NGP US 14

COVER NGP14v5:oct08 23/10/2008 13:55 Page 1

www.ngpharma.com • Q4 2008

BONE BUILDER Amgen’s SEAN HARPER shakes up osteoporosis research PAGE 36

GOOD REPUTATION What companies need to do to restore public trust PAGE 42

EYES ON THE PRIZE How KAREN GOTTING-SMITH keeps AstraZeneca fighting fit PAGE 74

STRONG

MEDICINE Why MONCEF SLAOUI is radically restructuring GlaxoSmithKline’s R&D PAGE 30

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FROM THE EDITOR

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Quantum leap What the pharmaceutical industry can learn from 007

I

“It’s like fixing the engine of a jumbo jet at 40,000 feet and making sure it doesn’t crash.”

Moncef Slaoui, Chairman of R&D, GlaxoSmithKline (page 30)

“We will find major breakthroughs against grievous illnesses, and some of those will have unequivocal value.”

n the latest James Bond movie, Quantum of Solace, everyone’s favorite secret agent is up to his old tricks, meeting up with an elusive, beautiful woman and battling a shadowy criminal mastermind determined to take over one of the world’s precious resources – in this case South America’s water supply.

During the course of his adventures Bond, as usual, makes use of his seemingly endless reserve of personal resources: self-reliance, intelligence, nimbleness, the ability to stay ahead of his adversaries.

The life of a fictional spy may seem a world away from the pharmaceutical industry, but there are lessons we can learn from Bond. While the recent meltdown in the financial markets may not be affecting the industry directly, there are other challenges on the horizon: the ever-looming threat of patent expiries, the continued question of where the new blockbusters are going to come from, the increasingly stringent regulatory requirements set by goverment agencies.

How then, to get the better of these challenges? By being, like Bond, quick on our feet, by learning to trust our instincts, by doing whatever it takes to remain in front of the competition. This will involve a spot of lateral thinking, looking for new sources of ideas, and exploring areas of drug development that don’t have obvious immediate promise, but will yield a long-term reward.

GSK is one of those leading the way, with the restructuring of its R&D organization (see this issue’s cover story). In early October, the company announced it would shed 850 research jobs with the aim of improving efficiency and productivity, and has also reorganized its R&D into smaller, more entrepreneurial units.

Other companies are taking a different tack. Merck & Co., Eli Lilly and Pfizer got together to form a joint company – Enlight Biosciences – to fund and develop pre-competitive technologies that will help speed drug development. The partner companies will have the option of investing in each individual project, and will then have access to the technologies before they are available on the open market.

Whether it’s restructuring or partnering – or perhaps taking advantage of the current financial turmoil by using a solid cash base to make new acquisitions – the pharmaceutical industry has proven itself to be capable of weathering difficult times and, when necessary, taking big leaps forward. Perhaps it’s James Bond who can learn something from us.

Sean Harper, SVP of Global Development, Amgen (page 36)

“We’ll see payers, insurers and governments finding ways to make the physicians and patients economic stakeholders.”

Bill Anderson, SVP, Immunology Sales and Marketing, Genentech (page 108)

Marie Shields Editor

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CONTENTS

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LEAD FEATURES Q4 2008 www.ngpharma.com

36 Breaking new ground Sean Harper tells us why there could soon be fresh hope for people with osteoporosis

42 Hitting the target PwC’s Todd Evans takes aim at the industry’s tarnished reputation

74 Eyes on the prize How Karen Gotting-Smith has AstraZeneca knocking out the competition

30

129

Cut back and shake up Moncef Slaoui has a true passion for his work.

Now he’s using that energy to make radical changes to GlaxoSmithKline’s R&D Playing it safe in drug development

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CONTENTS

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DRUG DISCOVERY CLINICAL RESEARCH

57

GOLD SPONSOR

48 Getting in on the ground floor How three big pharma companies got together to bring new technologies to life

57 All in the mind David Michelson explains the latest advances in schizophrenia treatment

65 Quality control Ji Zhang of sanofi-aventis on ensuring safety in clinical research

73 It’s all in the genes Eli Lilly’s Jack Bloom talks pharmacogenomics

78 Reaching the inflection point

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Commercial strategies for a changing industry

