HEADWINDS & TAILWINDS

“I think in the next 20 years, we are going to see an absolute boom in the number of small med techs companies,” says Prof Chas Bountra.

This article is based on a hybrid roundtable by Synergia Foundation on “Headwinds and Tailwinds Round Pharmaceutical Innovation and The Future of The Industry,” in which Prof Chas Bountra, Pro Vice Chancellor for Innovation at the University of Oxford, was the keynote speaker

The pharmaceutical industry has undergone a massive change in the last two decades, which will be much greater in scope and extent in the next decade. In fact, the industry will look nothing like it does today.

For one, the industry is going much more global. As per the CEO of Novartis, the pharmaceutical industry is going to be concentrated around three hubs-Boston (Vertex, Ironwood, Charles River, Boston Pharmaceuticals, Sarepta, Paratek, Acceleron, Agios etc.), Basel, Switzerland (Hoffmann-La Roche, Novartis, Alcon, Bayer, Lonza Group, Abbott, Galenica, Actelion, etc.), and Shanghai (Jiangsu Hengrui, BeiGene, Chongqing Zhifei, Yunnan Baiyao, Huadong, CSPC, Shanghai Fosun, Jiangsu Hansoh etc.)

However, the growth is such that it is bound to spread to other cities and hubs. In the U.S. alone, the spread stretches onto the West Coast, including San Diego and San Francisco.

Even Texas in the South is witnessing heavy investments. Similarly, globally we see the rise of Singapore and the massive investments from the Saudi royal family as it looks to diversify from oil to health research and oil-rich Qatar is following suit. In Brazil also, the pharma industry is attracting heavy investments. Of course, within the industry, a certain amount of downsizing would also be expected, with some regions benefitting at the cost of others. This is exemplified by global leaders like GSK moving from Shanghai to Japan. However, the industry’s centre of gravity continues to reside in the U.S.

A paradigm shift is likely to take place in the R&D structure of the industry. The emphasis of pharma research will change from large, expensive research hubs towards more virtual and much smaller, nimble research bases spread around the world where the industry needs them and where the expertise resides.

Within all these churnings, India has ample opportunity to seek a role in the global pharma market.

CHANGING THE FACE OF PHARMA R&D

Big Pharma like Roche and Novartis have spent billions creating their research hubs in the past. A prime example is Cambridge, Massachusetts-based Kendall Square, known for its cluster of tech companies and Massachusetts Institute of Technology (MIT) buildings, from the Gehry-designed Stata Centre to the neoclassical Great Dome on which pharmaceutical companies have sunk an absolute fortune. The new As- traZeneca building in Cambridge, UK, the GSK building in Stevenage and the Pfizer building in Sandwich, Kent, all cost over a billion Pounds.

A paradigm shift is likely to take place in the R&D structure of the industry. The emphasis of pharma research will change from large, expensive research hubs towards more virtual and much smaller, nimble research bases spread around the world where the industry needs them and where the expertise resides.

In the 1980s, there was a sense that the industry could do everything in-house- all the research, toxicology, and clinical development without seeking external academic collaboration. This was perhaps more of a PR ploy to show to the public, but the attitude has changed since then. The industry is acknowledging the fact that no matter how much money they put into research, it’s a tiny, tiny fraction of the research that’s happening across the planet. And so somehow, they need to build relationships with people outside, bring those ideas in, create company assets, etc. So, this is where virtual relationships will come into play.

Pharma research will not be confined to medicinal chemistry anymore. Twenty years ago, the focus was biologics and antibodies. Now there will be a revolution in terms of cell therapy, gene therapy, vaccines, RNA therapies, etc.

In Oxford, Adrian Hill has just released, with the help of colleagues in India, the new malaria vaccine, which has been approved in Ghana, and more countries are likely to follow. This one vaccine is expected to save more lives than the COVID vaccine did. And the malaria vaccine is an offshoot of all the experience gained in creating the COVID vaccine by Oxford University.

Another area where research is being concentrated is how to arrive at early diagnosis of diseases like cancer which currently are diagnosed when it is too late. Similarly, with Alzheimer’s disease, the patient has already lost big chunks of the brain by the time a correct diagnosis is made. Now scientists are working on technologies that can diagnose diseases at the earliest inception stage by measuring various parameters of blood and other body fluids.

A company called SomaLogic has a pioneering plat- form that can measure approximately 7,000 proteins, more than twice as many as other proteomic technology platforms and is quickly moving toward 10,000 proteins. That’s half of the approximately 20,000 proteins in the human body. So, you’re getting several thousand readers in a tiny blood sample!

