, the specter of the TeGenero catastrophe comes up. This has resulted in new regulations being put into place around the globe that delay the process. “I remember traveling to the MHRA and presenting a molecule that was an immunologic molecule, and we arrived shortly after the TeGenero tragedy. The regulatory group in the UK just didn’t know what to do. They were faced with the results of this tragedy and how to prevent something like that from ever happening again. “It became almost an irrational fear of new clinical trials, and we had to get beyond that using really strong science to convince people that our trials are safe. We’ve been trying to convince regulatory groups – for example, when we come forward with a new therapeutic – that the science predicts that this will be safe. We’ve been successful, but sometimes there has been an inordinate delay related to the fact that people are still afraid.”
there’s been a tremendous explosion in genetics in terms of the tools you can use. Now, you can screen the whole genome for polymorphisms that might affect whether your therapeutic will work in certain people and not others. “There are also new sequencing machines that sequence at an unbelievable rate, something that nobody even a few years ago could believe that we could do. And that’s added to the information we can add in our early clinical trials. We can sample tumors, for example, and do unbelievable amounts of sequencing of all the different genes that have changed in those tumor cells.” “We’ve also become more innovative in our clinical trials. We’re no longer fixed into the same type of experiments. We’re doing clinical trials where we learn as we go, right in the same clinical trial. We’ve combined different, single dose and multiple doses in the same trial. Again, ensuring safety at the same time we go, but increasing the information that we get, as well as the speed that we can move in terms of getting the information that we need.”
Tools for screening and validation Taqman SNP Genotyping Assays, developed by Applied Biosystems, are a state-of-the-art technology for screening and validation of polymorphisms. Recently Applied Biosystems introduced two new products to complement this offering; the high throughput Taqman Open Array Genotyping System and Taqman Copy Number Assays. NGP. What is genotyping, and what are its applications in disease prevention? Xavier Cristina. Genotyping refers to the process of determining an individual’s genotype. SNPs are currently the most commonly studied genetic variation, although microsatellites and STRs have been widely used in the past and new markers, such as CNV (copy number variants), are of increasing interest to researchers. The ultimate goal of this analysis is to ﬁnd links between a disease (or group of diseases) and its genetic background. Advances in the technologies available have allowed researchers to analyse thousands, or even millions, of SNPs to discover disease-associated genes, and validate results by replicating studies with larger cohorts of samples using technologies like Taqman SNP Genotyping Assays. NGP. Why is genotyping important in clinical research? XC. Clinical studies aim to discover panels of SNPs or other genetic markers that can be used in the prevention, prognosis or treatment decision of complex diseases. These biomarker panels often include polymorphisms of high clinical relevance, such as those located in DME (drug metabolising enzyme) genes. As they affect an individual’s drug responses, genes that code for the DMEs represent one of the most important classes of genetic variation in drug development studies. Analysis of SNPs in these genes is very important during the drug development phase, as this can indicate how a patient will metabolise the candidate drug. As a simple example, grouping patients into low, medium or high metabolisers can help researchers adjust dosage to improve drug efﬁciency. This strategy is called pharmacogenetics, and is important for the future of personalised medicine. Applied Biosystems’ DME Taqman SNP Genotyping Assays incorporate over 2600 high value polymorphisms located in regulatory elements and coding regions of 220 drug metabolism and transporter genes. Later this year, users will be able to customise the Taqman Array Platform (micro-
ﬂuidic card) for DME genotyping research, allowing simultaneous analysis of eight samples for up to 96 SNPs. NGP. What beneﬁts does Applied Biosystems’ new high throughput genotyping system provide to life scientists? How does it differ from similar systems? XC. The recently launched Taqman OpenArray Genotyping System combines Taqman SNP Genotyping Assays with the massively parallel OpenArray technology, allowing researchers to analyse more than 90,000 genotypes per day at low cost and with a simple laboratory set-up. The nanoliter sample volumes required for the Taqman technology permit a very simple workﬂow, with the excellent call rates critical to the success of this kind of research. Unlike other technologies, the Taqman OpenArray Genotyping System supports full analysis from DNA to results, with customers able to choose from more than 4.5 million pre-designed assays, or custom designed assays to suit any gene for any species. These assays are ready to run on OpenArray, with no hidden costs coming from oligo fees or third party consumables that may hamper the workﬂow. With this system, Applied Biosystems delivers marketleading performance, support, training and service to ensure customer satisfaction for high throughput genotyping applications. NGP. What do you believe will be the most important developments in genotyping over the next few years? XC. Next generation sequencing is an exciting new technology being used by laboratories conducting disease-association studies. Re-sequencing of a large number of individuals will bring more genetic markers (SNPs and CNVs), so there will be increasing demand for simple yet effective technologies for validation and commercialisation of biomarker panels. To complement the SNP assays portfolio, Applied Biosystems has recently launched the Taqman Copy Number Assays. This solution is comprised of more than 1.6 million predesigned assays, as well as a custom design pipeline, with speciﬁc analysis software to provide a platform for all researchers interested in CNV screening and validation of array CGH.
Xavier Cristina is the European Business Development Manager for the Molecular Biology Systems Division at Applied Biosystems, part of Life Technologies. After completing a PhD in Microbiology and Biochemistry, he joined Applied Biosystems in 2000 and has developed his career in various positions in the company.
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Automating life sciences SOPs Life sciences organisations often overlook active process compliance as part of process initiatives.
ompliance is typically considered to ensure inclusion of process steps in workflows and SOPs to address 21 CFR Part 11, GCP, GAMP or other regulatory requirements. The missing piece for sustainable compliance is the automation of business processes (SOPs essentially) in a controlled way – a way that ensures that the appropriate steps, rules and other compliance factors are clearly documented and enforced during process execution. In addition, life sciences companies must have a proactive, systematic way of controlling access, tracking actions and capturing an accurate, ‘on demand’audit trail of both human and system actions. Effective deployment of process modelling and business process management (BPM) software has helped a number of the world’s largest life sciences companies successfully accomplish this – on a relatively short timeline and for a reasonable cost. The first step is to model mission-critical processes, analyse them, and define standard global processes with regional differences where required by regulations. The secret to success at this stage is to make the models as robust and all encompassing as possible. Traditional, static, ‘wallpaper’ process models will not suffice.
to follow the prescribed flow and make decisions only as permitted by their defined role and authority in the organisation. All user actions and process data are captured in real time, giving management greater visibility into operations. Further, all of the process information captured in the BPM software exports into standard documentation formats to serve as validated evidence of process compliance.
Ethan Smith has extensive experience in business process consulting in life sciences. He has driven process initiatives across research and development, sales operations, incentive compensation, physician spend management and compliance. He has delivered well over a dozen BPMS implementations in the industry and developed enterprise BPM strategies and centres of excellence. Smith currently serves as the Director of Life Sciences Solutions for Metastorm.
Connecting The foundations for SOP automation will be laid within the models. To establish this foundation effectively, the models must connect together with a defined taxonomy to ensure complete process paths with no orphan processes or segments, and be easily consumable across the enterprise for sharing, annotating and collaborating. They must also natively include associated documents and content – standard operating procedures (SOPs), forms, work instructions, etc – and be accessible in role-specific views for user training and guidance. Building from these comprehensive models, BPM software can then be applied to transform the models into live operating processes. BPM is being used by top global pharmaceutical
organisations to implement processes in new and more effective ways. This is enabled by the ability to take process models and associated requirements elements directly from the modelling tool into the BPM automation engine, which significantly shortens process design and deployment timelines and ensures documentation consistency. Process execution elements are added within BPM – user forms, dashboards, integration services, role hierarchies and more – bringing the process to life. The direct linkage from the process models, SOPs and other documentation to process execution is how active process compliance is achieved. Executing processes on a BPM software platform implicitly means that users are required
For life sciences companies traditionally dependent on SOP documents, deviations and waivers, leveraging an integrated process analysis and BPM software suite provides process discipline and compliance that delivers real value in a number of ways. These include reduced SOP deviations through enforced process adherence; reduced or eliminated SOP waiver forms; and real-time process visibility and information capture to monitor process compliance. They also include readily available process documentation and having the ability to easily update processes and implement process changes when needed. The overall reduction of reliance on paper makes the process greener and portable across the globe and produces more efficient and effective business operations. The events in the global economy over the past year prove that a lackadaisical approach to process visibility and control can be disastrous. The solution exists today to help life sciences companies achieve and maintain active process compliance across the enterprise – and provide the foundation for a bright and prosperous future. Metastorm is an enterprise software company focused on delivering business improvements through effective business architecture, process analysis and process automation technology. Due to the many process challenges life sciences companies face – from safety to innovation to time-to-market – our software has proven to be a very valuable asset.
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Increase ROI with novel column chemistry By Richard Lake
mproving data quality and streamlining operations, while decreasing costs and drug development time, are ongoing goals for pharmaceutical labs. Significant investments have been made in UHPLC platforms and mass spectrometry technology to improve productivity. However, these assets cannot perform optimally if chromatographic separations are not adequate, as is often the case when attempting to separate drug compounds on C18 columns. Phenyl columns offer some aromatic selectivity, but little hydrophobic retention. Restek’s unique Biphenyl phase incorporates a novel end-to-end bonding that is a significant advance in phenyl columns, providing both high hydrophobic retention and aromatic selectivity in a single column. These attributes maximise versatility and can be used to increase utilisation and return on investment for UHPLC and LC/ MS systems.
Improve UHPLC performance with proper column choice UHPLC in the pharmaceutical laboratory is commonly used to accelerate development of methods, which are then scaled to a conventional HPLC-based platform for routine analysis. This common application of UHPLC makes the need for selective column phases just as great in UHPLC as in HPLC. While UHPLC does produce significant gains in efficiency and speed, the gain is not so extreme that the stationary phase is inconsequential; selectivity is still the driving force behind separations, as it affects resolution to the greatest mathematical degree. Higher quality separations, not just faster separations, are needed by pharmaceutical laboratories. To fully realise the potential of UHPLC, labs need to consider both speed and selectivity.
Biphenyl columns offer both C18-like and phenyl-like selectivity (easily controlled with mobile phase choice), and, when used in conjunction with UHPLC, they can provide much faster and more effective resolution for drug substances and impurities.
Maximise use of your LC/MS asset Novel Biphenyl column chemistry also can increase return on investment for mass spectrometers. Here, the benefit is not so much selectivity (the mass spectrometer can provide deconvolution) as it is increased retention. Since Biphenyl columns strongly retain analytes, highly organic mobile phases are used to elute the compounds into the mass spectrometer. This leads to higher sensitivities in electrospray ionisation as desolvation of the mobile phase becomes more efficient, ultimately giving better ionisation. Another advantage of using highly retentive stationary phases, like Biphenyl for mass spectrometry is eliminating unwanted adduct formation or charge competition from matrix interferences that are less retained by the column.
Richard Lake is the Pharmaceutical Market Development Manager at Restek Corporation. He is responsible for overseeing the development and application of chromatographic products for the pharmaceutical industry. He has over 13 years experience including positions as lead chemist, LC and GC method developer, stability manager, and study director for pharmaceutical studies.
Commonly used C18 columns are excellent for retaining hydrophobic solutes, but fail when retaining hydrophilic solutes. In contrast, Biphenyl columns are capable of retaining both hydrophilic and hydrophobic aromatics better than conventional C18 and phenyl phases, resulting in a wider range of applications and better mass spectrometer asset utilisation.
“Alternative and easily controlled selectivities give Biphenyl columns a unique versatility” Alternative and easily controlled selectivities give Biphenyl columns a unique versatility, leading to a higher return on investment and better utilisation of instrument resources. Since Biphenyl columns offer both aromatic selectivity and hydrophobic retention, orthoganol separations can be achieved with simple mobile phase changes. This ‘tunable’ selectivity gives markedly better separations for molecules differing in degree of unsaturation, double bond position, or electron withdrawing groups. Improved MS sensitivity is also possible, due to the use of more organic mobile phases. Biphenyl columns are available on a variety of silicas, including a fully scalable line accommodating UHPLC-HPLC method transfer. Versatile Biphenyl columns can improve utilisation of UHPLC and LC/MS resources and are an ideal tool for method development.n
Building relationships around the globe Wyeth’s Joan Shen examines the benefits of choosing international locations for clinical trials.
s Medical Director for neuroscience at Wyeth, Joan Shen is used to working with people from around the world. She is currently focused on conducting global trials for phase II and phase III, for indications including schizophrenia, bipolar and depression. “My day-to-day job is to work with clinical scientists to generate protocols and select the countries, and then conduct trials and analyse the data to get the results,” she explains. “We coordinate with the other project management functions and propose to upper management what we think the best strategy is to move forward with a certain compound.” Clinical trials are becoming ever more complex, with larger patient groups, and are often conducted internationally, meaning it can be challenging to conduct trials in a timely and cost-effective manner. Shen points out that the main things to keep in mind are speed and quality. “Wyeth has been back and forth in terms of what are the best methods, and in the last two years we have generated a group called country visibility. We call it the site management group, as distinct from the study team. “This group helps us to facilitate the selection of countries and the visibility of studies company-wide. Once we get approval to move forward with a study and get a budget in place, we have a study mobilisation meeting with all the functions, including the management group. That needs to be planned six to nine months ahead of time. “We generate a synopsis of the study and a questionnaire about the site country’s visibility, and the special site management group takes them and sends them all over the world, wherever Wyeth has attachments. They collect the feedback on what is required, such as the number of patients or disease areas or placebos needed. They then give feedback to us and based on that information we select which site we want to go to. That helps us get collective information and from that we can generate a database based on site
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performance in the past, and the regulatory environment changes.” Shen points out that the downside of this is that the quality of the site may not get as much consideration as it should. She believes a joint effort works best, between country visibility groups and the study team to look into the speciﬁc capacity of and the quality of the sites.
Joan Huaqiong Shen is Medical Director for neuroscience at Wyeth. She began her career as a surgeon, then obtained a PhD and training in psychiatry. Shen, who is board-certified in psychiatry and eligible in clinical pharmacology, worked for Eli Lilly before moving to Wyeth in 2005. She leads clinical trials to China, India, Japan, South Africa and Eastern Europe.
Shen leads trials in various sites around the globe, including China, India, Japan, South Africa and Eastern Europe. While big pharma companies have been criticised for choosing these locations based on cost, and have been accused of ‘taking advantage’ of unsophisticated local populations, Shen explains that there are legitimate reasons to site trials abroad. “We need a diversiﬁed patient population, which is very important for development if you are marketing all over the world; and secondly the trend toward placebo results and so-called failed trials is increasing in the US. That means we are getting ‘fake’ patients or treatment resistant patients, or patients who have been recycled from other studies. We can’t see the true treatment facts if we repeatedly use the same population, and the commercial treatment sites who try their best to get patients don’t necessarily provide the best quality. “We can lower the placebo rates because we know going to countries like China, India and South Africa you see many more patients who have not been exposed to clinical trials and to second generations of certain drugs; for example, psychotics. It then becomes much easier to see the true effect. “I remember one of the studies I was involved with in the US in which we had no effect on the treatment between the two populations, but we were able to identify the drug effects with Russian subjects. Overall, it was statistically signiﬁcant, but if you put aside the Russian patients you didn’t see it. We were able to discuss this with the FDA and they agreed with our data. The quality of the data speaks for itself.” Of course there are disadvantages to international clinical trials. One of these, as Shen points out, is that some countries require a much longer time for regulatory approval. “Some countries are quite fast, while others are very slow. For example, in China in my experience once you hit the ‘yes, go’, they are able to really move very, very quickly. In one of the trials I remember in China, they had already ﬁnished their enrollment but some other countries were so behind that we asked China, ‘Can you increase the number of patients to ﬁnish up all the studies?’ And they did.” While Shen prefers to go where there is a bigger potential patient population. “It’s also the market that we’re looking for. The regulatory
requirements for most of those regions ask for the particular patient population from their region. If early on you know you’re targeting those populations, it makes life easier when you submit to the FDA and to get market approval. That’s one of the incentives we are moving towards these global studies.”