84 Going global Diane Jorkasky on how geographically diverse clinical research units are transforming phase I trials

88 Lessons learned Larry Blankstein understands the challenges of global studies

EXECUTIVE INTERVIEW 54 Alain Meller, Agilent Technologies 63 Staf C. Van Cauter, Bioscan Inc 70 Mike Harrington, Waters Corporation 105 Stephen Fox, IMS Health 114 Kelly Martin, Aerotek 118 Bob Moore, GE Healthcare 122 Willem van Leeuwen, QMR Technology 125 Ingo Juraske, Hewlett Packard 130 Richard Beeny, LifeScience Logistics

65 HEAD TO HEAD 60 Live cell imaging, with Cathy Owen of Nanopoint and Laurence Pelletier of Mount Sinai Hospital 97 Knowing your market, with Patty Klingbiel of Connell + Associates and Geoff Arbuckle of TARP

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CONTENTS

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MARKETING, IT MANUFACTURING

INDUSTRY INSIGHT

120 Innovate to integrate Getting electronic access to critical information

69 Dave Champagne, Thermo Fisher Scientific 137 Thorsten Schnatz, KBA-Metronic

S I LV E R S P O N S O R

129 Playing it safe Amrit Ray discusses the changing drug safety landscape

133 Early warnings 90 Seizing China’s pharma opportunity

William Kluwe outlines the increasing focus on preclinical safety

How to take advantage of this huge potential market

“A successful corporate brand springs from some natural attributes of that corporation” Bill Anderson, Genentech P108

IN THE BACK

100 Hunting season 138 Comment Beyond blockbusters: investment-worthy specialized therapies

Corporate headhunters track down their prey

108 Growing your brand Genentech achieves successful brand architecture

140 Survey The fastest growing biotechnology companies

ASK THE EXPERT 83 Paul-André de Lame, Anabase International Corp.

87 Tosja K. Zywietz, Cardinal Health Research Services 107 Eric Johnson, InsiteResearch 113 Jon Jordan, South Twin Executive Search 117 Indigenus/TheCementBloc 127 Werner Bennek, Bürkert

60 Cathy Owen, Nanopoint

142 Travel Biotech investment in the Lone Star State 144 Final word A cure for the revenue challenge, by Shailendra Poddar

142

63 Staf C. Van Cauter, Bioscan

70 Mike Harrington, Waters

88 Larry Blankstein

CREDITS 2:oct08 28/10/2008 14:29 Page 14

4-6 April 2009 The Fairmont Mission Inn Sonoma, California Th soonere regis you more y ter, the ou sav e!

S

Chairman/Publisher SPENCER GREEN CEO/Publisher JAMES CRAVEN Director of Projects ADAM BURNS Editorial Director HARLAN DAVIS

ee www.n gpsum for deta mit.com ils

Editor MARIE SHIELDS Managing Editor BEN THOMPSON Associate Editor FRANCES DAVIES Deputy Editors NATALIE BRANDWEINER, MATTHEW BUTTELL, REBECCA GOOZEE, DIANA MILNE, JULIAN ROGERS, HUW THOMAS

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The Next Generation Pharmaceutical Summit is a threeday critical information gathering of C-level technology executives from the financial services industry.

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A Controlled, Professional & Focused Environment NGP ’09 is an opportunity to debate, benchmark and learn from other leaders. NGP ’09 is a C-level event reserved for 75 participants that includes expert workshops, facilitated roundtables, peer-to-peer networking, and coordinated technology meetings.

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UPFRONT

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P18 Funnybone P20 Top 10 – Best biopharmaceutical companies P22 From the vault P24 The burning issue P26 The five-minute CEO

UNHEALTHY TIMES

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o save money, many Americans are cutting back on medical care – potentially putting their health at risk – according to new research from the National Association of Insurance Commissioners (NAIC).

A national survey of 686 consumers, fielded in July, found that 22 percent of US consumers say they have reduced the number of times they see the doctor as a result of today’s economy.

Furthermore, 11 percent of consumers say they have cut back the number of prescription drugs

they take or the dosage of those medications to make the prescription last longer.

“Delaying medical treatment and regular physicals puts consumers at risk for potential health issues – and increases overall health insurance costs,” said NAIC President and Kansas Insurance Commissioner Sandy Praeger. “It’s critical that consumers continue to take responsibility for their health, so that we can all benefit from healthier lives and more affordable healthcare.”