Another area where immense progress is being made is imaging technologies- you can image the brain, and almost all organs, detect inflammation, water content, iron content in the liver etc. The cost is also dramatically decreasing in imaging techniques, making them more accessible.

Wearable devices like smartwatches will ensure that body parameters are constantly monitored and directly transmitted to databases accessible to your physician.

Now we can measure 1000s of things in a patient longitudinally, continuously, non-invasively, and cheaply. So, diagnosis, earlier diagnosis, and therefore disease prevention will become more of a reality.

In the past two decades, many pharmaceutical companies have pulled out of Central Nervous System (CNS) and neurological and psychiatric research because it was too difficult, expensive, and unpredictable. Animal models being used were useless for cures meant for human beings.

But now, there is optimism in this field, and in the next few decades, there will be an explosion in science and new drugs for neurodegenerative and mental health conditions. There is virtually a pandemic of mental health raging globally, with over 20 per cent of adults in Europe having some mental health condition during their lifetime.

New Skill Sets Needed

In the old days, the industry needed many medicinal chemists, pharmacologists, toxicologists, regulatory experts, people who design clinical trials, etc.

But the future of healthcare is radically changing, and today, the demand is for computational and data scientists, engineers, material scientists, etc., with many different skill sets because there’s no way that any company can concentrate all that resource and expertise in-

I think in the next 20 years, we are going to see an absolute boom in the number of small companies, med techs companies. Big pharma companies will form partnerships with this host of smaller companies and share the research load with them. We are going to see a revolution in terms of cell therapy, gene therapy, vaccines, RNA therapies. Today we do not have a single trillion-dollar pharma company, but with the way pharma is going, we will have such big pharma companies. In fact, India should aspire to create the first such company as it has all the building blocks which just need to come together.”

Prof Chas Bountra

Pro Vice Chancellor for Innovation, Oxford University, UK.

ternally. The University of Oxford is a typical example of the changing face of pharma research. It has experts from all the related areas, and in areas like toxicology or regulatory, where they face a gap, they seek external collaboration.

However, Oxford University leads the way in emerging fields like AI or machine learning, data science, computational science, material science. It can offer its expertise, virtually or otherwise, with like-minded topnotch research hubs anywhere in the world.

The field of research itself is evolving with students in top universities like Oxford refusing traditional academic degrees in favour of new combinations like PPE (Politics, Philosophy, Economics) born out of such belief that a combination study of the great modern works of economic, social, political and philosophical thought would have a transformative effect on students’ intellectual lives, and thereby on society at large.

Armed with such degrees, these students will go on to occupy the top political echelons in their native countries with a much better and more comprehensive understanding of how to find a balance between the social, economic and political pulls of their nations.

Students are no longer interested in traditional 9 to 5 jobs in traditional multinational companies. They want to create their own companies, become market leaders, learn to innovate, and be entrepreneurs.

They want to be exposed to writing business plans for start-ups, and this is bound to generate a boom with thousands of smaller, more agile companies being created. And these companies will have very deep, unique expertise in certain technologies, targets, diseases, ideas, or whatever.

And big companies are going to have to cherry-pick from these start-ups and acquire or collaborate with them. Big pharma companies are going to have to form lots more partnerships.

The research functions in these pharma companies will correspondingly decrease in size as project management, business development functions, academic collaborations, and the acquisition of small companies grow exponentially. With research bases shrinking in size, acquiring ideas and expertise externally will increase, which will result in lots more partnerships.

The Future Beckons

What is going to cause an absolute revolution in this industry is AI and machine learning. And this is where a technology hub like Bangalore and Hyderabad has a real opportunity if they are ready to seize it.

In the U.S., there are companies on the doorstep of Stanford University worth more than a trillion dollars each- Apple, Microsoft, Amazon, and Tesla. These are all technology and data companies that have been created in the last 25 years. In the pharma field, the most valuable company is J&J, which is around $ 440 billion and has existed for over a century! But the time is not far when somebody, some genius, will create a digital AI data-driven healthcare company that will become the first trillion-dollar pharma giant. It could happen in Bangalore!

AI machine learning will make things very exciting, helping us identify better targets for drug discovery and biomarker signatures that can be used for clinical trials and identify new drug combinations for treating complex diseases.

This technology will enable cross-usage of existing drugs because there are many drugs in use that, unknown to us, would work a lot better in other conditions too.

The biggest challenge to new technology is the high cost of its evolution- new therapies, new modalities, and new machines do not come cheap. Across the planet, governments cannot afford the escalating health care costs with ageing populations and the spiralling cost of modern treatments.