Different regulations Regulations also vary between countries. Shen has found that India has an excellent regulatory environment. She anticipates a three to four month approval period there, because the board of health is relatively easy to work with. “As long as the ethics group committee agrees with your proposal, you have no problem. This is not always the case in other countries. “In Japan, the PMDA is really strict on what they do. Usually they ask for phase I data before you can move forward, and the other problem is slow enrollment, but I think the PMDA is now much more open-minded. They like open dialogue, so the study team has to put a lot of effort in to support this. We send our experts over there to talk to them so they have a whole picture of the safety data, and then they feel comfortable. “Right now we anticipate novel chemicals getting approval in eight or nine months, but again this is a regulatory bottleneck. There’s a huge potential for markets so we usually don’t give up; we’ll keep trying.” According to Shen, South Africa also has an excellent regulatory environment, with an approximate three to ﬁve month approval period. The downside is that it’s on the other side of the world, and to travel there is difﬁcult. “It depends on disease areas. Some of the diseases are much easier to conduct studies in; some are not; it depends on the availability of the treatment.
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WYETH FAST FACTS • Founded in 1926 under the name American Home Products Corporation • Headquartered in Madison, NJ • Operating in more than 100 countries • 47,500 employees worldwide
“Ethics committees in other countries sometimes also ask a lot of questions about placebo: why you want it and can you do it without it. Eastern European countries are stricter now about placebos as well. Originally countries like Poland were pretty open to clinical trials but now the psychiatric committee there has issues with some kind of consensus. “As long as there’s available treatment they do not suggest that we use placebo in the studies, so we had to withdraw our applications. We don’t know the trend but it looks like as a company we are moving towards more Asian and South American locations instead of Eastern European countries, although Russia is currently has a pretty good regulatory environment.”
Patient quality Patient recruitment methods also differ depending on the country in which the trial is being carried out. Shen says she is strongly opposed to the notion that patient recruitment should be conducted based on speed alone. “I want to recruit patients quickly, but I also want to emphasize the quality of the patient. We also face challenges with patient trust in some regions. “For example, in China and Taiwan the method of recruiting patients largely depends on the relationship with the site. In those countries patients need therapeutic alignment with the physicians, so if they trust the physician they come to the studies and stay with the treatment, but if they don’t it’s hard retain them or get them to come to clinical trials because it’s still a relatively new concept in those regions. “You have to have a very good relationship with the site. I cannot emphasise that enough because that’s one of the things our com-
pany is doing. I’ve currently initiated this in China, to try to build long-term relationships with the key opinion leaders there, as well as the PIs. To better understand their needs we help to train them. We help them to obtain the disease knowledge to get the best quality from the clinical trials. “Those regions are looking for collaboration. They don’t want to be treated just as a site: give us patients and we’re done. They want to be treated with mutual respect and also have long-term collaborations. They also like to have a co-author on the publication.” In Shen’s view, it’s about building a long-term relationship. “Many big pharma companies have been operating in countries like China for a long time, so they already have good reputations there. This can mean that when they have four or ﬁve trials they prioritise ours, which can be signiﬁcant factor in enrollment rates. As a big company, what you need to do is build up a relationship with local government. If you get their support, things are much easier. “We also have good relationships with India and many other countries, and this does make a huge difference. We as a study team go to visit the sites. We exchange scientiﬁc information and then make ourselves available if they have problems or questions. Once you start the trial, you can’t just throw that out and leave them on their own.
“We need a diversified patient population, which is very important for development if you are marketing all over the world” “In those regions they are still learning to ensure study quality. For this reason, I would strongly suggest providing a refresher or other visits to rejuvenate the study’s energy and to refresh the memory of what’s needed, otherwise quality could deteriorate throughout the study, especially if it’s long. That’s how I feel about the energies we need to put in to help get recruitment as we need it.” Another important aspect of building relationships with international sites is education. As Shen explains, training at sites is very important, as well as training the company site managers. It’s not a matter of setting up the trial and leaving them to get on with it. “You can’t just give it to the region and wait for results. That never works very well. “We need to educate people, to help them understand that if they want to have those medications available for the local population, they need to make sure patients understand that joining studies helps them and will help others in the future to get medicines early on. That’s also the selling point for the government when they say, ‘You’re trying to test our population.’ Then we’ll say, ‘This is the only way we can get this on the market early so everybody can have this available.’ Those are the things we want to see not just for clinical trials, but also for long-term patient beneﬁt.”
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The challenges of biomarkers Why the implementation of biomarkers for patient stratification to improve oncology-targeted therapies is still an extremely challenging endeavour with limited success. By Peter Duncan
lthough we are now beginning to benefit from the genetic, genomic and proteomic discoveries over the last decade, the implementation of biomarkers for patient stratification to improve diagnostics, prognostics and companion assays for oncology targeted therapies is still an extremely challenging endeavour with limited success. This is due to many factors, including the lack of implementation of true systems-based approaches in clinical development to achieve multiplexed, multi-parametric, phenotypic profiling of protein biomarkers and corresponding tissue microanatomy.
Predictions Accurate prediction of biological events, whether it be disease prognosis, toxicity or therapeutic response, will become increasingly similar to how we predict other multivariate phenomenon; for example, the weather. A hundred years ago farmers had to rely largely on qualitative, nonintegrated methods such as a weathervane, cloud patterns, and an almanac for identifying weather trends. Today, when one wishes to see the weather forecast, a visit online to any one of a myriad of weather-related websites provides a variety of images and quantitative information at our fingertips. Multivariate modeling integrates several factors (images, temperature, barometric pressure, wind speed, historical data, etc.) yielding accurate weather forecast information, which we are then able to make decisions with. There is no doubt that our efforts in ‘forecasting’ biological events could benefit from a similar
approach. However, at the present time, we are often looking for ‘silver bullets’ that will facilitate medical decisions, drug prioritisation or clinical trial enrichment. In the press, we often read about a single gene or protein that is responsible for cancer. This kind of over simplification of the problem further inhibits our abilities to make strides in diagnosis, prognosis and drug development.
Problems Compounding the problem is the fact that the current sequential clinical development paradigm does not facilitate the development of multivariate assays that can aid in a better understanding of how multiple signal transduction pathways can
“The implementation of biomarkers for patient stratification to improve diagnostics, prognostics and companion assays for oncology targeted therapies is still an extremely challenging endeavour with limited success” affect the progression or therapeutic response of an individual’s unique cancer. This is because in order to develop these kinds of assays for a specific patient set, pathologists need access to patient tissue samples from the specific clinical trials in which they are conducting. Phase III clinical trials are where there are usually adequate patient numbers for multivariate assay development. However, by the time clinical trials are in phase III, it is too late to develop
Peter Duncan joined Definiens AG in December of 2008 as Global Director, Marketing and Business Development, Life Sciences. In this capacity, Duncan manages external collaborations with leading cancer centres, industry partners and biopharmaceutical companies. Prior to Definiens, he served as Vice President, Business Development at Aureon Laboratories and was responsible for several collaborations around applying morphometric imaging techniques to multiplexed immunofluorescence assays applied to formalin-fixed, paraffin embedded tumor tissue. Peter has over 15 years of executive sales, marketing and business development experience spanning the analytical chemistry, biotechnology and diagnostic industries. He holds a BS degree in Biochemistry from the University of Vermont.
a training model, validate the model, and then run an additional prospective study to demonstrate feasibility under FDA guidance. As such, bio-pharmaceutical companies are forced into a dynamic that often only considers the target in question (i.e., Her2/neu, EGFR, etc.) or related molecules within the pathway that the therapeutic agent seeks to perturbate. The result is that even though we have examples of personalised medicine such as Herceptin, response rates are still lower than desired even among patients who have been classified as potential responders via a companion assay (i.e., immunohistochemistry). Although a particular patient may have an overactive angiogenesis-related biomarker which shows up in the immunohistochemical test, there is currently little opportunity in the clinical development process to stratify patients by utilising the simultaneous measurement of biomarkers that belong to multiple pathways. These other pathways may be compensating when the original drug target is inhibited, leading to the low response rates we are faced with today.
Solutions A few solutions might be for the FDA to facilitate a clinical development process that is more interactive than sequential, which could facilitate true systems-based, multivariate approaches. Additionally, further guidance for in vitro diagnostic multivariate index assays (IVDMIAs) is needed. Bio-Pharmaceutical drug developers, cancer research centers, technology providers and clinical service labs should work together more closely, synergising efforts where possible. As described in the article in ‘Imaging is Key to Success in Translational Research and Drug Development,’ image intelligence solutions that can be implemented across the entire biomedical continuum will also be needed. Further, we should accept that complex biological problems will require systemsbased approaches to understand them as opposed to approaches based on an oversimplification of the underlying biology. n
informed decisions NGP talks to a panel of experts about using informatics solutions to manage data in the drug discovery process.
NGP. What technologies can companies use to help reduce the cost of drug discovery? Simon Wood. It is clear that many different informatics solutions are used to manage the huge amounts of data generated in the drug discovery process. This data and information are key to making informed management decisions for individual discovery projects, especially as far as go/no go or fail early decisions are concerned, and these are key to efficient use of resources, including people and money. However, this information is often fragmented and isolated throughout the discovery organisation. Laboratory informatics solutions, such as scientific data management systems (SDMS), can unify this data into a single source, and make it available to the people and systems that need it. This supports efficient decision-making, therefore helping control costs.
Ed Addison. At TeraDisc, we are reducing the cost of drug discovery using a QM/MM algorithms with intelligent search over molecular space using a 2200 CPU high performance computing cluster. The software is patent pending and university generated and has shown promising results in terms of achieving very accurate binding predictions for both small molecules and peptides. We are able to discover lead compounds by searching theoretical space rather than an existing molecular library. The results are a highly focused library of good binding leads generated ‘in silico’ in just a few months using a tool known as ‘Inverse Design’. We do this for clients as a service. Life sciences computing, modelling and in silico design have been used only in a limited way up to now. However, the in the past four years, the speed, memory improvement and throughput of high performance comput-
ing has been nothing short of breathtaking. TeraDisc is deploying over 10,000 CPUs in a high speed network over the next 18 months in anticipation of greater demand for processing high throughput biological data, and to be able to conduct ultra high performance in silico binding affinity assessments using quantum mechanics for hundreds of millions of leads per target project. Today, we are working with the forward thinking organisations who want an early adopter advantage in this area. NGP. With looming patent expiries, pharmaceutical companies need to be more efficient in R&D to stay ahead of the competition. What tools can they use to help achieve streamline their drug discovery process? EA. The pharmaceutical companies that are able to use high performance computing as a preliminary step in discovery – for virtual screening, target validation, toxicity assessment, or mechanism of action studies – will be better positioned to save time and money in the discovery process. Examples of tools running on high performance computers that help with drug discovery costs are biomarker extraction algorithms, target simulation, virtual screening and toxicity evaluations.
“The software has shown promising results in terms of achieving very accurate binding predictions” Ed Addison SW. From an informatics point of view, the tools that help companies cut the cost of drug discovery are the same as the tools that will help streamline the drug discovery process by facilitating the decision making process. So again it comes down to those systems that will provide unified access to the required data no matter where it comes from or what systems generate it. An SDMS, for example, should be capable of taking project data from multiple sources, extracting key data, storing it in a format-neutral way (which also preserves long-term value of the data) and making it available for searching and reporting.
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NGP. Drug firms are facing increasing demands for compliance from regulatory bodies. What tools can they use to help them meet these requirements? SW. Perhaps the most important tools that will help drug firms meet their regulatory requirements are the ones that will help them implement and manage the traceability requirements of those regulations. Some estimates put the amount of time spent on regulatory and compliance activities within the lab to be as high as 70 percent. Clearly, any informatics systems implemented in the lab must support the regulatory needs to try and reduce this burden. Perhaps the most obvious example of this is the support of electronic signatures in line with FDA 21CFR Part 11 regulations. However, systems such as LIMS will also support other regulatory requirements – including managing instrument maintenance and analyst training and certification, inventory management and chain of custody records. They will also provide an automatic audit trail of actions taken and changes made. Using informatics solutions to manage regulatory needs not only eliminates possible missing records, where lab staff forget to record the required information, but also makes the retrieval of regulatory data easier.
Ed Addison is an established serial entrepreneur and CEO of TeraDisc, a company that provides high performance computing applications for drug discovery. Named “Entrepreneur of the Year” after achieving #51 on the National Fast 500 in 1994, he is also an Adjunct Professor of Bioinformatics at Johns Hopkins University.
EA. One tool that we are developing is a high performance PK/PD algorithm that runs on high performance computers and that is capable of analysing clinical trials outcomes on very large trials with many parameters, even high content data. Our tool is based on a Bayesian approach. This will enable drug developers to provide statistical proof of fine grain outcomes useful for personalised medicine, biomarker identification, and/or risk assessment.
“Some estimates put the amount of time spent on regulatory and compliance activities within the lab to be as high as 70 percent” Simon Wood NGP. How do you see the future of drug discovery developing in the next few years? EA. We believe the market must prepare for a transition to a greater use of life science computing to be more efficient, and from a business point of view the market must address the transition to personalised medicine. This means that more drugs with smaller market sizes must be developed quicker. Despite the uncertainties surrounding precise cost and time estimates in the field of personalised medicine, various impacts on the drug development process, pipeline and industry value chain have been identified as more powerful and safer drugs, due to genetic specificity and ability to choose dosing based on biomarkers. This also requires the provision of genetic and other diagnostics to test biomarkers, which has led to an expected improvement in drug discovery and development through increasing knowledge of genomics and bioinformatics. Another impact has been the increased need for IT in the drug development, discovery, approval and clinical administration process, along with a decrease in pharmaceutical pricing and healthcare costs, due to lower development costs The onslaught of personalised medicine in the marketplace represents a classic discontinuity. It is currently in the ‘incubation’ period. However, when personalised medicine
Simon Wood is Executive Director, Marketing and Education at STARLIMS Corporation. A leading authority in laboratory informatics, he is a popular lecturer on system implementation and laboratory IT. His prior experience includes establishing, for Thermo LabSystems, the industry’s largest LIMS implementation team. He holds a PhD from Sheffield University. reaches the rapid growth period, there will be a paradigm shifting affect in the industry that accounts for all the factors above. While the specific timing and magnitudes of the metrics involved are not known yet, the gradual industry shake up expected to occur will have a significant impact on the business models, pipelines and growth rates of major pharmaceutical companies. Embracing life sciences computing models will greatly improve the efficiency of this transition. SW. The pressure on drug companies to streamline their pipeline and bring candidate compounds to market quicker will only continue; and the pressure will be on drug discovery organisations to identify high potential compounds to deliver to the rest of the value chain. Continued consolidation within the industry in terms of mergers and acquisitions and the continued development of collaborative projects will all affect drug discovery organisations. The reliance on IT solutions will increase, but organisations will be looking for unified systems and solutions that allow them to concentrate on realizing the true value of the data and information that exists within the whole organisation, as opposed to just managing the data produced. The ability to deliver the data and information produced throughout the organisation to the people and systems that require it will be of paramount importance. n
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The future of drug repositioning Andreas Persidis talks to NGP about the transformational potential of drug repositioning.