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8 FUNNYBONE 23 A humorous look at one of this issue’s news stories

GSK will shed

850 research jobs in Britain and the US (p30)

AstraZeneca aims to deliver two NME launches per year from 2010 (p74)

50% 30%

Women make up less than

of the top echelons of most pharma companies (p84)

of women over 50 will experience a fracture in their lifetime (p36)

Only certain companies have the scale to support a

2000 to 30000 person sales force (p48)

What was a stable environment in the 70s, 80s and 90s is now flux (p42)

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INTERNET USE BOOSTS BRAINPOWER

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CLA scientists have found that for computer-savvymiddle-aged and older adults, searching the internet triggers key centers in the brain that control decision-making and complex reasoning.

The findings demonstrate that web search activity may help stimulate and possibly improve brain function.

The study, the first of its kind to assess the impact of internet searching on brain performance, is currently in press at the American Journal of Geriatric Psychiatry and will appear in an upcoming issue.

“The study results are encouraging, that emerging computerized technologiesmayhavephysiologicaleffectsandpotentialbenefitsformiddle-agedandolderadults,”saidprincipalinvestigatorDr.GarySmall,aprofessor at the Semel Institute for Neuroscience and Human Behavior at UCLA. “Internet searching engages complicated brain activity, which may help exercise and improve brain function.”

As the brain ages, a number of structural and functional changes occur,includingatrophy,reductionsincellactivity,andincreasesindeposits of amyloid plaques and tau tangles, which can impact cognitive function.

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TOP 10

MINIATURIZATION AND AUTOMATION

Cream of the crop

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Top Employers in the biotechnology, biopharmaceutical, pharmaceutical and related industries

Genentech (South San Francisco, CA)

2 3

4 5 6 7 8 9 10

Monsanto Company (Creve Coeur, MO)

Genzyme Corp.

(Cambridge, MA)

Boehringer Ingelheim (Ingelheim, Germany)

Schering-Plough Corporation (Kenilworth, NJ)

Roche (Basel, Switzerland)

EMD Serono, Inc. (Rockland, MA)

Millennium: The Takeda Oncology Co. (Cambridge, MA) Gilead Sciences (Foster City, CA)

Eli Lilly and Company (Indianapolis, IN)

Source: Science magazine

BIOTECH BUYOUT BONANZA

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recent Datamonitor report claims that the cash strength of pharma companies is a big asset in these unhappy financial times, and now is the moment to put that cash to work. Pharma firms

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should purchase biotech outfits which can no longer depend on generous lines of credit and whose pipelines can bring big profits to lucky buyers.

Source: PharmaTimes

roviding automated microfluidics delivery along with a miniature environmental control system enables an experiment to remain on an inverted microscope platform for extended periods of time, providing time-lapse imaging of live cells over the course of several days.

Automated Fluidics Delivery and Control. Nanopoint’s cellTRAY Manager software regulates the flow of fluids by syringe pumps that lead to and from a cell media reservoir and waste bottle.

The infusion ports contained in the system manifold, mounted on the microscope stage, enables parallel isolated experiments utilizing different fluids in each of the 10 regions of the cellTRAY. Since each of the regions can be individually addressed, different reagents can be easily administered to each one independently. The syringe pumps are capable of delivering a variety of flow rates, programmable by the user, with a flow resolution of 100nL/sec. The volume of fluid in a single syringe will cover a four hour experiment; and the volume is automatically replaced from the reservoir, extending the experimental time to multiple days.

The stage-mounted manifold contains integrated temperature feedback and an air port enabling regulated CO2 flow. The hinged glass cover on the manifold is also used to minimize contamination while still allowing easy access to the micro-scale live cell containment device.

Nanopoint’s cellTRAY allows biologists to hold multiple cells in an ordered array enabling automated processing and simultaneous monitoring of a large matrix of cells. The cellTRAY has the dimensions of a standard microscope slide (1” x 3”) and contains an array of 8 x 300µm open wells per region which provide discrete, uniform sample populations along with replicate wells for statistical analysis. Cells attach themselves to the cellTRAY surface slightly below the flow entrance to minimize shear stress.

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GOVERNOR VETOES BILL

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overnor Schwarzenegger has gone ahead with a veto of AB 1945 (De La Torre), a bill which would have required health insurance companies to get approval from the Department of Managed Health Care or Department of Insurance prior to cancelling the health insurance policies. The California Medical

Association, which sponsored the bill, called the veto a betrayal of the Governor’s promise to stop the cancellations.