Even in developed countries, a large population cannot afford the escalating healthcare costs- emerging economies and low-income countries fare even worse.

A great deal of pharmaceutical research is being paid for by the private sector and pharmaceutical companies, apart from governments and research councils that have put a lot of money into charities. In recent years, venture capitalists are also stepping in. In the next few years, we will see much more philanthropic funding.

As life span increases, lifestyle diseases are also rising- China has nearly half a billion people who are pre-diabetic! Another area of concern is antimicrobial resistance. More than a million people a year die due to resistance to existing antibiotics.

And that number will continue to grow unless we develop a new generation of antibiotics. Big pharma is not investing in these because drugs are cheap, and the profit margins are very low.

There are nearly 7000 Rare Diseases, and it can take five to eight years for a child to get diagnosed; 30 per cent of those kids don’t reach the age of five, and 95 per cent of those individuals have no approved treatments. And the pharmaceutical industry is not working on it.

The climate emergency will worsen the magnitude because these changes are irreversible. Significant chunks of this planet will become uninhabitable, forcing massive migrations across the planet.

In the next couple of decades, the fastest population growth will be in Africa, and that’s where they’ve got a lot of young people. And in a couple of decades, there won’t be a million people trying to come into Europe, it’ll likely be 30 to 40 million people trying to come into Europe, the scale will just be much, much different.

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As a career civil servant who has worked in many fields like social welfare, disaster management etc., health has been the most challenging sector. This is primarily because it’s the complexity of the sector and too many moving parts to get a handle on things.

COVID was a major event in the recent past, and health became centre stage in this because till now, the funding for health has been fairly limited. Thanks to the surge in government funding during the COVID period, the healthcare infrastructure was rapidly updated in Karnataka. In March 2020, there were around 500 oxygenated beds in Karnataka and over a period of six months, these had gone up to 5000. Of course, the challenge remains taking health care into rural and remote corners of the state.

The whole of the government approach that came up during the pandemic helped to improve the healthcare infrastructure. The biggest challenge in the healthcare sector is the scale of operation; in

Karnataka itself, there are over 10,000 institutions and over 100000 people involved in the whole setup. While the government meets 30 per cent of the health care requirement, the private industry has a huge presence in the sector, making the regulatory process that much more challenging.

Inequality remains a nagging issue. In Bangalore, a city known for its innovation and change, around us in the state, close to 5000 children die, as the infant mortality rate is around 19. How do we use technology and innovation to break this cycle of inequality?

The lack of human resources is a major constraint in the health sector. What can make a difference is the availability of doctors, especially in the rural area. Changes have been brought about in the regulatory field to correct this situation, as the number of MBBS and MD degree holders decreased drastically since 2019.

The government is working on it, but it will still take eight to nine years for human resources to be made available in rural areas.

SHRI ANIL KUMAR, IAS

Principal Secretary, Department of Health & Welfare , Govt of Karnataka.

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The U.S. FDA, a major driver of thought and drug discovery, has said that animal testing is no longer required for drug discovery, which is a tectonic shift.

The Wyss Institute at MIT has leveraged recent insights into how Nature builds, controls and manufactures to develop new engineering innovations - a new field of research called Biologically Inspired Engineering. By emulating biological principles of self-assembly, organization and regulation, they are developing disruptive technology solutions for healthcare, energy, architecture, robotics, and manufacturing.

One of the cutting-edge areas they are researching is therapeutic discovery and diagnostics development enabled by microsystems engineering, molecular engineering, computational design, and organ-on-a-chip in vitro human experimentation technology. In simple terms, it implies that in the near future, all drug testing will be done on human organoids or digital twins.

Now trials can be done at sufficient throughput, enabling genetic diversity to be replicated and incorporated early in the preclinical trial.

Since the beginning of the 20th century, human life span has dramatically increased thanks to increased knowledge of public sanitation and the discovery of antibiotics. Another disruptor is taking place at the major pharmaceutical companies in the Bay Area trilogy. Diseases manifest only much later in life, and that is what is being broken into by research. There is a fundamental process of ageing that is underlying human physiology that it manifests in different diseases. So the disruptor is that major companies are working on increasing lifespan. Institute for Stem Cell Science and Regenerative Medicine InStem), for exam ple, builds skeletal muscle organoids in India, which will soon start testing for small molecules in human muscle cells to kill rare diseases.

DR. ARVIND RAMANATHAN

Associate Professor at Institute for Stem Cell Science and Regenerative Medicine ,National Center for Biological studies(NCBS)