NGP. Drug repositioning seems to be attracting increasing interest in the pharmaceutical world. Is there a real need for it? Andreas Persidis. Drug repositioning has been attracting the interest of pharmaceutical and biotech companies for two reasons: commercial and scientific. On the commercial side, the simple truth is that company pipelines are not growing at the desired pace. At the same time, the return per dollar or euro spent in the lab has been steadily decreasing. Pharmaceuticals have been trying a number of tactics such as ‘light reformulations’ that extend patent protection and company buyouts that instantly grow their pipelines with new compounds. These tactics, however, are proving less viable as regulatory bodies tighten their criteria and we begin to run out of companies to buy. On the scientific side, the promise of certain technologies is not unfolding as hoped for. At the same time, we are all beginning to realise some of the limitations of our existing knowledge, not only at the disease, but also at the biology and drug mechanism levels. In this context, it makes sense to ‘milk the knowledge cow’by recombining our existing knowledge in as many new ways as possible, with the specific aim of identifying workable drug-therapeutic area correlations that have so far escaped our attention and screening systems. So, yes, in my opinion there is a real need for drug repositioning. NGP. Is drug repositioning here to stay? AP. I think drug repositioning is here to stay and eventually could even lead to the transformation of drug development as we currently know it. Drug repositioning represents a shift in the way we look at biology and develop drugs, by actively exploiting the interconnectivity of biological sub-systems and processes as well as the multi-faceted nature of disease mechanisms. The tools and methods that are currently developed with repositioning in mind, could however be applied to de novo compound discoveries, as well as to improving our understanding of biology itself. Then, there is a very
Andreas Persidis is the co-founder and CEO of Biovista Inc. He has conducted research work in the field of applied artificial intelligence, culminating in the development of Biovista’s technology platform. Persidis is a project reviewer and evaluator for the European Commission and the Austrian government and serves on a number of expert panels on knowledge discovery technologies.
sound financial argument that works in favour of repositioning. In certain circumstances repositioning can deliver results for 20 percent of the typical cost of bringing a new compound to phase II using traditional approaches. Finally, there are efficiency reasons that make active repositioning a sensible strategy to follow. I think it is clear that every VP of clinical or business development wants to know all viable uses of the compounds at their disposal so as to maximise the exploitation potential of their company’s portfolio. This is not presently the case, and drug repositioning is one good way to address the issue. NGP. In a drug repositioning context, what is the role of academia and of traditional drug development processes? AP. By definition, drug repositioning works on existing knowledge – it reshuffles what we know about diseases and compounds in new and interesting ways that hopefully lead to new or better therapies. But many may hold that much that can be repositioned already has been. Here however, we need to remember that each new bit of knowledge interacts with many prior bits of knowledge, potentially creating opportunity for new discoveries. If we look at each new discovery as a singular chunk of knowledge, then every single new chunk that is added to our existing collection of chunks (our entire body of biological and drug
knowledge) creates thousands, if not millions, of new combinations to be explored. It is also clear that the clinical trials phases are here to stay for quite some time. Drug repositioning holds some significant promise to shorten and make less costly the development of drugs; it is clear, however, that traditional scientific discovery as currently practiced in academia will continue to play a significant role. NGP. Is there a best way in which drug repositioning can be practiced? AP. Drug repositioning is not a new idea. It has been happening since the early 1990s, mostly as a serendipitous process. In recent years, however, and as its value becomes more evident, a number of companies have developed tools to make the process more systematic. Most use mathematical or other models that by necessity make certain assumptions and may omit seemingly unrelated but probably relevant knowledge. They also tend to focus on the benefit side of the equation, i.e., finding the new application for the compound or drug. Some companies, such as Biovista, go a step further by simultaneously addressing the risk side of the equation, namely the adverse effects profile, making for much more balanced predictions of the clinical outcome of the repositioned drug. For further information please contact firstname.lastname@example.org.
INDUSTRY INSIGHT While partnerships play an increasingly critical role in the drug development lifecycle, a poorly structured partnership can expose your intellectual property to considerable risk. By understanding six common sources of risk, you can take steps to protect your investment.
Six risks to intellectual property By Jeff Spitzner Documentation If collaborators have inconsistent documentation practices, you must assume that Intellectual property (IP) defense will be judged on the lower of the two standards. Your investment can be put at risk if a partner does not share your compliance with appropriate local and international regulations including: signing and witnessing lab records, fully documented evidence trails, and recent US procedural requirements to keep electronic lab records in their original electronic form. If a partner were to lose data or witnessed signatures, you run the risk either of failing to adequately support your claims or that the partner might subsequently falsify this information to redress the losses.
Advanced disclosure Disclosure of data before patents are filed is always a concern, but this risk is exponentially greater in a collaborative environment. Policies relating to the presentation or publishing of data can vary greatly between organisations, particularly in academic environments that place greater weight on public disclosure. Technology has also increased the number of communication channels, including conferences, papers, grants submissions, webcasts, email, chat, podcasts and wikis. Each new communication medium makes it that much more difficult to monitor a partner’s activities.
loses a scientist affiliated with your project, you can lose access to months – even years – of knowledge. If the only other record of the scientist’s work is a paper notebook, the odds of recovering that knowledge fall dramatically.
Patent filing and defense Once the research is completed, your partner must assist in identifying and protecting your research. This includes: findings that match the raw data, human readable and printable records in acceptable forms (such as XML and PDF), preservation of time/date stamps and signatures by inventors and witnesses, preservation of the audit trail for the records, and authenticating that the records are original and have not been tampered with.
Even after a patent has been protected, your partner’s procedures could still undermine the profitability of your investment. Regulatory agencies require many records be retained long-term, in some cases beyond even the end of the patent. This includes disaster recovery, data backup, role-based access controls, audit trails, computer system security and other measures that will help safeguard your R&D investments. Indeed, you must even look beyond the partner’s Jeff Spitzner has more than 20 procedures and consider their longevity as years’ experience in management of well. If the company may not survive to meet scientific software and biotechnology Adverse data regulatory requirements, you must address companies and has been recognised Failure to identify and address adverse the preservation of critical IP. as a leader in electronic lab notebooks data findings is another source of risk for rePartnerships can deliver tremendous (ELNs), bioinformatics, and knowledge search organisations. During legal proceedbenefits through innovative technologies, management. He is currently President and ings for patents or efficacy, these ‘skeletons’ lower costs, greater speed and agility, and a Chief Science Officer of Rescentris. can put your investment at risk. Recognise range of talent and expertise not practical to the implications of the procedural and techmaintain within a single organisation. Hownical measures that your partner uses to ever, the value generated in a partnership is identify potential issues with drug safety, efficacy or stability; as realised not through the contents at the bottom of a test tube, but well as notes or collected evidence that fails to support your scienrather through the creation, capture and exploitation of the resulting tific hypotheses. knowledge, records and intellectual property. With great opportunity comes great risk, increasing the necessity of protecting your investOrganisational risks ment by enforcing adequate procedural and technical controls both When considering the risks of collaboration, it’s natural to focus within your organisation and within your partner’s. Be certain you on paper and electronic records. Unfortunately, even the company’s can trust – and verify – the results of collaboration; your success is personnel policies can create risk for your investment. If a partner at stake. n
The genetic advantage Allen Roses tells NGP how pharmacogenetics can help cut the size and cost of clinical trials. NGP. Why is it hard to predict a patient’s response during the development is used in a trial that contains a certain percentage of people that have the clinof a new drug? ical endpoints. The initial candidate gene lists that we would use – which acAllen Roses. One never knows how one is going to respond to an external tually are polymorphisms, or variances within or around the candidate genes chemical given to the body. What is made harder is if you don’t study it – those would be the first things we would study. And about 80 percent of the when it occurs, and most people have not done so because it was prohibtime, we achieve reasonable data. itive and there was no way of really doing so in the past, but now you can apply pharmacogeNGP. Why is pharmacogenetics expanding in the netic technology during the development periindustry? od. As a result of this, when an adverse event AR. There are a couple of reasons. The industry is occurs, there are now ways of finding the gecontracting because it has been operating on the netic markers that are associated with those overall ‘one size fits all’ concept. We’re going to deaths and 2.2 million serious people who will respond or those people who make a drug, everybody’s going to take it at the events are caused by adverse drug may get an adverse effect. dose at which we put it out there. With all the reactions in the US each year failures of proof of concept – the inability to NGP. What effects will multi-gene studies have on show efficacy with many, many molecules – and the discovery and the drug development? with the safety problems that are associated AR. When we’re working on a drug that’s in a particular therapeutic area, with many molecules, drugs have come under both public and newswe can use candidate gene lists that have to do with either the disease and paper/journalistic attack for being unsafe and for not working. But the what we think we know about the disease, or the mechanism of the molecule real driving reason for all this is always the finances, and it isn’t as imthat we are providing, which we would know about. These could be helpful in portant that you get your drug registered, although that certainly is imterms of focus on efficacy effects that we would see in using the drug.The drug portant, what’s critically important is to get it reimbursed.
Pharmacogenetics can identify the people in advance who will respond to the drug once it’s on the market because of studies that were done during development – companion diagnostics. The insurer or the national health service, or whoever’s making these decisions, can estimate what the cost of the drug will be if given to those people with predicted responses, and not given to those people who don’t have a predicted response. There is a very different approach in Europe than in the US. In the US, the government or a government agency doesn’t make the decisions; they’re made by panoply of large healthcare providers. Pharmacogenetics can provide value to the drug at a reasonable cost by identifying people who will respond that the drug can be reimbursed, protecting the drug against adverse events by developing prognostic or diagnostic markers and identifying people who might have adverse events.
In the case of Shiraz Pharmaceuticals, it’s part of Dean Drug Discovery: it has a relationship with the Dean Drug Discovery research institute that we have, which is called the Dean Drug Discovery Institute. Any milestone in royalties that are collected by Shiraz, 80 percent will be paid to Duke University. So it becomes a source of income for Duke, and it also becomes an automatic thought process about, if we have some IP that’s developed inside the university, maybe we should go to Shiraz to see about commercialisation. We get commercialisable IP from private individuals, from Duke and other universities, and as time goes on from the companies with whom we have contracts for the development of companion diagnostics. That then allows people within the university to understand how the market for drugs Allen Roses is Jefferson Pilot Professor of Neurobiology at actually works, and it also shows them Duke University and CEO of Cabernet Pharmaceuticals, ways that we can share in technology, Inc. He also serves in several capacities at Duke not as a one-off but with defined exUniversity: as Jefferson-Pilot Professor of Neurobiology NGP. What is the importance of an effipertise. That defined expertise is and Genetics, as Professor of Medicine (Neurology) as cient collaboration between industry being developed transferred in educaDirector of the Deane Drug Discovery Institute, and as and academia in regards to collection of tional programs, both to the Fuqua Senior Scholar at the Fuqua School of Business. He pharmacogenetic data? School of Business and to the Duke recently returned to Duke after a decade-long career as a AR. There are two ways of looking at this: Medical School. Senior Vice President at GlaxoSmithKline . a pharmacogenetic study, in a single The third company that’s been study, can be done in a general universistarted is a company called Zinfandel ty. Usually this isn’t done until after the Pharmaceuticals, so they’re all red drug is on the market, before they can have access to it, and is usually lookwines. Zinfandel Pharmaceuticals is preparing to do a prevention clinical ing at adverse events, which are all a negative influence as far as drug comtrial study with Alzheimer’s disease. It’s taking IP that was developed for dipanies are concerned. agnostic purposes to predict who will develop Alzheimer’s disease at what We’ve established a series of external companies, small, which are particular age, so we can take an epidemiological population between ages called the Blue Wine Group, after the Duke Blue Devils mascot. The Duke 62 and 87 and predict a high-risk group versus a low-risk group. Wine Group has three companies: one of them is Cabernet, and Cabernet Then we would design and register our study with the regulators Pharmaceuticals has a strictly laser focus on pharmacogenetic consulusing pharmacogenetics to identify the high risks during the course of tation and project management for large pharma. This is how I spend 20 the study of the people who would go from normal to the development percent of my consultation time at Duke. We’re not getting anything out of Alzheimer’s disease. Instead of needing hundreds of thousands of of it except keeping these studies going and allowing them to achieve a people to do that kind of study, you can do it with much lower numbers, better chance of getting proof of concept, and a better chance of keepif it works. ing their drugs on the market and providing new drugs, all of which they We will partner with major pharmaceutical companies who have a moltotally own. ecule that we are interested in. We’re designing the preliminary studies with However, because we’re creating companion diagnostics for them and several epidemiological populations across the world to see how fast we their drugs, we also have the opportunity to commercialise those comcould recruit people who are virtually or seemingly normal between the panion diagnostics. Therefore, a second company, called Shiraz ages of 62 and 87. At the time the study would be ready to start, probably Pharmaceuticals, is in charge of making the arrangements and taking care in late 2010 or early 2011, we would already have names of people who of all the things the drug company doesn’t want to, or doesn’t have the exhave said they would be interested in participating and get a very, very fast pertise in-house to do, to commercialise those companion diagnostics. start to the study.
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Extending molecular methods ROBERTUS VAN MILTENBURG
he three genomic technologies (sequencing, microarray analysis and real-time PCR) have contributed significantly to the understanding of biological mechanisms underlying disease processes and are well-established research tools in the drug discovery and development process. In particular, the identiﬁcation of disease-speciﬁc genetic signatures, the investigation of mutations in disease-associated genes, and the quantiﬁcation of expression of these genes can provide new insights into the pathogenic mechanisms of a disease, and may ultimately lead to new therapeutic approaches. In addition, gene expression monitoring could potentially be used for improving the drug development process, such as in predictive toxicology or in better prediction of dose-response effects. The identiﬁcation of sub-segments of patient populations on the basis of meaningful biomarkers to allow for selection of the group of patients most likely to respond, to improve the dosage of a drug or to monitor disease progression, is also increasingly based on the use of molecular methods.
Throughput Hypothesis free analysis of the expression levels of all genes involved in the biology of a disease would provide great insight into the alterations leading to a particular disease state. Although this approach is increasingly employed, driven by the availability of next generation sequencing approaches, the use of microarray analysis has a longer history and track record in the measurement of gene expression levels, SNP proﬁling or copy number variation measurement. Microarray
proﬁling is powerful in providing data points at reasonable costs. The results, however, need to be validated by real-time PCR to allow for greater sensitivity, increased dynamic range and conﬁrmation of speciﬁcity. Among the challenges in real-time PCR is coping with the complexity of the study. Many experimental set-ups will require high sample numbers to be measured for one or a few target genes, whereas measurement of gene signatures will require the analysis of a higher number of target genes per sample. Currently, real-time PCR is well established in 96- and 384-well format. Especially for the analysis of gene expression patterns, the required sample amount for multi-well analysis on 384-well plates can be insufﬁcient, depending on the sample type being used. Whereas pre-ampliﬁcation of the RNA can increase the number of analysis that can be performed on a single sample, many researchers prefer to decrease the sample volume required. Innovative technologies have been developed that allow real-time PCR measurement in volumes well below the µl range. Whereas these technologies can be applied without pre-ampliﬁcation when the target gene concentration in the sample is high enough, they will suffer from lacking sensitivity for lower expressed genes. To balance throughput requirements with sensitivity, the availability of a 1536well real-time PCR system has several advantages. Real-time PCR can be performed in 0,5 – 2 µl for sufﬁcient sensitivity, plates can be
Robertus van Miltenburg, MBA is the Director of Marketing for qPCR and Nucleic Acid Preparation Systems for Roche Applied Science. Roche Applied Science is a business area within the Roche Diagnostics Division of HoffmannLa Roche. Roche Applied Science develops and markets analytical tools and systems for the life science industry.
loaded with a selection of existing automated pipetting technologies and the plate can be ﬂexibly conﬁgured with regard to number of samples/ targets, ﬁtting the needs of the individual experiment. Another challenge in real-time PCR is the development of assays with good performance. Especially when measuring the expression levels from multiple genes the design of assays is extremely laborious. Important criteria are PCR efﬁciency 2.0 +/- 0.2, linear dynamic range of at least three logs and similar signal heights of ampliﬁcation curves. Also important are R2 value of standard curve between 0.99 and 1.00, high speciﬁcity and no side products, Cp <= 34 of highest cDNA concentration and good shape of ampliﬁcation curve.
“Innovative technologies have been developed that allow real-time PCR measurement in volumes well below the µl range” Highest convenience for users is offered when assays are offered pre-formatted on PCR-plates, provided that the validation criteria listed above can be met. Logical panels, based upon well described biological pathways allow the measurement of expression of many relevant genes simultaneously, thereby greatly reducing the effort in assay development. Ultimately, the combination of high throughput (384- / 1536- well) platforms with formatting of validated PCR assays of the researchers choice on PCR plates will make it easier to employ molecular methods in pharmaceutical research.