“The Governor’s veto betrays the promise he repeatedly made to Californians to protect them from insurance companies cancelling their health insurance when they need it most,” said Dr. Richard Frankenstein.

DON’T FORGET SECURITY WHEN TRACKING DRUGS

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roposals for drug tracking systems continue to gather pace. There is a realisation that unit-level tracking (‘serialchain of valuization’, ‘pedigree’, etc.) is necessary to combat able and vulthe rise in counterfeit medicines. As with all nerable assets. major changes, there are both opportunities and Pharmaceuticals should be treated like currenthreats. While the introduction of ‘track-andcy and passports. The average amount spent trace’ systems will provide valuable benefits, on authentication per banknote is substantialthere is also the danger of making ly higher than for most drug wrong decisions. packs, because the need for auThe use of visible two-dimenthentication has been reinforced sional bar codes, the current will not give up the over many years due to deterlucrative trade in favouritefirststepinthisdirection, mined criminal activity. has some weaknesses.The codes fake drugs because Criminalswillnotgiveupthelua coding system is crativetradeinfakedrugsbecausea can be copied and used on fake introduced packaging; then if two packs carcodingsystemisintroduced.Inother rying the same visible code are in the supply industries, entire parallel ‘authentication’systems chain – one fake and one genuine – the first pack (freephone numbers, websites, etc.) have been set tobe scannedcouldbe approvedas genuineand uptovalidatefakeproduct. dispensed, whether it is a counterfeit or not, and In designing new systems, the pharmathe next occurrence of the same code would be ceutical industry should adopt a layered apflaggedas suspicious.This is dangerous,andwill proach, where multiple security features are eventually erode confidence in the system’s abilcombined. The approaches should include ity to validate genuine product. various overt technologies as well as covert Remember why society needs these sysfeatures and forensic taggants. tems in the first place: to secure the supply For more information, please go to: www.sicpa.com

Criminals

FDA APPROVAL FOR RAPAFLO RAPAFLO launch anticipated in early 2009

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he Food and Drug Administration (FDA) has approved RAPAFLO (silodosin), Watson’s new alpha blocker for the treatment of the signs and symptoms of BPH. BPH is the number one reason patients visit urologists and is characterized by urination problems, including decreased urine flow, more frequent urination and nocturia. The US BPH market is growing and currently exceeds $2 billion annually, of which $1.7 billion is attributed to alpha blockers.

“RAPAFLO’s approval is the most important milestone for the Company’s Brand division thus far,” said Paul Bisaro, Chief Executive Officer of Watson. “RAPAFLO is a novel product that provides strong efficacy and an exceptional safety profile for patients managing their BPH. RAPAFLO provides an excellent long term opportunity for Watson and will be the foundation for future growth of our urology franchise.”

The US BPH market is growing and currently exceeds

$2billion annually

of which

$1.7billion is attributed to alpha blockers RAPAFLO has proven to significantly improve Qmax scores, as early as

2 hours following first dose

www.ngpharma.com

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FROM THE VAULT Q4 2007

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FSTUS: issue eleven Eiry Roberts, ??job title??

Back in issue 11 of Next Generation Pharmaceutical, Eli Lilly’s Eiry Roberts gave us the lowdown on the importance of keeping communication channels open. “It’s important that we understand how to share information in an environment that supports the business model we need.”

To read more, go to the past issue section at www.ngpharma.com and click on ‘The Next Generation of R&D’ within issue 11.

1 2 3 4 5 6 7 8 9 10 22

HydrocodoneAcetaminophen

106.4mil

Lipitor

68.5mil

Lisinopril

57.4mil

L-Thyroxine Sodium

44.5mil

Atenolol

42.6mil

Toprol XL

38.8mil

Hydrochlorothiazide

37.3mil

Furosemide

36.6mil

Azithromycin

36.3mil

Norvasc

36.0mil

www.ngpharma.com

TOP 10 Top 10 US retail product ranked by total prescription (TRx) count, 2006 Based onWolters Kluwer Health propriotary methodologies. Reflects prescription data for retail and mail order pharmacy channels.