Biomarker use in drug development NGP. What biomarkers are being used to allow for drug development? Philippe Goix. Biomarkers, are widely used in virtually all therapeutic areas including; Cardiovascular (e.g. Cardiac Troponin I), CNS diseases (e.g. Amyloid βeta 40, 42), Oncology (e.g. VEGF, Akt-1, PSA), Metabolic Diseases (e.g. Insulin, GLP-1), and Inﬂammatory Diseases (cytokines and chemokines). Biomarkers serve a variety of different purposes in support of pharmaceutical development; a wide range of biomarkers are being used in drug development covering nearly all classiﬁcations of analytes, including proteins and metabolites, genetic markers, DNA, RNA and many others across a wide range of platforms. For example, Singulex immunoassays focus upon proteins such as cytokines, chemokines, growth factors, transcription factors, and hormones, regulatory proteins such as troponin and metabolites such as cAMP. NGP. Why are biomarkers important for personalised healthcare? PG. Biomarkers are used in personalised healthcare as a diagnostic tool to identify populations for stratiﬁcation and abnormalities in individuals, to be better able to tell who can beneﬁt from therapies and to track individual disease progression. They are also used to modify or switch therapies when one mode is not successful, and also to maximise the utilisation of drugs e.g. to better enable drugs and delivery modes to be cost effective. NGP. How can they be used to measure disease progression? PG. Many biomarkers can be used as progression monitors from normalcy. The primary logic is that there are baseline levels
of biomarkers that can be measured in individual patients. By following the patient over time, medical professionals would be able to monitor the progression from any given state, either healthy to sick or preferably sick to healthy. It is hoped that the detection of the disease arrives in time for a therapeutic intervention. Many biomarkers that are clinically relevant, however, are difﬁcult to monitor with given technologies currently available (such as lacking the necessary sensitivity to measure the changes). By increasing assay sensitivity, it is possible to observe the minute levels of the analyte of interest. Thus, allowing for observation of small incremental changes (approximately 50-250 fg/mL) from a given state providing the researcher or clinician with vital data about the efﬁcacy of a given drug or treatment regimen. For example, Singulex has pioneered development of a very sensitive troponin I assay. With this assay it is possible to observe very small changes in troponin. In placing patients on a treadmill it is possible to observe a difference between resting states and exercise states and determine those at highest risk. Our work with rats veriﬁed that many of the same principals apply to animals and troponin. NGP. How can efﬁcacy and safety be successfully balanced during drug discovery? PG. By increasing sensitivity, the therapeutic index can be optimised on both ends (safety and efﬁcacy) to obtain the optimal amount (least amount) of drug to have the greatest effect. To accomplish this task requires a reproducible and sensitive surrogate biomarker. Knowing the stability of the analyte in
your population helps to provide a framework or a relevant base from which to measure. With this baseline of the biomarker/analyte one can observe signiﬁcant changes beyond baseline variation. Surrogate biomarkers can track disease severity and the effect of the drug to modify or minimise the disease. Additionally, there are speciﬁc markers that are indicative of toxic effects and can be monitored in relation to the efﬁcacy of dosage.
Philippe J. Goix is the President and CEO of Singulex, Inc. Dr. Goix took the position in 2004 to spearhead Singulex’s commercial efforts in the life science and diagnostic markets. Previously, he founded Guava Technologies and was a senior scientist at Sandia National Laboratories, Stanford University, and CNRS France.
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Ushering in the era of personalised healthcare
he rising costs of bringing a drug to market and the cost pressure under which healthcare systems operate has created an environment in which the development of successful drugs has become increasingly challenging. In order to grow profitability, pharma must focus on both reducing the costs of drug development and on increasing the medical value for segmented patient populations. Flexible solutions are required to address the needs of the drug discovery process and support downstream clinical trials. Next generation sequencing, coupled with genomic enrichment technologies, offer new technical solutions for more efficient pharmaceutical and diagnostic development.
The genomics revolution Genetics play a large role in human health and DNA sequencing has proven to be an important tool in understanding the genetic basis of disease. However, the cost and resources needed for capillary (Sanger) sequencing has limited the scope of genomic analysis of disease. The next generation sequencing era, marked by the commercialisation of the Genome Sequencer System from 454 Life Sciences in 2005, triggered a fundamental change in the way researchers approach personal genetic variation. Rather than analysing a single sample at a coarse level, the speed and throughput of next generation sequencing systems enables scientists to study hundreds of samples at significant depth and quality. With the introduction of genomic enrichment technologies, such as Roche NimbleGenâ€™s Sequence Capture Array products, the time and cost of sequencing has decreased further, as it is now possible to capture and sequence only the human genomic regions of interest. These arrays target specific candidate gene or exon sets, the whole human exome, and contiguous disease-associated regions. The combination of 454 Sequencing and NimbleGen Sequence Capture arrays has created a paradigm shift for the analysis of
Sequence Capture Arrays to uncover new insights into the genetic basis of a wide range of diseases, including the following:
Gerd Maass has worked for Roche since 1997 in several global programs in the field of cancer drug research and development. From 2001-2006, he was responsible for the management of the pharmacodiagnostic programs in cancer. Between 2007 and July 2008, Maass headed the research and development activities of Roche Applied Science. Effective August 1st, 2008, he was appointed as President and CEO of Roche NimbleGen, located in Madison, Wisconsin.
variants within genomic loci and megabasesized disease regions that play critical roles in human health. The challenge now is to rapidly and accurately apply these technologies to understand how disease-associated genetic variation can ultimately lead to powerful discoveries of new drug targets.
Accelerating discoveries These technologies enable innovative approaches to develop novel therapies and diagnostics, and are considered one tangible pathway toward personalised healthcare. Recent studies have used 454 Sequencing alone or in combination with NimbleGen
Oncology: In a pivotal paper published in Nature Methods in 2006, Thomas et al demonstrated that 454 Sequencing could be used to elucidate cancer tumour microheterogeneity. The study identified two minority EGFR populations at a frequency of two percent and three percent of the total EGFR, both of which were associated with clinical resistance to EGFR inhibitor drugs. In another study, the combination of 454 Sequencing and NimbleGen Sequence Capture Arrays was used to analyse specific exons in a lymphoma cancer cell line (Albert et al Nature Methods, 2007). The study demonstrated the effective capture of exons with high coverage of the targets. Viruses and infectious diseases: The throughput of 454 Sequencing has allowed researchers to deeply analyse viral populations and identify viral subtypes. Recently Simen et al. ( Journal of Infectious Disease, 2009) used ultra-deep 454 Sequencing to identify low-frequency drug-resistant HIV variants in patient samples. The study found that mutations present at the one percent level are likely to lead to premature failure of treatment. Identifying these rare viral mutations may ultimately enable prescription of a more effective drug regimen and sophisticated surveillance, based on an infectious agentâ€™s genetic characteristics. Autoimmune diseases: In another recent study, Nejentsev et al (Science, 2009) outline a path from genetic association to the identification of protective and causative alleles for type 1 diabetes, marking a key step for the development of clinical applications based on previously identified molecular markers. The clinical setting: While there is still tremendous progress to be made toward the dream of personalised healthcare, current medical research demonstrates the power of the next generation sequencing and genomic enrichment technologies to uncover the genetic basis of human disease. n
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Maximising throughput By Kamni Vijay
he polymerase chain reaction (PCR) has traditionally been optimised for specificity and, to a lesser extent, product yield. The speed with which the reaction is completed has been of secondary importance. The availability of software for primer and PCR product design and the use of reagents that can tolerate a range of reaction conditions have allowed researchers to focus on maximising throughput by minimising PCR cycling times. Here we discuss the time savings in fast PCR and fast quantitative PCR (qPCR) that can be made by modifying thermal cycling conditions and choosing appropriate enzymes tailored for fast cycling.
ture range typical for primer annealing (5570°C), the annealing and extension steps of a PCR or qPCR protocol can often be consolidated into a single shortened step. A 15 second combined incubation can be sufficient for PCR products up to 500 bp. Furthermore, a combined annealing and extension step at 60°C is typical for qPCR assays using dye-based fluorescence or dual-labelled probes. Final extension – A post-PCR final incubation step of five to 10 minutes at 72°C is often recommended to promote complete synthesis of all PCR products, for visualisation on gels or
catalytic activity or enzyme stability. This technology improves speed, robustness, capacity of synthesising longer products and tolerance of PCR inhibitors. In general, longer targets (above 1 kb) need longer extension times, resulting in runs that can last several hours. The extremely high processivity of iProof polymerase enables extension to be completed more quickly with significantly less enzyme than is required for other polymerases. Time savings of up to three-or-four fold and increased reaction success have been obtained with iProof DNA polymerase.
Saving time during PCR and qPCR runs Standard protocols for amplifying targets of less than 1000 bp include several steps, each of which can be modified to shorten overall run times from about 90 minutes to less than 30 minutes. Initial denaturation – When using an antibody-modified hot-start polymerase, both polymerase activation and initial denaturation can be accomplished in 15-30 seconds at 98°C. Denaturation while cycling – A one second denaturation at 92°C is sufficient for various PCR products. This is consistent with the observation that temperatures above 92°C are unnecessary for denaturing PCR products shorter than 500 bp (Yap and McGee 1991). Annealing and extension – Because most polymerases are highly active in the tempera-
Kamni Vijay is Marketing Manager for Genomics at Bio-Rad Laboratories. She directs product development in the areas of PCR, qPCR and emerging technologies. She began her career in the life science industry at MJ Research after completing her PhD from the University of California, Davis in 2001.
for cloning. We have found that this step can be shortened to 30-60 sec for products up to 1 kb. Number of cycles – Target DNA concentration is often unknown in PCR, and may be only a few hundred copies per reaction. For this reason, researchers usually prefer to run 30-45 cycles of PCR despite the potential time savings of running fewer cycles.
Novel enzyme revolutionises thermal cycling Historically, PCR polymerases provided either high fidelity or high processivity, but not both. Now, using patented Sso7d fusion protein technology, Bio-Rad has incorporated both these parameters into a single enzyme: iProof* high-fidelity DNA polymerase. This novel polymerase accurately amplifies a wide range of DNA templates for use in various applications. Sso7d gives polymerases a sliding grip on the minor groove of the replicated DNA, dramatically increasing processivity without compromising
Sso7d fusion technology has also been incorporated into a supermix for use in fast realtime qPCR – SsoFast EvaGreen supermix. The unique combination of a fusion DNA polymerase with EvaGreen dye and an optimised buffer system delivers unrivalled speed and performance for various qPCR applications, including high resolution melt analysis and direct PCR. This mix is uniquely tolerant to PCR inhibitors, allowing qPCR results to be obtained in less than 30 minutes. We have described several ways to maximise the time savings in PCR and qPCR. Portions of this article have been excerpted from Fast PCR: Minimizing Run Times, Maximizing Throughput, appearing in Volume 118 of BioRad’s periodical, BioRadiations. Please visit www.bio-rad.com to download your copy of the full-length article. n
* U.S. patent 6,627,424. Yap EP and McGee JO (1991). Slide PCR: DNA amplification from cell samples on microscopic glass slides. Nucleic Acids Res 19, 4924.
Pest control How an image of a man coughing up a rat can help protecting the public and pharmaceutical companies against counterfeit drugs.
iscerning whether the pharmaceutical supply chain has been breached and investigating alleged cases is a responsibility certainly not for the faint-hearted. Mick Deats, Group Manager of Enforcement at the Medicines and Healthcare products Regulatory Agency, is responsible for sniffing out counterfeit medicines, and with many cases becoming criminal investigations, it’s no easy task. Through a recent series of advertisements screened in cinemas, the MHRA, in conjunction with Pfizer and several patient associations, aimed to raise awareness among the public of the risks of purchasing counterfeit medicines. The World Health Organisation recently issued statistics suggesting that up to 50 percent of medicines supplied from websites that conceal their physical address are counterfeit. The ad was aimed at persuading people not to buy drugs from the internet or other dubious sources. The message was delivered to the public through a very hard-hitting campaign –a man is seen to cough up a rat, making reference to the fact that rat poison has been found in the past in counterfeit medicines. As Deats explains, the ads attracted a lot of interest. “We were pleased to see that hard-hitting approach. It’s what was required. And when you look at other ad campaigns that are trying to increase public awareness about risks, you generally see that they have to be hard-hitting for you to remember them, and this one certainly was. It was shown in cinemas to those 15 and above, which is our target audience.”
Vigilance is key The MHRA is a UK government agency responsible for ensuring that medical devices and medicines work, and that they’re acceptably safe, which it does through a regime of licensing, inspection and market surveillance. The agency is exceptionally vigilant and has an intelligence group as its enforcement to tackle any allegations that are made regarding medicine and the law.
“There are cases referred to us by members of the public, other regulatory bodies, law enforcement, healthcare professionals, patients; there’s a whole range of ways that referrals are made into the agency. In my particular unit, we receive around 1500 referrals a year, which are assessed and a proportion of them will become criminal investigations,” says Deats. Discovery usually through reports to the agency, via members of the public reporting suspicions, or reports from others working within the supply chain. Onsite inspections have led to numerous discoveries of counterfeit medicines, and once these have been found, MHRA works quickly to protect public health by launching a full and very detailed criminal investigation, with a view to prosecuting those involved. “We’ve run counterfeit hotlines here, and there are methods for people reporting any suspicions through our website. We’ve seen numbers rise due to people’s awareness increasing. We always encourage that. If people are suspicious about their medicines then it can always be reported to us very easily from the front page of our website or on the phone to a counterfeit hotline,” explains Deats.
Organisational structure The MHRA is made up of 10 divisions, with approximately 900 staff; 45 of whom make up the enforcement group. Every European country
has a medicines agency, but the UK is quite unusual in terms of the enforcement and intelligence group being substantially larger. “Counterfeit medicines in Europe, but specifically in the UK, arrive in two different ways. Firstly, and most commonly, it’s through unregulated internet websites that could be hosted anywhere in the world, who make their products available to anybody in Europe or in the UK. “The less common way of counterfeits reaching patients is through the regulated supply chain, and that’s through licensed wholesalers and pharmacies. Fortunately, that is a very rare occurrence, but nevertheless, since 2004, it’s led to nine recalls of medicines here in the UK. There’s a high degree of confidence in the medicines you obtain from a pharmacy. So anything that damages that confidence is a really bad thing to occur,” he says. The MHRA focuses much of its attention on the counterfeits trafficked through internet supply. However, with the internet being completely open and continuing to expand, this is no easy task, and the difficulty of defining the lines of jurisdiction adds to the already existing problems. “If the websites are hosted in the UK or the medicines are being supplied from within the UK, that brings it within our jurisdiction, which we can investigate. If necessary we can prosecute the case, which we have done on a number of occasions. But if the website is hosted elsewhere in the world, then it’s not within our jurisdiction, and so we pass that information to the relevant authorities. It’s up to them as to what action they take. “It’s a challenging area. Our focus is to give the public sufficient information to make an informed choice as to whether it’s a good idea to be obtaining your medicines from unregulated websites, which is why we’ve begun the advertising campaigns.”
sider issuing a recall notice and getting it back and getting it taken off the shelves.” How can companies protect themselves against fake drugs making their way into the supply chain? Deats explains that most of the large drug companies have security departments that are devoted to tackling those people that are infringing their intellectual property rights. This often leads to an overlap between intellectual property rights issues and public health issues. However, the MHRA does not function to protect brands, but solely public health, unlike pharmaceutical companies, who can also seek to protect their brands. This angle of brand protection enables prosecutions from investigations to be carried out using a combination of medical, intellectual property and money laundering legislation, to ensure the courts have a full report of the criminal activity with which to pass the sentence. “It allows the court to deal with the case in an appropriate manner. The maximum sentence under the medicines act is two years in prison with unlimited fine. The maximum sentence under trademark legislation is 10 years, and under money laundering it’s 14 years. So we don’t restrict ourselves by purely dealing with them under the medicines legislation. “The European Commission and our agency have just completed the public consultation process on measures to tighten the supply chain, and part of the recommendations of this are the need for specific criminal offenses to tackle counterfeit medicine, because at the moment we rely on Medicines Act legislation. This doesn’t carry the type of penalty that you need to deter people controlling multimillion-euro organisations, importing medicine from the other side of the world and infiltrating it into our supply chains. “Obviously, we’re keen to get the message out about public safety and the risks attached to obtaining your medicines from the internet. We would always advise people to have a face-to-face consultation with a healthcare professional and obtain their medicines with a prescription. “As far as the internet’s concerned, we’re very keen to get the message out to the public because the internet wasn’t originally designed to be regulated, and because of its global nature, it’s extremely difficult to deal with. The people that run these operations realise that it’s a wise move on their behalf to host their websites in countries that are difficult to do business with.” n
“Current legislation doesn’t carry the type of penalty you need to tackle people dealing in multimillion-euro organisations, importing medicine from the other side of the world and infiltrating it into our supply chains”
Legitimate leaks Another increasingly worrying issue is the potential for counterfeit medicines to infiltrate into legitimate supply chains. “We’ve seen it happen in the past, where unlicensed traders or brokers are feeding counterfeit medicine into people who are authorised to trade in medicines in the supply chain. These traders have either been duped or turned a blind eye, or are criminally involved and knowingly inserting that into the supply chain for profit,” explains Deats. “We tackle that type of thing firstly by taking steps to ensure that the product is seized or quarantined and prevented from getting out to market. However, if it has got out to market, that’s when we con-
Cisbio Bioassays ATE:13sept
ASK THE EXPERT
New HTRF cellular platform Reagents and technology to address the latest evolution in the GPCR drug discovery field.
SNAP-tag JEAN-LUC TARDIEU
n a recent publication, Maurel et al* presented the combination of Cisbio’s HTRF and Covalys’ SNAP-tag technologies to specifically address cell-surface protein-protein interaction. In this study, an application for GPCR oligomerisation is accurately documented and the advantages of this new approach presented. Today, Cisbio introduces a comprehensive reagent platform developed with this combination of technologies. This offer is based on the expression of a fusion protein between the external position of the 7-transmembranaire fragment (7TM) and a SNAP-tag (20 kDa). Streamlined for highly selective ligand binding and receptor dimerisation assays, this rapid and non-radioactive platform will meet needs for a comprehensive investigation of receptor network signalling, and will preserve the functionality of the receptor and the intracellular signalling pathway.
GPCR Beyond the wide variety of classes of GPCR and drugs, signalling pathways induced by the specific receptor ligand binding receptor are ubiquitous. The GPCR signalling network is a cascade of intracellular events that serve as models for the development of functional tests. It is admitted today that a proper understanding of the drug action mechanisms and the activation of this signalosome requires the implementation of cell-based assays covering receptor binding, second messenger accumulation, or more downstream assays such as MAPK activation pathway, with the measurement of ERK phosphorylation or desensitisation mechanisms involving beta arrestin.
SNAP- & CLIP-tags are fusion proteins developed by Covalys. Those tags can be considered as suicide enzymes that specifically and covalently combine to their substrates, respectively benzyl guanine and benzyl cytosine. These substrates can be derivatised with HTRF partners such as terbium cryptate (Lumi4-Tb) and green or red derivatised acceptors. Once transfected into the cell, a plasmid construction developed with the appropriate pSNAP or pCLIP plasmid and the gene of the GPCR of interest leads to expression of the GPCR as a fusion protein with the SNAP- or CLIP-tag protein (Fig. 1). In their study, Maurel et al describe the simultaneous dynamic localisation of heteromeric and homomeric receptors at the cell membrane surface. As mentioned by the authors, this new technology is an alternative to existing bioluminescence resonance energy transfer (BRET) and FRET assays. The combination of SNAP-tag and HTRF technology results in particular features sought for the study of cell surface receptors. In addition the tag-substrates developed by Cisbio are non-permeant and therefore specifically label cell surface proteins with the
Jean-Luc Tardieu has been product manager at Cisbio Bioassays in Bagnolssur-Cèze, France, since joining the company in 2004. He earned his PhD from the Technology University of Compiegne (UTC), France. appropriate HTRF-compatible fluorophore. In fact, no fluorescence resonance energy transfer (FRET) can occur within intracellular compartments where proteins accumulate during GPCR internalisation or maturation process. Finally, those substrates are chemically inert for other proteins, avoiding nonspecific labelling in the membrane labelling. With this new HTRF-based cell-surface receptor platform, Cisbio provides reagents and technology to address the latest evolution in the GPCR drug discovery field. Applications to highly selective and non-radioactive ligand binding assays are described and the 7TM dimerisation model can properly be investigated with streamlined and specific cell-surface tools. *Maurel et al, Nat. Methods 5, 561-567 (2008) Cell-surface proteinprotein interaction analysis with time-resolved FRET and SNAP-tag technologies: application to GPCR oligomerisation.
Fig 1: Fusion of GPCR X with SNAP-tag in N-term position. The first step consists of creating a plasmidic construction encoding for both the receptor and the labelling tag. Then, this construction is used to transfect the cell host.
Gene of GPCRX
A new PeT imAging AgenT A new imaging agent, 64Cu-DOTA-bevacizumab, has been developed for scanning of tumor growth and functional imaging of angiogenesis in animal tumor models.
he new agent gives a much clearer and more precise image than existing methods (18FDG). This discovery has the potential to revolutionise preclinical cancer research and possibly clinical practice of cancer diagnosis.
Tumour imaging New drug discovery generally spans 10 to 15 years. To develop novel drugs more quickly and cost-effectively, many new technologies have been used, including multi-modality imaging techniques. Positron emission tomography (PET) is a noninvasive imaging technique that provides a means to obtain information about drug behaviour and functional efficacy during drug development. PET is used extensively in both preclinical research and clinical practice of cancer diagnosis and therapy. In the past two decades, hundreds of articles have been published on cancer drug development in the field of therapeutic PET imaging of cancer patients and preclinical cancer research on tumor animal models. The articles focus mainly on the gold-standard imaging agent 18FDG (fluoro-18-deoxy-glucose), which monitors the metabolic functional change of tumours. In recent years, tumour angiogenesis imaging has drawn a lot of attention to anti-angiogenic drug development. Angiogenesis is a fundamental process in which a growing tumour creates its own blood supply by forming new blood vessels around tumour tissue. Bevacizumab is an antibody that targets vascular endothelial growth factor (VEGF), a signalling protein released by tumour cells, and plays an important role in angiogenesis. VEGF-related angiogenesis is a nearly universal phenomenon for most types of solid tumors. Currently, bevacizumab is being used to treat patients with advanced colorectal cancer and is being tested in several other metastatic cancers. Based on our preliminary imaging results, the new imaging
agent 64Cu-DOTA-bevacizumab is able to serve as the next generation of PET imaging agents in preclinical cancer drug research in the following directions. Tumour growth: The new imaging agent could help researchers detect and observe the growth of tumours located at greater depth in the body and offers better sensitivity and diagnostic imaging contrast. Estimate tumour size: According to our results, bevacizumab imaging offers clearer contours of the tumours than other probes. With appropriate image analysis and experiment design, it could help researchers estimate the size of tumours and further monitor the therapeutic effect of certain treatments. Observe angiogenesis-related events: The release of VEGF is strongly related to angiogenesis. 64Cu-DOTA-bevacizumab can provide information about distribution and change of VEGF at different time points. Furthermore, this information can be used for evaluation of the functional effect of other anti-angiogenesis drugs. Also, it can tell the researcher which part of the tumour is actively undergoing angiogenesis at a specific time point. VEGF is related to hypoxia and inflammation as well. Therefore, this probe may be used to obtain indirect indication of hypoxia and inflammation.
Evaluate other anti-cancer drug candidates: It could offer information on the percentage of the total injection dose of bevacizumab accumulated in a tumour and in other organs as a contrast. The pharmacokinetics and distribution of bevacizumab in the tumour could be revealed by dynamic PET imaging. The same imaging strategy can be used to evaluate the pharmacokinetics and distribution of other anti-cancer drug candidates, such as antibody, aptamer, siRNA, hormone, peptide and oligonucleatide. 64Cu-DOTA-bevacizumab can be used as a tumour diagnostic agent by PET imaging in preZheng â€˜Jimâ€™ wang has more than clinical research on animal models. The radiola12 years of experience in molecular belled tracer as a new imaging agent is highly imaging research and nuclear sensitive in pancreatic, breast and lung cancer medicine. He was an assistant animal models, and possibly in other types professor at the University of Texas of solid tumour animal models. The tumourHealth Science Center at San Antonio tissue contrast and in vivo bio-distribution are and is currently the Director of superior to the current clinical standard 18FDG Molecular Imaging at MPI Research. imaging in tumour animal models. n For more information, please visit www.mpiresearch.com
A revolution in personalised medicine How biochip array technology is transforming pharmacogenetics.
he pharmaceutical market is changing fast and industry has been required to move quickly to keep pace with this dynamic situation. There is, however, a lot of work still to be done, with only 30-60 percent of common drug therapies being successful and up to seven percent of hospital admissions in the US due to adverse drug reactions, many fatal.The trial and error approach applied to drug treatments is no longer a viable option for the industry, for medical practitioners, for healthcare payors or for patients. Biochip array technology (BAT) now offers rapid genetic screening in a multiplex array, to facilitate the drive towards personalised healthcare. One of the key breakthroughs in the postgenomic era is the realisation that small genetic changes can greatly increase an individual’s risk of developing disease, or can influence their response to therapy. This has led to the rapidly expanding field of pharmacogenetics. All the major pharmaceutical companies are now conducting research in this exciting arena and are applying this to all facets of their work, from drug discovery to companion diagnostics. This is reflected in the increase in the number of submissions to the Food and Drug Administration (FDA) and the European Medicines Agency (EMEA) involving pharmacogenetics.There are an increasing number of approved drugs on the market, including tamoxifen, warfarin and 5-fluorouracil, which strongly recommend companion genetic profiling tests before treatment. It is envisaged (and included in FDA guidelines) that pharmacogenetics will become a standard component in drug development in the near future.
“Small genetic changes can greatly increase an individual’s risk of developing disease” Pharmacogenetics testing is currently applied to preclinical investigations of biomarkers for drug response or drug-induced toxicity, including identifying genes with variations that
Martin Crockard is a molecular biologist with a role in both R&D and business development at Randox. Research interests include the development of prognostic expression arrays for breast and ovarian cancer and SNP profiling for predisposition and companion screening for cardiac diseases and cancers.
may identify sub-populations. It is being applied to phase I studies to explain outliers or inter-patient variability, to stratify patients into response groups and phase II and III studies to exclude individuals at risk. This allows the development of drugs for specific patient groups with differing clinical genetic profiles. Where new pathways or metabolic influences are discovered, it may lead to the re-investigation of previously failed drugs, if a genetic influence can be established. This will identify niche therapies, adding value to the pharmaceutical back catalogue. Conversely, poorly metabolised drugs may not benefit the patient in the manner required and accumulate to toxic levels, leading to an adverse patient reaction. Determining the genetic profile of the enzymes known to influence metabolism, such as the CYP450 gene family, can, in combination with traditional indicators, such as age, weight and disease severity, facilitate the correct dose of the
right drug that most suits the needs of the individual patient. This is the foundation for truly personalised medicine and is where screening for SNPs in CYP450 genes can make a profound difference to clinical treatment and prognosis. Genetic testing can follow three main pathways; predisposition screening, early detection through population screening and pharmacogenetics, with dual-purpose markers. An example of how Randox BAT can provide a combined approach for clinical solutions is the diagnosis and treatment of colorectal cancer (CRC). RanplexCRC is a mutation detection assay, utilising biochip array technology (BAT) that can detect CRC at a pre-malignant stage, enabling rapid and effective treatment regimes. This faecal DNA multiplex assay looks for 28 mutations in four genes known to be associated with CRC (APC, KRAS, BRAF and TP53). Detection of any of these mutations will indicate the presence of a pre-malignant or malignant lesion in over 70 percent of CRCs. KRAS mutations may also determine whether the patient will respond to anti-EGFR therapy, a treatment commonly given to CRC patients. Mutated KRAS genes have been found in 40 percent of metastatic CRC, so this percentage of patients may receive anti-EGFR therapy unnecessarily, unless a primary screen has been conducted. Utilising Randox’s award-winning biochip array technology, we are working closely with industry experts to develop custom SNP arrays, both for predisposition screening and drug metabolism profiling. Randox provide protein, DNA and RNA diagnostic solutions with clinical levels of evidence on platforms that can accommodate basic research (investigator), high throughput clinical screening (evidence) and near-patient diagnosis (multistat). The well-established principles of the assay and test platforms ensure a rapid development time, so assays can quickly be customised to suit the needs of pharmaceutical testing or service laboratories.
For more information, please contact email@example.com or visit www.randox.com.
Melior Discovery :13sept
A new model for drug discovery The productivity crisis in pharmaceutical drug discovery, or ‘innovation gap’ as it has been coined, is well recognised and the subject of much debate in the industry and spectator commentary.
ith only 18 NCEs approved in 2007, and an average cost of developing a single NCE now exceeding $1 billion, the pharma R&D model is arguably unsustainable in its current form. In comparing the productivity of the industry over the last several decades it is useful to consider the evolving drug discovery paradigm during this period. Within the last 20 years the drug discovery paradigm has increasingly embraced a central dogma for discovery that is recognised today as ‘targetbased medicinal chemistry’. Central to this paradigm are the well-recognised and structured stages of early drug discovery, including target identification, high throughput screening, and lead optimisation efforts. Prior to this period, the industry discovery paradigm was not as well organised and much more subject to serendipity. Contrary to widely held expectations, the modern paradigm has delivered the lowest rate of new drug approvals in a generation.
“The existing pharma discovery paradigm needs to be supplemented with a complementary strategy”
It is important to note that target-based drug discovery is a hypothesis-based approach. These hypotheses have their origins in an existing collective knowledge base that we must now accept is incomplete. Although the postgenomics era heralded the discovery of a plethora of ‘new’ molecular targets, there remains a very poor understanding of the spectrum of biology influenced by any given target. For any given protein receptor, for example, our understanding of the biochemical pathways does not
Andrew Reaume, is President and CEO of Melior Discovery, Inc., which he co-founded in 2005 with Michael Saporito. Prior to Melior, Reaume held positions of increasing responsibility at Pfizer Global Research and Development. Reaume received a PhD in genetics from the University of Connecticut and an MBA with honours from the Wharton School.
begin to describe the complex interactions in that pathway that may be biologically relevant, neither is there a complete appreciation of the putative target’s influence on intersecting pathways. This statement is certainly true in a simple cell-based system, yet the complexity of these interactions rises exponentially when we consider a fully assembled organism. In a pharmaceutical R&D environment this biological complexity, and associated incomplete knowledge, manifests itself in the high attrition rates associated with drug development. It further reveals itself in the form of unexpected beneficial effects such as the analgesic properties of the gabapentinoids in neuropathic pain and the many pleiotropic effects of the statins. Melior Discovery proposes that, in consideration of the limitations of the current industry’s
central dogma, the existing pharma discovery paradigm needs to be supplemented with a complementary strategy that offers the potential to more rapidly and efficiently identify alternative beneficial activities. Given the apparent limitations of target-based drug discovery, there is a compelling rationale for an approach that is not constrained by the aforementioned knowledge gaps. Melior Discovery has developed a platform for the optimal phenotypic screening of large numbers of compounds. TheraTRACE is comprised of approximately 40 animal models of disease representing a very broad therapeutic area spectrum. Normally, the proposition of screening a compound across 40 sophisticated animal models would be deemed impractical. However, the company has succeeded in making the largely impossible, possible by developing a means to ‘multiplex’ animal model without compromising the quality of the underlying models. By taking therapeutic candidates and systematically screening them across 40 models of disease, Melior has adopted a form of non-hypothesis-driven drug discovery. Only in this way is it possible to uncover otherwise truly unpredicted biology associated with a compound. Further, by screening in clinically relevant preclinical models of disease, this approach uncovers the most salient unpredicted biology as opposed to generating less useful phenomenology. Very often, the unexpected biology is of therapeutic relevance and has been the basis of Melior’s drug repositioning efforts. Indeed, in a relatively short time, the company has built its own pipeline of therapeutic candidates repositioned from a library of drug candidates previously developed for other indications. Increasingly, pharmaceutical companies are adopting this approach and partnering with Melior in order to profile discontinued compounds as well as preclinical candidates in order to fully explore the pharmacological fingerprint of compounds destined to enter the clinic.
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Patient power Millennium’s Isabelle Mercier tells NGP about the rising power of patient influence and marketing’s delivery of information demand.
s we continue stumbling through times of uncertainty and despondency, the call for transparency and accountability has been heightened throughout society, from politicians who don’t pay their taxes, to over-thetop executive bonuses. The same is true for the coordination of marketing in the pharmaceutical industry, as the power of patient desire for information is determining the way in which pharmaceutical companies operate. “Patients have become much more aware of and assertive in finding information about their disease and their treatment options,” says Isabelle Mercier, VP of Marketing at Millennium. “What’s changing, from a marketing perspective, is the way in which we provide additional in-
treatment information and must take on a more informative role than they have previously. “The most relevant trend is that of demand for full disclosure of information, which is becoming more stringent. That full disclosure is an opportunity for the pharmaceutical company to enhance the understanding of the treatment options and/or the particular therapeutic option that the pharmaceutical company has to offer,” says Mercier. A greater role of responsibility, if seized upon with an opportunistic approach, can allow for pharmaceutical companies to approach healthcare with an element of creativity as it provides more valuable and insightful information. In her new role as Vice President of Marketing, Mercier will be leading and develop-
“Patients have become much more assertive in finding information about their disease and their treatment options” formation and insights to the patients, allowing them to become more informed and educated about their treatment options. “From a marketing perspective, we have to be prepared to engage them differently: traditionally it’s been more the healthcare team being the conduit of information to the patient, but increasingly you hear of the patient coming in with printouts from the internet, with information they heard on the radio or saw on TV, demanding more from their healthcare team. We as a pharmaceutical company have an opportunity to play a role in educating patients, which is probably the most striking change in the pharmaceutical marketing.”