VIREAD APPROVED

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he Food and Drug Administration (FDA) has granted marketing approval for Viread (tenofovir disoproxil fumarate) for the treatment of chronic hepatitis B, a serious liver disease caused by the hepatitis B virus (HBV). Chronic hepatitis B is the leading cause of liver cancer worldwide and affects an estimated two million individuals in the United States.

Viread is now also indicated for the treatment of chronic hepatitis B in adults.

The drug is administered as a once-daily tablet, and works by blocking HBV DNA polymerase, the enzyme that is necessary for the virus to replicate in liver cells. Viread has been available in the United States as a treatment for HIV infection in adults since 2001.

“Viread will be an important new treatment option and its approval represents a significant step forward in the fight against chronic hepatitis B,” said Ira Jacobson, Chief, Division of Gastroenterology and Hepatology, Weill Cornell Medical College.

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THE BURNING ISSUE

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Making a difference Biomarkers are increasingly playing a crucial role in new drug development.

NGP asked three industry insiders for their thoughts.

James W. Jacobson

Christina Coughlin

Dr Samir N. Khleif

Chief of Diagnostic Biomarkers, National Cancer Institute

Associate Director in Discovery Translational Medicine at Wyeth Research

Chief of Cancer Vaccine Section, National Cancer Institute

A biomarker is anything that you can measure that in some way correlates with a disease state of interest, whether it’s the presence of disease or something that gives you information about the future course of disease. It can be a molecular entity that you can measure at the level of the genome, at the level of RNA expression or protein expression. It can be a lipid or a glycoprotein, and the field of metabolonics is also becoming important.

A genetic biomarker is something that is an alteration in the normal DNA pattern of the individual, where there is a mutation or rearrangement of the genetic information. You can measure some of those things in the serum if the cells are lysing and DNA is being released.

A serum biomarker refers to the presence of a protein entity within the serum that you can measure without having to take a biopsy of the tumor – so a serum biomarker would be a subset of other biomarkers that you might consider. There could also be other types of molecules in the serum – anything that exists in the serum that’s correlated with the presence of disease.

At the moment, existing regulatory systems are not well designed to address the development of high content patient selection biomarkers, such as the complexity of genomic data. One way forward is to begin the dialogue regarding the process of biomarker development with the FDA and EMEA, the regulatory agencies, earlier in the clinical development stages. Applying biomarkers for internal decision-making in the clinic is a very different outcome than biomarkers that might one day be included in the drug label.

The development of such patient selection biomarkers for compounds will be critical going forward, and early discussions with both diagnostic companies as well as regulatory agencies will be needed for successful implementation in the clinic.

Ultimately, this is a step forward in the treatment of cancer, being able to match a patient’s tumor with the right drug or right combination based on biology as opposed to empiric evidence alone. Our plan at Wyeth is to be at the forefront of implementing novel biomarker approaches to enhance the predictability in the clinic toward the goal of improving the drug discovery process.

We have to develop biomarkers to be able to select patients that we know will respond better for the specific therapies. We need to pursue different designs that will enable us to select fewer patients for clinical trials to reduce the number of patients who may be exposed to side effects unnecessarily, and help us predict and select patients who will respond better. Fewer patients will take less time and will help get drugs that are safe and more effective into the market sooner.

If you want to integrate biomarkers to indicate which patient to treat, then designs must be more innovative. Rather than treating 1000 patients at random, treat only those that the biomarker indicates will have a higher possibility of response – or a lower possibility of side effects. This will require a new way of thinking and a new approach to clinical trial designs.

Without biomarkers, you cannot move forward into better clinical trial design.

Therefore you need to address the biomarker issues and develop better and more robust biomarkers.

www.ngpharma.com

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THE FIVE-MINUTE CEO

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Peter Slavin, President of Massachusetts General Hospital, tells us how the hospital is improving patient care whilst pushing the boundaries of medical research

NGP. MGH has created a Disparities Solution Center, which looks at healthcare disparities within the hospital. Why was this an important issue to address?

PS. I’m convinced, based on national and local data, that healthcare disparities are an important public health issue. In the world of academic medicine, there has been a lot of good work done to document those disparities through good clinical research, but a couple of years ago we became convinced that there was too little effort going into actually addressing and trying to remedy those disparities.

We established a Disparities Committee at the hospital, and also set up the Disparities Solution Center and are busy looking within our own walls at where healthcare disparities exist. When we find them, we put in place programs aimed at eliminating them.

For example, one of the areas in which we did find a disparity had to do with the diabetes care of our Spanish-speaking patients, who were getting tested for diabetes less frequently, and whose diabetic control was poorer than their English-speaking counterparts. We’ve instituted a program to improve the care of these patients, and some results I’ve seen recently showed that we’ve made significant progress.

NGP. Can you tell us about some of your research centers which are focused on the theme of biomedical research which show the mose promise for making a difference to the lives of patients?

PS. We have a genetic center, and we have what’s called a Regenerative Medicine Center, which is largely focused on stem cell research. We also have several other centers, with investigators from different clinical departments focused on making progress in a specific area of biomedical research.

One thing that is unique about teaching hospitals like Mass General is that we have an ability not only to bring great scientific ideas from the bench to the patients, but also to take astute clinical observations by our clinicians and to try to understand in the laboratory what underlies those.

For example, a few years ago, one of our clinicians realized that certain patients with lung cancer responded dramatically to a particular new medication. Most patients didn’t respond at all, but the ones who did responded incredibly dramatically and that led to a collaboration between the clinician and one of our geneticists, who together figured out that the patients who responded had a certain mutation in their lung cancer that made the tumor susceptible to this drug.

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NGP. A new technique has been developed by one of the hospital’s cancer researchers to isolate tumor cells in human blood. How significant is this discovery for cancer treatment?

PS. This technology may ultimately become a screening tool for cancer. It will enable doctors to monitor their treatment and finetune it over time, because it appears that when the cancer responds to treatment, the number of cells in the blood go down much quicker than with other clinical indications. When the tumor comes back, these cells start to appear in the blood much faster than with the usual mechanisms we use to follow cancer patients.

You can then isolate the cells and see, genetically, what happened to them and what they may be most susceptible to.

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CONSISTENT FAST FACTS COMMUNICATION A closer look at schizophrenia We’re all aware of the importance of defining a vocabulary that captures the personality and unique features of your brand. This brand vocabulary is typically born out of a formal market research process to identify key words, phrases and statements (‘targeted’, ‘convenient’, ‘long-lasting’, ’easy to use’, ‘not needing titration’) that strike a chord with the medical community, providing easily identifiable solutions to previously unmet needs. Getting the brand vocabulary right is important, as it underpins all product positioning, providing a unique and consistent brand identity.

This formal brand development process (which involves creation of the product’s visual identity alongside a brand character and vocabulary)normallytakesplacewhenaproduct isinphaseIIItesting.However,communication about the product starts a long time before that. And so should consistency in vocabulary.

Pre-phase III clinical and preclinical data is likely to have been communicated in numerous publications and presentations, as part of a successful publication plan.

Consistency in phraseology across these channels will maximise the impact of your communications, especially when presenting a new drug class or in an area where there is ambiguity in clinical terminology.

Doyouwantyourdrugtobean‘oralhypoglycaemicagent’oran‘oralanti-diabeticdrug’?

Do you want to be targeting ‘mild cognitive impairment’ or ‘age-related cognitive decline’?

Would you prefer your drug to act on the ‘digestive tract’or the ‘alimentary canal’? The potential for mixed messages is huge.

Even if you’re (understandably) not yet ready to spend money on the formal branding process, it is important to think about how to present a consistent story in these early communications. Ask your opinion leaders, search the medical literature for common phrases, and debate with colleagues in different departments. Thinking about consistency in phraseologyduringearlycommunications,and uniting marketing and medical departments early in the drug development process, will help create a consistent messaging platform on which to build more formal promotional activities in the future.

For more information on the publication planning process, visit www.ngpharma.com/currentissue/article.asp?art=275456&issue=285

STEM CELL DISCOVERY

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cientists around the world are learning more about stem cells and how they function to help the body restore itself throughout the lifespan. Stem cells exist in all sorts of tissues throughout the body – they help the body to continuously repair itself. And with the right stimulus, they can develop into many different kinds of cells.

Researcher Keith March at Indiana University in Indianapolis recently learned more about one kind of stem cell – it exists on the outer lining of blood vessels. He explains that blood vessels have an inner lining which are called the endothelial cells, and they have an outer lining which contain these stem cells.