More responsibility Pharmaceutical companies are now facing the responsibility of providing patients with
ing the US and global marketing strategy for the commercialisation of late phase development products, along with oncology market products. “Millennium is specific to oncology and has a vision of developing and delivering first class therapeutic agents, aiming to offer more patients across the globe new innovative therapeutic agents to advance cancer care. “When you look at the portfolio of pipeline agents, the late phase products, as well as currently marketed products, are either best or first in class, which speaks volumes to the engagement that Millennium has. This is done from a scientific perspective of understanding the specific mechanisms that lead to cancer genesis and targeting the ones that are the most relevant to counter that cancer development, providing that option to offer more patients
treatment across the world.” It is global visions such as this that provide the company with its methods for branding. Millennium’s approach to branding is very different to that of other pharmaceutical companies. As their entire focus is cancer care, the link between the product and the company vision is inherent. “Due to the fact that we are solely focused on cancer care and interested in serving the patient with high level science therapeutic options, that potential conflict between corporate branding and actual therapeutic agents is not an issue here at Millennium, which
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As a company that has demonstrated how to successfully build a corporate brand, Mercier advises that it is the strategic decisions the company has made that allowed them to successfully project a specific image. “Branding is a question of what the company wants to be known for. We want to be known for having the ability to take high-level science and transform it into therapeutic options for patients, and we have already demonstrated this through currently marketed products, such as the delivery of Velcade. So the concept of bringing science from the bench to the clinic is something that’s very familiar to us. “Other organisations tend to identify themselves more as pharmaceutical companies and do not necessarily have that sort of predefined identify of being a pharmaceutical company that is known for its science. We have transitioned already from that perspective because we are focusing on cancer care and stated this by naming ourselves as Millennium, the Takeda Oncology Company,” says Mercier. As Mercier explains, the development of marketing strategies is not about to change in a dramatic way, both for the industry and Millennium itself. “Understanding to a greater extent your customers, understanding their needs, their wish lists, and designing and assessing how you can address those needs and wishes is what is subject to change.
“What will evolve is the development of personalised medicine, especially in cancer care. It’s a significant trend, so from a pharmaceutical company perspective our need is to be laserfocused on the disease, on the customer and on the patient, and the positioning of a brand will need to be there to address those needs. We’re going to take even more of a specialised, customised approach, just like medicine is evolving in that direction. “A specialised approach is going to involve targeting specific diseases with specific characteristics, avoiding the over-treating of patients that probably would not benefit from the therapy, and instead providing maximum benefit with balancing the risk associated with any therapeutication for a better defined group of patients and/or diseases that your therapy might be best suited for.” Such marketing techniques of specialised products and focusing on the development of personalised medicines have certainly benefited Millennium’s branding, as it continues to align its strategies on cancer care. “This is a tremendous opportunity for Millennium to be part of the transforming of cancer care into a chronic disease. The evolution of cancer survivals have made great strides in the past ten years; there’s a lot more to be done and certainly we are very much engaged in being part of making that happen and serving the patients.” n
it makes it a unique organisation from that perspective,” says Mercier. “If you think of the larger pharmaceutical companies, the struggle they always find themselves facing is due to them not focusing on a single therapeutic area: on a single disease, or disease state. Since every cancer is different from each other, they do face an identity barrier between the therapeutic options they offer and their organisation as a whole. As a specific oncology company, Millennium is a therapeutic agent entirely dedicated to advancing cancer care, and therefore we avoid that identity barrier.”
Millennium Pharmaceuticals, Inc., was established in 1993 as a genomics company applying world-class recombinant technology to the discovery and development of innovative new therapies in a broad spectrum of diseases. Millennium has since grown into a fully integrated biopharmaceutical company with a pipeline of investigational drug candidates, as well as a commercialised medicine derived from Nobel Prize-winning science that is now approved in more than 87 countries worldwide. In 2005, the company's leadership changed as Founder Mark Levin turned the helm over to Deborah Dunsire. For the next several years, significant refocusing and reconfiguration took place within the company, as well as improvements in the scale and strength of its commercial operations. In May 2008, Millennium was acquired by Takeda Pharmaceutical Company Limited. Takeda is the largest pharmaceutical company in Japan, and a global enterprise with an important presence in key markets. Millennium now operates as an independent subsidiary, serving as the global center of excellence in oncology under its new name: Millennium: The Takeda Oncology Company.
KNOCKING ON A DIFFICULT DOOR As payors gain increasing power over access to medicines, Justin van Gennep examines their particular priorities and explores how to address their needs for the benefit of the patient.
he role of the payor in determining treatment paradigms for patients is growing globally. ‘Payors’ are those who manage the cost of healthcare, and they are under increasing pressure to balance the budgets in the long and short term. Their decisions are therefore influenced by a range of health economic arguments, which presents a more complex perspective of the cost: benefit ratio. In the US healthcare system, the managed care marketplace represents a key payor sector that wields a significant level of clout in the healthcare landscape and has changed the dynamic between care organisations and pharmaceutical suppliers. As the impact of managed care’s growth continues to unfold, questions about how pharmaceutical companies approach and sell to this channel have become increasingly important to drug companies’ bottom lines. This phenomenon is not new however. For years, drug companies around the world have struggled with exactly how best to approach payor audiences. With sustained pressure to moderate healthcare costs, payors, particularly those that manage large populations, remain a critical audience, if for no other reason than the potential for volume selling. For many drug makers, however, a number of factors are contributing to the unstable nature of selling to such groups.
In the US, these factors include the second year of Medicare Part D programs, rapid generic substitution rates and possible increased political pressure from the change of political control within the US Congress. In the UK, with a 60-year history as the world’s largest nationalised healthcare system, the NHS provides a full-scale example of the reliance of payors on robust data and information when making decisions about access to drugs. The National Institute for Health and Clinical Excellence (NICE) determines what drugs will be funded by the NHS based on the same safety and efficacy information used by national health systems around the world, but with additional requirements to prove cost-effectiveness. NICE guidance has indisputable power in determining which treatments the NHS ultimately includes in the formulary. Pharma companies selling to managed care organisations in the US and other payor groups across the globe will increasingly have to use similar standards of evidence. They must then ensure that their sales forces are equipped to succeed within a complex environment with multiple stakeholders, potentially with different roles being applied across the life cycle of a product.
A complex environment The increased presence of organisations charged with ‘gate keeping’ access to care is an example of the more complex selling environment that pharmaceutical sales reps can face. To make their decisions, payors are now demanding more robust information from pharma, including data on the long-term cost impact of medicines and treatments, which highlight the health and cost benefits over the long term, rather than just considering the unit cost. Also, evidence of disease prevention is being used, such as the prevention of co-morbidities in chronic diseases (diabetes, cardiovascular disease and obesity), and real-world data to support the safe and effective use of pharma products across the general population. Payors are also using ongoing product value demonstrations, so that following initial pricing approval, many regional and local payors will look for data to support continued availability of products on formulary.
The need for value Healthcare providers and payors are thus focusing increasingly on value and health outcomes, preferring to fund and prescribe medicines that are supported by a wealth of ‘real-life’ data. As a result, the pharmaceutical industry must ensure its offerings are closely aligned with these desires and needs; in short, to help gatekeepers allocate resources equitably and efficiently. In Spain for example, it is a requirement of regulators that pharma companies prove the favourable economic profile of new drug treatments. In addition, they must deal with autonomous regional health authorities and it is therefore essential that they establish solid and transparent alliances with these regional governments and back up their claims with real data obtained with clinical practice. Safety and efficacy data that support new entrants into established product classes will need to be not only stronger, but more comprehensive – requiring developers to collate real-world patient information for regulators on a continual basis. The influence over prescribing decisions of proven outcomes and established tolerability is set to surpass even the industry’s most powerful branding activities. Health technology assessment too is developing, placing greater emphasis on the broader value contribution that a medicine makes to healthcare and society (i.e. evaluating its budgetary impact over the longer term and taking into account the benefits supplementary to direct treatment, such as reducing hospital admissions and preventing exacerbations). In the UK, NICE is consulting over its future expansion – in size as well as in scope, giving more weight to a medicine’s broader value contribution. Many health authorities are looking to what is happening in the UK as they do develop methods of controlling and managing healthcare.
Key to success The key to successful pharmaceutical sales within the payor market is in the ability to offer something more than a volume discount on the product itself. Because pharmacy directors and medical directors often are responsible for both clinical and fiduciary responsibilities, pharmaceutical sales representatives increasingly seek new
Justin van Gennep, serves as Senior Vice President and Head of Innovex for Europe, Middle East and Africa. He joined Quintiles/Innovex in 1998 as Managing Director for Innovex and Quintiles in Germany and possesses more than 25 years of experience as a business leader in the pharmaceutical industry.
ways to bring additional value to the table. Of course, this requires a team of people who have good understanding of the market and the considerations that are important to payors. For pharmaceutical sales organisations, the issue comes down in large part to the complex mechanisms used to determine the ultimate relationship between physician, payor, patient and product. For a pharmaceutical manufacturer, the ability to place a product in the first or second line of a payor’s formulary can mean the sales equivalent of life or death. However, in order to achieve this placement, a broader focus and more seasoned sales experience is usually required. In some parts of Europe, payors are looking into new pricing strategies such as pay for performance or risk-sharing. In both cases, pharmaceutical companies will need to prove – in real-world scenarios – that their drug or treatment works effectively and efficiently, either to get a better price for the product or to continue to be listed on the formulary. Patient-centric programmes can be designed to both support the delivery of such information and help to better manage chronic diseases by identifying patients and treating risk factors early. Such programmes, managed by an independent organisation such as Innovex, can also provide the all-important real-world clinical data that – owing to strict regulations governing their relations with patients – pharma cannot collect on its own. One example that can be used is in diabetes: programmes designed to identify uncontrolled diabetes patients can provide clear benefits to all. Patients benefit from improved understanding of the disease and its treatment, increasing therapy adherence and improving quality of life. Physicians gain improvements in their relationships with patients, better health outcomes for their patients, and a better understanding for practice staff in how to run patient identification programmes in the future. For payors, the benefit is in preventing the cost burden of treating co-morbidities associated with uncontrolled patients, whose symptoms are inevitably worse, and treatment therefore more expensive, when left undiagnosed or untreated. With payors becoming such a significant stakeholder in determining what drugs patients can access, and their increasing reliance on data and real-life evidence in decision-making, the sales process for these organisations requires a more consultative sell. It is essential to have good understanding of and the ability to respond to the unique and complex concerns of payors to be successful in this new era of pharmaceutical sales. n
The grass is always
How pharmaceutical companies influence patient groups to create a grassroots demand for their products. By Natalie Brandweiner
term first used by former US Senator Lloyd Bentsen, astroturfing has come to be known as the imitating or faking of popular opinion or behaviour. Within the pharmaceutical industry, it is the name given to the behind-the-scenes funding of prominent patient representative groups by some pharmaceutical companies. Such close-knit relationships between drug companies and patient groups throws the integrity of both parties into question. But should the drug firms bear the brunt of all the negative press, or should patient groups be dealt just as much responsibility for accepting their funding? There are very few patient groups that are transparent about funding: how much they get and how they arrived at that figure. Non-profit organisations are not required by law to outline the sources of their funding or how much they may be storing in their kitties. It’s only through careful examination of tax returns and annual reports that detailed figures can be arrived at.
As representatives of those affected by certain diseases, the function of patient groups is to offer support to the public, with the patients as their primary concern, campaigning
extent of influence by drug firms on patient groups attempted to find out exactly how many dollars were being used to buy marketing power. In certain cases, the donation
for treatments and sitting on advisory committees. Although some patient groups are large and powerful, many are small and are subject to the financial and lobbying restrictions. For those with little or no lobbying power and only a small membership in tow, there is a perhaps understandable temptation to accept the readily available funds from pharma companies to help fund their activities and prolong their existence. And why shouldn’t the drug companies seize upon these opportunities? They are looking to make a profit like any other business; their stock price will always be among their primary concerns. By filtering their marketing message into patient groups, drug firms can reach the public in a very effective way. The problem with this being that so many people place their trust in the groups they believe are representing them, and have limited awareness that a group’s agendas and actions may be influenced by its ties to a pharmaceutical company. The timing of the donations is often carefully planned by the drug companies to coincide with their marketing strategies. For example, Pfizer was a major fund provider to the Restless Leg Syndrome Foundation in 2003 and 2004. However, after the company announced plans to stop manufacturing its candidate RLS drug in July 2004, all donations to the patient group stopped.
funds were huge; the American Heart Association, for example, was found to have received more than $23 million (17€ million) from drug companies, and the study found that in total, seven groups received more than 20 percent of their funding from drug firms. Are the drug companies really all to blame for astroturfing? Just as the funding provides the pharma firms with influence, it also brings significant benefits for the patient groups. Some groups argue that without the funding, they would be unable to operate, and with the additional funds they are able to serve more patients than if they excluded drug firms altogether.
Influence A study undertaken by the New Scientist magazine in 2007 to investigate the
“The timing of the donations is often carefully planned by the drug companies to coincide with their marketing strategies” However, many critics claim that even if the level of transparency of a patient group is extremely high, it still loses its claim to objectivity and cannot properly represent its patient group if it receives funding from a specific group, pharma or not.n
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Down out but not
Times are tough for marketers everywhere, and no less so in the pharmaceutical sector. But take heart – the latest marketing priorities survey from Frost & Sullivan shows that marketers are not giving up the fight.
rost & Sullivan’s Growth Team Membership recently completed its 2008 marketing priorities survey. Marketing executives in North America and the European Union were asked to identify the most pressing challenges facing the marketing function for 2009. The results were as reported by directorlevel or above executives from companies with revenue of $100 million/€70 million or more. Frost & Sullivan conducted the survey to better understand the business environment factors and the key issues facing marketing executives in 2009.
Current impact Respondents were asked to select the top two environmental factors. The top business environment factors were the global economic downturn (54 percent) and the increasing need for product/service innovation (10 percent). The secondary business environment factors were
decreasing customer demand (20 percent) and intensifying competition (17 percent). In response to how the business environment factors are impacting marketing, the top three ranked factors were judged to have a negative impact – global economic downturn (80 percent), intensifying competition(70 percent), and decreasing customer demand (80 percent). The survey contained 12 questions broken out into three sections: company demographics; business environment; and key marketing issues.
MARKETING FUNCTION EFFECTIVENESS EXCEPTIONAL OTHER 4% 6% POOR 2%
Company demographics The majority of North American respondents (70 percent) work for public companies and more than 90 percent operate in a business-tobusiness (B2B) environment. Sixty percent work for firms with revenues higher than $1 billion. Conversely, 55 percent of EU respondents are from private companies and 98 percent of the EU work in B2B companies. Fifty-seven per-
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cent of respondents report working for companies with revenues higher than €700 million. The healthcare and life sciences (20 percent), and information and communication technologies (18 percent) industries had the largest participation. When asked about the effectiveness of their marketing function, only three percent of North American and four percent of EU respondents rated it as ‘exceptional’. Sixty-one percent of North American peers rated their effectiveness as ‘good’, and almost 30 percent rated it ‘fair’ or ‘poor’. Forty-five percent of EU marketers rated their effectiveness as ‘good’ and 51 percent consider it ‘fair’ or ‘poor’.
Challenges In both North America and the European Union, the survey data highlighted the negative nature of the business environment and its effects on customer demand and competition (see Table 1). While there is some variation in the key issues shaping marketers’ decision making in North America and the EU, there are many shared challenges. Accordingly, marketing has to justify its expenditures yet create new sources of growth for the company (see Table 2). Respondents were asked to identify whether their top three issues were primarily an issue of “staff, technology, or process.” Overwhelmingly in North America, respondents identified ‘process’ at the crux of their top three issues. In the EU, ‘process’ and ‘talent’ were identified as the main factors.
Going forward The global economic downturn is having the biggest impact on marketing decisions. Marketers have to justify their budgets as companies squeeze spending in light of falling customer demand. At the same time, marketing is under pressure to spur growth opportunities whether through finding new markets or developing innovative products and services. This pressure will be telling as many respondents feel the effectiveness of their function could be improved. As expected, the data highlights the negative nature of the economy and its effects on customer demand and competition. However, this recessionary environment also provides new growth opportunities in emerging markets, demand for enhanced products and services, and innovation in green and sustainable offerings.
TABLE 1 TOP FIVE BUSINESS ENVIRONMENT FACTORS FACTOR
Global economic downturn Decreasing customer demand Intensifying competition Emerging global markets Increasing need for product/ service innovation
64% 24% 21% 17% 14%
47% 19% 17% 11% 28%
TABLE 2 KEY MARKETING ISSUES ISSUE
Measuring market spend effectiveness and efficiency Identifying emerging customer needs and preferences Justifying the ROI on marketing budgets Enhancing the pace of new product and service introductions Identifying new, adjacent market opportunities Evaluating and prioritising innovation investments Improving sales and marketing integration
30% 30% 28% 25%
16% 21% 29% 24%
23% 18% 18%
24% 29% 26%
TOP SIX PRIMARY BUSINESS ENVIRONMENT FACTORS 60%
As can be expected in these turbulent times, the foremost business environment factor is the global economic downturn (54%). This is also reflected in the second business factor, the increasing need for product/service innovation to capture and retain market share.
Global economic downturn
Product/ Green/ service sustainability innovation initiatives
The top five key issues are focused on monitoring and justifying expenditures or creating new sources of revenue. The data highlights that although budgets are being scrutinized, marketing continues to be charged with catalyz-
Emerging global markets
Intensifying Corporate competition restructuring
ing growth through identifying unmet customer needs, or speeding up innovation.n
The research for the survey was carried out by Holly Lyke HoGland, Donald Savant and Keith P. O’Brien.
IMS Health ED:13sept
New commercial models Sati Sian looks at how pharmaceutical companies are reviewing their strategies to meet changing market needs. NGP. What is driving pharmaceutical companies to re-think their commercial models? Sati Sian. Several converging business conditions are forcing most major pharmaceutical companies to review their core, go-to-market strategy and how they commercialise their products. The most direct one is a decline in sales force productivity – a trend first observed a couple of years ago – precipitated because the ability to access and inform physicians has been tightened in response to the stricter controls that have been placed around them. But the larger issue is that companies are straining to sustain profitability in light of growing generic competition, slower innovation and a much less robust pipeline, tightening regulations and growing safety challenges, and cost controls imposed by a variety of new decisionmakers. Payors are becoming increasingly aggressive in controlling costs, a trend made easier by the availability of generics and the growing number of ‘me too’ drugs in the marketplace. In this environment, most companies recognise the importance of reviewing their assets in sales, marketing, market access and medical affairs and then rationalising them against a broader set of customers with different needs. Many companies began experimenting with pilots of new
commercial models a few years ago, and a select few have moved to full implementation in 2009. NGP. How do the new commercial models compare to the old? SS. The former model was designed to achieve ‘share of voice’. At its core was the simple (and at one time valid) notion that ‘more reps equal more sales’. That single model now appears fundamentally broken for a large proportion of the market. In its place are multiple models flexing to accommodate regional differences and the nature of the controls that have been put in place in each country. These models take into account new, additional stakeholders and the complex interactions needed to work successfully with each of these groups. NGP. What trends are you seeing across major markets? SS. Markets across the globe are at different stages of evolution. In advanced markets such as the US, Canada, the UK and Germany, the dynamics have already changed. The return on investment in physician-calling programmes and larger sales forces is dramatically down for a large segment of the market. In Germany, for example, new legislation gives the sick funds considerable power to negotiate directly with
pharmaceutical companies, creating both winners and losers. In the UK, the Primary Care Trusts now have power over how prescribing is done in each region. And in the US, managed care programmes and the increasing burden of healthcare are influencing treatment decisions. Consequently, there’s an urgent need for companies to make changes to their commercial models in these markets. In the middle tier, there are markets that can be described as ‘mature’, but still waiting for the market to develop to such a point that new commercial models will be mandatory. Many of the southern European countries fall into this category, plus Latin America. In the third category – what IMS has called the ‘pharmerging’ markets (China, India, Brazil, Russia, Turkey, Korea and Mexico) – growth remains high, healthcare systems and funding models are still developing, and a middle class is emerging that can fund healthcare. Here the traditional model still operates successfully. NGP. What has IMS been doing to advance a solution? SS. Manufacturers have been applying a number of generalised frameworks in their early experimentation and pilots with new commercial models. IMS, however, has made use of its local
IMS Health ED:13sept
footprint in each of the eight leading markets to study what has really been driving change and to understand the current commercial context for products across 80 therapeutic areas. We’ve segmented each therapeutic class in each country into three market categories: differentiated, commoditised and transitional. This research has shown us how the need for change varies by class and country and what investments would now make a real difference in each market. Across the board, we’ve found considerable opportunity for optimisation; many billions of dollars of promotional spending are no longer warranted or could be better deployed. Based on the evidence we collected, we also developed insights into the competencies and structures that pharmaceutical companies will need in order to respond appropriately. We then created a strategic framework for aiding companies in devising commercial models that accommodate their portfolios, the competitive landscape, and their own threshold for change. To help companies make the transition – which will in all likelihood be the most ambitious change effort the industry has ever undertaken – we’ve structured an approach to implementing change using the collective talent and knowledge of our management consultants. NGP. What framework for designing and implementing new commercial models does IMS recommend? SS. We believe, for starters, that each company should understand the real return it is getting from its go-to-market efforts and assess its broader strategic options before undertaking the ‘downstream’ work of developing a new commercial model. Once a cohesive understanding is established, work can progress along three work streams. The most near-term involves stimulating the efficiency and the effectiveness of the existing resource, and these efforts are currently having the most impact on clients’ businesses. Companies are primarily using technology to look at more efficient segmentation schemes and pushing to create more value through the existing resource pool. The second focuses on stakeholder engagement. One of the most significant factors that will drive improved performance is achieving clarity about the new stakeholders and how best to engage them. For example, this may en-
tail knowing how to use key account management structures, deciding whether resources should be regionalised so that they are closer to the plan owners, and determining what resources are needed to engage successfully with the new stakeholders. The third area is around creating additional value from the current portfolio of products. IMS is encouraging companies to think beyond the therapy itself and to wrap total treatment plans around the product set. NGP. What’s required to adopt a customercentric approach? SS. First, understand that the definition of the customer is changing. The customer used to be the physician, and so as much as 90 percent of the sales effort was physician-focused. Now ‘the customer’ includes a much broader group of stakeholders. This means that marketers face a very different set of needs that must be satisfied in the market. Companies must, therefore, have different value propositions, different organisational structures, and different skills, capabilities and assets that face the stakeholders. We’ve seen this customer-centric approach work quite well. A top ten pharmaceutical company wanted to build stronger, customised relation-
Sati Sian is Global General Manager, Commercial Effectiveness at IMS Health.
ships across its customer base, and so we helped it isolate the variables that customers appreciate in their interactions with the company. We then recommended new metrics for driving behaviour that included measures of customer value and plan influence by region, rather than share of voice. The company was able to realise an incremental $900 million annually in one country alone. NCP. Can you point to some examples of companies that have got it right? SS. Although a few businesses are in some stage of implementation, it’s too early to pronounce that they have been successful. We are, however, beginning to see strong implementations of new regional structures in which companies are moving resources from a national to a local level. In the US for example, three major players are implementing and executing regional organisations that have the autonomy to respond to local needs by re-tuning their proposition. One of our clients operating in Spain has also adopted a regional approach, aligning the management framework to the geography of the new stakeholders. The company is seeing significant improvement in the uptake of new products, as its market access teams are integrated at the local level. NGP. What does IMS bring to the challenge? SS. First, IMS provides access to the information required to understand the current landscape in each market and the ability to quantify the degree to which a company’s existing model is working. Plus, we have in-depth, local knowledge about the health outcomes that local healthcare providers are demanding. Having framed the strategic decision-making process, we can help companies select the best approach for their situation. For example, we helped a mid-tier company map out its future operating environment across 19 countries, outlining what models made the most sense in each geography and what skills, processes and assets it would need in order to succeed. We can then guide the onerous and lengthy implementation process and measure the success of the resulting programme. It’s worth noting that our recent acquisition of Skura Professional Services enhances our ability to implement customer-centric approaches with particular experience in implementing closed loop marketing.
Launch of Flector Pain Plaster sellxpert GmbH & Co KG introduces the OTC product ‘Flector Pain Plaster’ to the German market for the Swiss company IBSA. Sybille Queißer
he expanding healthcare service provider sellxpert has sucFor sellxpert, early involvement of the sales team in planning cessfully extended its product portfolio to include an area that the future field sales initiatives was extremely important. This aswas almost exclusively the responsibility of pharmaceutical sured seamless and professional communication at all levels from companies in the past. the very beginning. Its comprehensive overall concept won sellxpert the contract for Following successful conclusion of the respective project phases the launch of the pain plaster for the renowned IBSA Institut Bio– targeting, CRM, PR, marketing, medical competence sessions and chimique SA, whose registered office is in Lugano. logistics – the Flector Pain Plaster made its debut at the German Mr U. Sidjanski, IBSA Sales and Marketing Manager for SwitCongress of Orthopaedics and Trauma Surgery in Berlin from 21 - 25 zerland and the designated General Manager of IBSA Germany, October 2008. Not only did the product quality meet high approval, described the specified requirements as the key visuals, which were pre-tested by the follows: “We wanted everything from one field service, were also very well received. The source, i.e., a contact person with a good viewers associated the ankle bearing a crissSybille Queißer is the knowledge of all the players in the German cross plaster against a red background with Managing Direcotor of market. This meant knowing, on the one Swiss quality and high class workmanship. sellxpert GmbH & Co KG. Most hand, how to approach doctors and pharmaThe sellxepert ad team received intensive recently she worked freelance, cists. On the other, they had to be familiar specialist training in Switzerland and compreprior to which she was the cowith the wholesale trade and the entire lohensive training in Bruchsal prior to beginning founder of pharmexx, where gistics behind it. They also had to be capable the nationwide introduction of the Flector Pain she worked until 2002. of coordinating all our marketing initiatives Plaster on 20 October 2008. The product is in Germany.” available from pharmacies and general pracAlongside excellent know-how and a high quality sales team, titioners and also from sports doctors and orthopaedists. The Flector the decisive factor in awarding the contract was the sellxpert partPain Plaster has met a very positive reception from both doctors and ner network, which is unique in this branch. The network includes pharmacies and has received positive feedback from all sides during marketing experts, advertising/PR agencies, medical data collecthe first six months. This demonstrates that professional preparation tion specialists, CRM specialists and logistics companies. It enables on all levels, together with professional communication between the sellxpert to guarantee fast and streamlined implementation on all project team and field staff, minimises friction and provides sustainlevels – from a single source. able support for success in the market. n
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Howard Lichtman tells NGP about the revolutionary new technology that is changing the way pharma companies do business.
ince technology became centrally important to business opportant to ensure the camera is out of sight, because people behave diferations, researchers around the world have been working ferently when they’re aware they are being filmed. to streamline communications across long distances. “Telepresence firms minimize the bezels, use large rear projection Communication via digital channels began in the 1980s, and video walls, or large beam-splitters to create a more immersive experience, spread to the masses though software such as MSN so that it’s much different from the observant experience of watching a Messenger and Skype. Now the next TV set,” Lichtman says. “When you get the human faclevel has arrived, in the form of telepresence. tors of the experience right, people will actually use Howard Lichtman, President of Human Productivity it, and they’ll use it much more than they would have “As the value goes Lab, defines telepresence as: “Visual collaboration soused traditional videoconferencing. Statistics collectlutions that address the human factors of participants ed from five pharma companies show that they used up, more people will and as closely as possible attempt to replicate an in-pertraditional videoconferencing for no more than 11 join; as more people son experience.” hours per month. But when you make an investment join, the value goes According to Lichtman, the technology of telepresin these environments, people will use them 50, 60, up more – it’s a ence is so advanced it is capable of convincing users 70, 100-plus hours per month. very positive cycle” they are in the same physical space with someone who “You don’t need draconian travel restrictions, beis on the other side of the world. He describes the intelcause you still want people to travel and move the ball ligence behind the technology: “The creation of an inwhen that is the most appropriate form of communicaperson experience is accomplished by a combination of tion. However, there are many times when, if you could factors: Mirroring the environment, so it seems like all the architectural elhave the same dynamics as a personal meeting but save the cost, you ements on both sides of the world are the same, creating a feeling of being would accelerate your time-to-market advantage, the development cycle in the same physical space.” Low-latency video and audio codecs, highof a drug and the approval and testing process. quality private IP networks, life-size images, fluid video, accurate flesh “Being able to give your employees that tool is very, very important, tones and spatial acoustics are also used to maintain the illusion. It’s imand that’s why companies have been investing in this technology. They
have seen usage go up, they have seen their travel go down, they have seen time-to-market advantage, they have seen improved productivity; all of the things that videoconferencing promised but never delivered because people didn’t like it. It was unnatural, it was painful, there was delay, there was lag,” explains Lichtman.
More reliable Not only is the technology beneficial for creating a personal experience and avoiding the ‘pain’ of the old system, it is also creates a much more reliable network with the right kind of bandwidth, ensuring there are no screen remnants or fragments. Lichtman explains that it maintains a very low latency to ensure there is no delay between sites. “in the old days,” Lichtman explains, “videoconferencing was delivered over a lot of point-to-point circuits. So firms might have had a T-1 data line between a main videoconferencing room in London and an office in New York, that’s all it’s dedicated to. You couldn’t have other IP applications competing for the videoconferencing bandwidth because video traffic is delay intolerant, and if it suffers packet loss, then you lose the experience and then the technology becomes a distraction instead of a benefit,” he says. Instead of point-to-point circuits, companies are now changing the way in which they communicate, using IP videoconferencing both internally and externally. Previously, the technology was generally used for headquarters to talk to remote offices. Now companies are investing in what Lichtman describes as ‘telepresence community of interest networks’ (CoINs). “You can invest in telepresence CoINs that will not only connect you to your other locations but will connect you to the other members of the community of interest network. You’re buying connectivity into a cloud that’s going to support your own locations, but now you can call people in other companies. You can call your vendors, suppliers, joint venture partners, your law firm, your service providers, etc. What you’re seeing is the value of joining this telepresence community, and the interest of watching the networks grow,” says Lichtman. Lichtman says COINs are now beginning to take off in a big way, as the ROI becomes even greater with more companies joining the community. And the more partners a business is able to communicate, the better.
Industry specific “As more and more people join COINs, the value of being connected goes up,” Lichtman says. “As the value goes up, more people will join; as more people join, the value goes up more – it’s a very positive cycle.” “For the movie industry it means they’re building editing rooms, where you can work in the editing process in real-time between different locations. That’s what HP Halo started out as. They’re building pitch rooms where you can do storyboarding and development for the film industry. “In the banking sector, they can take subject matter experts in one centralised location and transport them to any of their branch locations. For example, you might have a relationship with a big bank in Ohio and you need a foreign letter of credit, but the foreign letter of credit specialist is in New York; now you’re able to move this expertise around the world in this very compelling and natural way.”
According to Lichtman, many pharmaceutical companies are using telepresence systems in their research and development environments. “For example, Teliris has built one for GlaxoSmithKline. The big boys view this as a strategic, competitive advantage, and they’re not that willing to share some of the trade secrets of exactly what they’re doing, but suffice to say, it’s pretty clear which companies are beginning to build applicationspecific telepresence solutions. What this means for the pharmaceutical industry is that there can be shared research and development between labs in the US and Europe.” Lichtman compares the development of telepresence to that of the telephone and fax machine. As more people began to use them, they became normalised into business operations, and thetechnology continued to improve. Telepresence communications currently exist mainly on the executive floors of Fortune 500 companies, with only executives seeing, using and understanding this new process of communication. Lichtman advises that the experience of telepresence cannot be understood without being experienced.
Howard S. Lichtman is President of the Ashburn, VA-based Human Productivity Lab, the world's leading consultancy on telepresence, telepresence managed services, and telepresence inter-networking.
“To understand the power of it, you have to go and sit in one of these environments, and say, ‘This feels like I’m sitting in the same room with a guy who is half way around the world. We’re having a normal conversation, it’s not painful, we can be very effective in it, we can share data. I can show him my PowerPoint slides. I can show him this Excel spreadsheet and we can work in it simultaneously.’” One of the main advantages of telepresence is the ability it provides to avoid the need for travel when holding meetings. Lichtman gives the following example: “When I was Vice President of Business Development at TeleSuite, which was one of the pioneers in the industry, GSK was one of our customers. At the time they were making around 700 flights a month between between London and Philadelphia. They had a corporate policy where business class travel was available for flights over five hours in length so it was very expensive proposition. They were able to put in telepresence solutions and cut that travel in half.
“The other advantage is that if you have a problem you can immediately huddle the team. You can immediately get people around the world together in a natural format where you can be productive, where that might not have even been possible with travel. You can also hook up testing informatics and other R&D tools, for example, to look at a microscope slide remotely.