So we wondered whether those stem cells that were in the position of the outer wall of the blood vessel were being, March says. And we started experiments to test that question.

March and his colleagues found that the two kinds of cells were indeed interacting. It turns out that the stem cells had the ability to keep the epithelial cells strong – as long as endothelial cells sent the right signals.

But if the endothelial cells were diseased or damaged – for example, from high blood pressure, high cholesterol or high blood sugar – stem cells on the exterior walls of blood vessels transformed themselves into fat cells.

and Alzheimer’s

2.2 million adults, or about 1.1 percent of the population age 18 and older in a given year, have schizophrenia Rates of schizophrenia are very similar from country to country – about

1% of the population Schizophrenia ranks among the top

10causes of disability in developed countries worldwide

10 million American baby boomers, that is one in every eight, will develop Alzheimer’s in their lifetime

Source: VOA

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When pretty good isn't

GOOD ENOUGH Moncef Slaoui has a tough job ahead of him – implementing significant changes in GlaxoSmithKline’s R&D organization 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.

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oncef Slaoui catches me off guard. I mention my Canadian background and he immediately asks if we can conduct our interview in French. It’s a joke; though if he wanted to, Slaoui could chat fluently in any of three languages: English, French or Arabic.

A citizen of both Morocco and Belgium, GSK’s Chairman of Research and Development has studied and worked in Europe and the US, in both a university setting and in industry. This experience of dealing with all kinds of people in many different situations should come in handy as he negotiates the tricky times that lie ahead for his R&D organization.

As part of a company-wide restructuring that began in October 2007, GSK recently announced it would shed 850 research jobs in Britain and the US, in an attempt to improve productivity and efficiency. In the current climate of financial uncertainty, such a move is sure to prompt speculation about the company’s future plans, and keeping staff morale high will be a challenge.

When asked about the job cuts, Slaoui doesn’t try to dodge the question, but instead approaches it as he appears to approach any challenge – by tackling it head on.

“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 organiza-

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tion. It’s a very difficult message. It definitely impacts the morale of recent financial turmoil. People are still getting older and they still the organization and the motivation of those losing their jobs, and need medicines. But that doesn’t mean there aren’t challenges to also their colleagues who have to see that happen. It’s one of the big be faced. The things that GSK is doing are exactly the sorts of things challenges of changing an organization. companies should be doing.”

“Scientists are faithful to their projects and to their science. They do their best for their projects. It’s not because they fail individually Passion and energy that they lose their jobs. Globally there may be an element of failure, Slaoui’s task will be made easier by his own participative manageor at least of limited success, because we haven’t had enough blockment style. He says he likes to be challenged and to challenge, that busters coming through, but on an individual basis and a small team he’s determined and has a lot of energy – and meeting him, you can basis, it’s very hard. I’m confident that this strategy and these changes see that it’s the truth. His obvious passion for his job shines through, will make us even more successful, but there is still a period of adjustbut he also comes across as very down to earth, a view shared by ment – of grieving, if you will.”

Senior Vice President, Medicines DeEven though the major changes velopment, Allan Baxter.

Moncef Slaoui is Chairman of Research have now been made and the company “The challenge comes without and Development at GlaxoSmithKline. He is is emerging into a period of consolidacriticism or disempowerment, the ena member of the Corporate Executive team tion, in such an atmosphere, it can still ergetic determination and his passion and the Board of GlaxoSmithKline plc. In his be difficult to keep people focused on comes from the urgency of the quest previous position as Senior Vice President, their work. This is why Slaoui and his to find significant medicines,” Baxter Worldwide Business Development and leadership team are spending a lot of says. “But at the base of everything External Alliances, he spearheaded changes time explaining the reasons behind Moncef does is careful deliberation in R&D to enhance drug discovery and the cuts. and intuitive judgement.” accelerate product development. Previously, “We know that we’re making Slaoui himself summarizes his in GSK Biologicals, he engineered the changes that will make us stronger style with this anecdote: “A few months development of a robust vaccines pipeline. in four or five years. If we don’t make after I became Chairman of R&D, I had 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.”

According to Jo Pisani, Director of Pharma Advisory for PricewaterhouseCoopers, pharma companies do need to change to stay competitive in the current climate. “Companies will have to shift their business models, outsource more, be more entrepreneurial and nimble,” she says. “The pharma market is still strong, even with the

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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

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– and even if your paper is 95 percent right and 5 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.”