High adoption The US currently boasts the highest rate of telepresence adoption, but Lichtman says the rest of the world is not far behind. “Europe is number two by far, and it’s spreading rapidly to Asia; the Pacific Rim is now starting to get more popular. Telepresence was essentially a homegrown technology in the US, and the major companies in the space are American companies – Cisco, HP, Polycom, Teliris – and so the sales forces and corporate marketing groups are there, but it’s definitely a global phenomenon. I’ve seen stories recently about firms in South Africa, Dubai, Israel and Russia that have deployed it.” Although telepresence offers many advantages over traditional teleconferencing, there are still a few familiar downsides. You can’t shake hands with the person you are meeting, for example. You can’t go out and have a drink at the pub, or even hand them your business card. “And because it is an environment where the camera is on you, that can be good and bad,” Lichtman says. “It’s good in the sense that people pay more attention. People will actively listen and participate more versus checking their Blackberrys. The flipside is that they may be less candid because of the potential for the meeting to be recorded.” Lichtman says the technology will only get more realistic as the technology develops. “There’s an amazing jump in realism between the average telepresence setup and traditional videoconferencing, which I call the ‘plastic camera on the TV set on the dessert cart’. The experience is only going to get more real. It will also get cheaper; as IP networks develop around the world and there are submarine cables and fibre optics going to more countries. The cost of delivery and the cost of the network and the managed services that support it are more expensive than the endpoints. It’s those costs that will go down.” Lichtman also predicts that utility will go up as more telepresence CoINs join together and have network-to-network interconnects between them, and as more companies that have proprietary codecs and calling plans make their systems more interoperable. “We will get to the point where virtually every major company in the world will have a room, and you will be able to walk into the room and call any other company in the world, and sit down and have a real meeting, and it will be like you’re in the same physical space. You’ll be able to share information much more easily, and that is going to supercharge the flow of knowledge and the speed of innovation. “Good things will come of this, in the same way that good things came out of the internet. Good drugs will be developed faster and bad drugs will be discovered sooner. The quality and the amount of information that is being exchanged will go up dramatically, and that will be overwhelmingly positive.”
Biotech investment in the Lone Star state The American state of Texas has a reputation for doing everything bigger and better, which is good news for the state when it comes to medical innovation.
oney has been ﬂowing into innovative cancer research programs and biotechs in Texas over the past few years. Its residents have already approved Proposition 15, a $3 billion (€2.25 billion) bond program, which will be ploughed into ﬁnding a cure through research and prevention, clinical trials and the construction of laboratory facilities throughout the state. Each year, 37,000 Texans die from cancer, and state ﬁgures show the disease now costs Texans about $30 billion (€22 billion) a year in direct and indirect costs. The state is one of the top ﬁ ve regions in the US attracting biotech companies. In fact, central Texas-based life science outﬁts have attracted about $500 million (€373 million) in venture capital over the past year, while the amount of venture capital invested in bioscience over the last six years came to $1.34 billion (€1
STATE STATS Population: 22,859,968 Colorado River, Austin at night
Governor: Rick Perry Number of counties: 254
70 percent of the population of Texas lives within 200 miles of Austin Texas possesses three of the top 10 most populous cities in the US – Houston, Dallas and San Antonio Texas has 215 cities with a population of 10,000 or more Texas has 90 mountains a mile or more high, with Guadalupe Peak in West Texas at 8751 feet being the tallest Almost 10 percent of Texas is covered by forest, which includes four national and five state forests
billion), according to the Biotechnology Industry Organization. MD Anderson Cancer Centre in Houston leads the way in the state and is Texas’s only dedicated cancer hospital. Its mission statement is clear and simple – to eliminate cancer. Some notable achievements of the hospital include designing a rapid chromosome ‘painting’ technique to pinpoint gene abnormalities in chromosomes for use in diagnosis and treatment monitoring of cancer and genetic diseases; and documenting a direct molecular link between cigarettes and lung cancer, based on research studies that showed a carcinogen in tobacco
smoke binds to key mutagenic sites in the p53 gene. The centre also developed a simpliﬁed BCR-ABL diagnostic test that uses a tiny amount of blood to detect and monitor chronic myelogenous leukemia and some acute leukemias, thus reducing the need for multiple bone marrow aspirations. North Texas will soon have its own cancer hospital following the news that Baylor University Medical Center is set to open its own facility. The centre will be committed to advanced cancer treatments. It will allow for a more comprehensive personalised medicine program, including areas of research such as targeted therapy. The new 450,000-square-foot centre is
CITY FOCUS Austin (pop. 743,000) Texas’s very own San Francisco, Austin is a surprisingly liberal city in a state well known for its conservatism. Nicknamed The Live Music Capital of the World, the city has a thriving music scene with more musicians per capita than any other North American city (apart from Nashville).
San Antonio (pop. 1,328,984) San Antonio is the second-largest city in Texas and 7th largest in the US. Every year 26 million tourists come to the city to visit such attractions as SeaWorld and the Six Flags Fiesta Texas theme park. The jewel of the city is the River Walk, with its shops, bars and restaurants, which meanders through the downtown area.
The River Walk
Dallas (pop. 1,052,400) Dallas can be found on the northeastern plains of Texas and covers an area of 342.5 square miles. The city is spending $13 billion ( 9.7 billion) on urban developments. The frozen margarita and the chicken fajita were invented in Dallas.
Houston (pop. 2,000,000)
Saturn V at Johnson Space Center
America’s fourth largest city was founded on August 30, 1836 by brothers Augustus Chapman Allen and John Kirby Allen on land near the banks of Buffalo Bayou. NASA’s Johnson Space Center is located in Houston. The city’s Texas Medical Center is home to more than 42 nonprofit institutions and is the largest medical center in the world.
VC FOR MEDICAL TECHNOLOGY Austin Ventures, a $3 billion (€2.25 billion) venture capital firm based in Austin, introduced Santé Ventures, a venture capital firm with healthcare investment experience, last year. Santé closed its first investment fund in December 2007, with $130 million (€97 million) in capital committed primarily to seed and early-stage companies in medical technologies and healthcare services. Emergent Technologies Inc., also based in Austin, has funded scientists at the University of Texas, Dallas and UT Southwestern with $50,000 (€37,000) to develop a device for removing kidney stones.
scheduled to open in 2011, and construction of the dedicated cancer hospital will begin in 2010, with completion scheduled for 2013. UT Southwestern Medical Center is spurring innovations in patient care and aiding economic growth in the area by establishing a new biotech park, called BioCenter, at Southwestern Medical District, to develop university technologies and attract existing biotech companies to North Texas. The 13-acre site – purchased from the city of Dallas for $4.1 million (€3 million) – is being developed in stages, with the ﬁrst of four buildings expected to be ready for occupancy this summer. With ultimate plans for up to 500,000 square feet of laboratory, ofﬁce and research space, BioCenter will serve the full spectrum of the biotechnology and biodevice industry, providing a nurturing environment for early-stage and mature companies alike. The purpose of the site is not only to develop UT Southwestern technologies to the point of commercialisation, but also to provide commercial space for existing or start-up life-science companies that want to locate close to the university and its many resources.
On the shelf NGP takes a look at the recent crop of pharmaceutical and life sciences books.
Our Daily Meds
How the Pharmaceutical Companies Transformed Themselves into Slick Marketing Machines and Hooked the Nation on Prescription Drugs, By Melody Peterson Former New York Times reporter Petersen takes an in-depth look at questionable practices within the pharmaceutical industry, and suggests reforms aimed at making big drug companies more accountable. Covers everything from copycat drugs and the environmental impact of drug residues in drinking water to marketing practices aimed at doctors. NGP says: A thorough inside look at controversial aspects of the pharmaceutical industry not usually accessible to the general public. Read it and decide for yourself.
The Generic Challenge
Understanding Patents, FDA & Pharmaceutical Life-Cycle Management By Martin A. Voet Explains the role of patents, FDA regulations for generic drugs and the Hatch Waxman Act on conventional and biological drug product development, and how directed innovation can result in enhanced care for patients while extending the commercial lives of the drugs. Of interest to pharmaceutical executives and managers; regulatory, legal, business development, R&D and strategic marketing professionals; and anyone with an interest in the future of the leading American pharmaceutical and biotechnology industries and the high value jobs they provide. NGP says: Concise, easy to read, and helps to simplify the complex subject of pharmaceutical patent regulations.
Business Development for the Biotechnology and Pharmaceutical Industry By Martin Austin
Business development in the biotechnology and pharmaceutical industries accounts for over $5 billion in licensing deal value per year. The scope of the job can be huge, and it can require a broad range of knowledge and skills from practitioners. Austinâ€™s book is based on the international training program he delivers to pharmaceutical executives. NGP says: A practical guide to developing a career in business development in the pharmaceutical industry. A must read for anyone thinking of entering the ďŹ eld.
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Janez Potocnik The European Commissioner for Science and Research
A Slovenian politician and economist, Janez Potocnik is currently serving as the European Commissioner for Science and Research. Before joining the commission members in 2004, Potocnik was Assistant Professor at the University of Ljubljana, where he lectured on statistics and economics. Combining R&D development with number crunching, Potocnik has expanded the EU’s R&D intensity, investing three percent of the commission’s GDP in R&D. He views research and development as essential components of Europe’s economic and social future, and so has made the improvement of conditions for research within the region as his primary aim. His belief is that generating knowledge will encourage technological advancements to help bring about the achievements of such policies. By providing scientific support to policy-making, decisions are made based upon sound data. Underlying his aim of expanding R&D is a commitment to green science. Since taking the position, Potocnik has developed various initiatives to tackle the problem of dwindling science careers, such as Researchers in Europe 2005, which organised various events to bring scientists and the public together. Also, the Code of Conduct and Charter for Recruitment initiatives have been launched in an attempt to boost interest in the industry. Potocnik also developed the Innovative Medicines Initiative (IMI), a new industry research initiative, to further the expansion of new pharmaceutical medicines in Europe. The Commissioner granted the project a huge €2 billion budget until 2013, saying, “IMI is about pooling public and private efforts so that Europe can be a big player.” As an avid campaigner against animal testing, Potocnik has criticised both the pharmaceutical industry and academia for failing to commit sufficient resources to finding alternatives, and has called on companies to share information gathered from research and testing. The stage has been set for an EU-wide ban on animal testing of cosmetics in 2009. n
CATALOGUE PAGE NGPEU:apr09 08/04/2009 14:16 Page 157
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158 May 4-7, 2009 The 8th Pharmaceutical Powder X-ray Diffraction Symposium Glasgow, Scotland International Centre for Diffraction Data Tel: +44 610 325 9814 Email: firstname.lastname@example.org
International Events A roundup of upcoming pharmaceutical conferences and workshops around the world.
May 5, 2009 Supporting Pharmacy Managers in the Future London, England Royal Pharmaceutical Society of Great Britain Tel: +44 207 572 2640 Email: email@example.com
May 11-12, 2009 Aseptic Processing in the Manufacture of Biotech and Pharmaceutical Products Berlin, Germany The Center for Professional Innovation and Education Email: firstname.lastname@example.org
September 15-17, 2009 Next Generation Pharmaceutical Summit Bremen, Germany Tel: +44 212 920 8181
June 11, 2009 Biosimilars and Analytical Challenges London, England Royal Pharmaceutical Society of Great Britain Tel: +44 207 572 2640 Email: email@example.com
June 1-3, 2009 Biotech China
May 28-29, 2009 3rd Asian New Drug Development Workshop
Shanghai, China Deutsche Messe AG Tel: +49 511 893 2136 Email: Nicole.Schlegelmilch@messe.de
Tokyo, Japan Drug Information Association Tel: +81 35 833 8444 Email: firstname.lastname@example.org
May 1, 2009 Automate Your Validation Process Montreal QC, Canada Compliance Associates Tel: +1 905 738 3773 Email: email@example.com
May 14-15, 2009 RNAi World Congress Boston MA, United States Select Biosciences Tel: +44 1787 315110 Email: firstname.lastname@example.org
May 5-6, 2009 Early Drug Development: Navigating the Treacherous Rapids Silver Spring MD, United States Drug Information Association Tel: +1 215 442 6100 Email: email@example.com
August 20-21, 2009 2nd Annual Pharmaceutical Law Conference Sydney, Australia IIR Conferences Tel: +61 2 9080 4009 Email: firstname.lastname@example.org
COMMENT BACK:apr09 08/04/2009 15:20 Page 160
COMMENT Business in the Year of the Ox
Why the recent mergers and acquisitions in the pharmaceutical industry are missed opportunities for commercial model innovation. By John Singer
ccording to the Chinese zodiac, 2009 is the Year of the Ox. The sign of prosperity through fortitude, the Chinese say the Ox works methodically, a born leader possessing an innate ability to achieve great things. A good time then, for natural leaders to step forward and make big, creative moves on behalf of their companies. Despite the size of the recent Big Three acquisitions in the pharmaceutical industry, however, these deals feel more routine than imaginative, more tactical than strategic. Pfizer/Wyeth, Merck/Schering-Plough, and Roche/Genentech look more like linear moves at the operational level, and it’s dif-
“The future of the industry lies in transitioning to a model based around shared marketspace” ficult to see where new strategic results will come from. It’s great to be number one in a market space, as Pfizer is now envisioning itself to be, but aspiration is not strategy – General Motors is the ‘number one’ car company in the world. The centre of gravity – the focal point for overall competitive capability – for these acquisitions is still squarely sitting on a commercial model whose success depends on promoting the features and benefits of individual drug brands in a marketplace that sees little value in, and does not trust, pharmaceutical promotion. Despite spending of between $30-$60 billion (€20-€45 billion) a year on promotion in the United States, sales of prescription drugs in that country rose just 1.3
percent in 2008, slowing for the second straight year and continuing a downward trend in developed markets throughout the world. Issues around pharmaceutical sales force and market access or now so widely known they are cliché.
Strategy Like most industries, governments and institutions, pharmaceutical companies face an adaptive challenge to a changed context for strategy. The whole framework for getting new medicines approved is evolving, the amount of revenue generated by new drugs is dropping, and atomising ‘customers’ are awash in information and competing data claims. The marketplace is moving away from accepting laboratory measurements as evidence of real clinical benefit, focusing instead on improving health outcomes. There is a growing reality that many people present with complex symptoms and multiple illnesses, driving the demand for holistic solutions that will in turn change human resource, financing, service delivery, information technology and legal policy. In another sign of strategy mismatch between the pharmaceutical industry and the marketplace, the World Health Organisation is now undertaking a fundamental shift to primary healthcare, while several major drug com-
panies are abandoning the primary care market entirely. The future of the pharmaceutical industry is broader than pharmaceuticals; it also lies in servicing health. More specifically, it lies in transitioning from an industrialera view of a business focused on manufacturing and promoting physical products (i.e., drug brands), to a model based on organising industry environments around shared marketspace. This is about forging whole new kinds of business platforms to create new markets: Merck linking with General Mills to invent a new standard of care in diabetes; Roche connecting with Apple to design a unique aggregation of health content in breast cancer. The winners in this new economy will know how to work with all this interconnectivity, the chaotic and the nonlinear. They will know how to move horizontally and work collaboratively, like P&G and Google, who recently exchanged employees in an effort to spark marketing innovation. There is opportunity in this Year of the Ox to re-orient the pharmaceutical industry, as Pfizer claims in its news release announcing the Wyeth acquisition, and these new even-bigger companies have the resources and positioning to do it. But it will take a different kind of strategy and action, an evolutionary leap to adapt to a new world where there are no easy answers, no proven routines, and no straight lines. This is the strategic challenge for the global pharmaceutical industry. n John Singer is the founder of Blue Spoon Consulting, a strategy and marketing consultancy that helps clients innovate their tactics, differentiate their strategies and create at a system level.
Turbulence AHEAD Novartis’ Sammy Rashed talks to NGP about ensuring supply chain security in the stormy weather of the current financial climate.
s procurement continues to move up the corporate agenda, the switch to lean processes has put pressure on sourcing departments across the pharmaceutical industry. Sammy Rashed, Head of Global Sourcing at Novartis, explains that security of supply is a priority. “When looking at the supply chain that goes into making our products, there’s a certain responsibility we have to ensure the continuity of supply. That has to do with ensuring the financial health of our suppliers, certainly given that the current situation is both a threat and an opportunity. For example, if suppliers have a high debt level, or a lot of sitting inventory, if they’re exposed with idle capacity, if their prices are linked to very highly fluctuating commodity prices which they’ve hedged, this is information that we must be aware of so we can adjust our strategy accordingly.
Turbulence ahead_Rashed.indd 64