From anyone else, that might sound like an elitist comment, but it’s obvious that Slaoui is sincere in his approach to finding and retaining the best researchers. “As an organization, we have to acknowledge that we need these intuitive people and we need them in the right places. We don’t need thousands of them, but we need to have people who are going to make the right guesses, coming not from out of the blue but from deep expertise. I’m always looking out for them, and whenever I come across them, within our organization or outside, I jump on them.”

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 enhance performance is harder to do with an organization 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 organization 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 organization. “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 recognized.”

Slaoui is a firm believer in taking opportunities where he finds them. “Great ideas happen everywhere, inside and outside of an organization, but primarily outside, and I’m aiming to externalize and maximally open our world to the outside. Challenging situations make the outside world more accessible to us and more available to interact and collaborate with us; and therefore, I see that as an opportunity.”

“We need to have people who are going to make the right guesses, coming not from out of the blue but from deep expertise”

Surviving and thriving No one can deny that the pharmaceutical industry is facing a time of significant change, with patents expiring and new blockbusters harder to come by. According to Slaoui, the move to generics stems partly from the fact that payers have realized they can be much more powerful; that they can use generic medicine and that they can make it harder for a new medicine to be paid for and to justify its value.

Regulators have also substantially raised the bar in terms of the safety they expect from novel medicines.

“There will come a time when a significant number of players in the industry will disappear and only a few will remain around the table,” Slaoui says. “Those who remain will be those with a strong R&D pipeline and a strong R&D organization. GSK will be one of those, because our business model is based on innovation and the discovery of novel medicines. That’s the name of the game for those who will survive.

“For this reason, we have no choice but to organize our R&D organization for maximum success. And that’s what we’re doing. It’s why

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I’m pushing for quite significant and profound changes, despite the fact that our organization is already pretty successful. Because pretty good is not good enough; outstanding is what it’s going to take.”

The latest research from analysts PricewaterhouseCoopers confirms Slaoui’s view that change is essential. Their recent report, Pharma 2020: Virtual R&D, Which path will you take?, states: “Those that regard R&D as an integral part of their activities may also need to review the way in which they manage their R&D and remunerate their scientific staff. We now know that one-size medicines don’t fit all patients, and the same is true of the R&D process itself. The limitations of the approach on which the industry has relied for many years have become increasingly clear and, in future, each company will have to chart its own course – or, rather, different courses for each of the projects it undertakes.”

The changes Slaoui is pushing for go straight to the heart of what makes an R&D operation a success: first, put the best science at the 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 center, 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- to fi ve-year business plans will be judged by an investment board made up of venture capitalists, bankers and other experts, as well as scientists.

The units will have clear deliverables and the deep scientific expertise they need to discover medicines, and, as Slaoui puts it, they will either deliver or they won’t. “When you’re in such a situation, you perform better; you have an opportunity to exert your passion better. You need to empower people and give them the time and the resources to do what they need to do.

“We’re doing several things at once. First, we looked into the basic science and asked, ‘Where is fertile ground for discovery to happen?’ We didn’t look at the market. We didn’t say, ‘Where are we selling a lot of drugs?’ We said, ‘Where is the raw material for great discovery to happen?’ And we identified eight areas. Then we said to our teams, ‘If those are the areas in which there is fertile ground to discover, why don’t you use your creativity? Come to us with your plan, come with a budget request, and then you have a three-year period to exert your creativity. We won’t tell you in advance what we expect you to deliver; you tell us what you’re going deliver, but then we will hold you accountable for that. It will be our

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decision to invest in you or not, and we will invest in those who are most innovative and also those who are most pragmatic in delivering on their innovation.’”

Slaoui says this new structure has transformed the way the discovery groups are working, because they moved from a culture where people had a sense of entitlement and never had to answer questions with everybody hoping they would deliver something, to a culture where they have to earn what they have.

“The same principle is being driven across the organization. We have much smaller project teams, and individuals work on a single project or two and not on 10. In this way, we are re-personalizing R&D. What happened in the last two decades is that we, as an industry, thought we could industrialize R&D in the same way we industrialized 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 sci-

“We’re going to move from Made in China to discovered in China” ence 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 the US, and in Europe, and farther afield in countries like India.

We now have 60 programs 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.

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Aids virus attacking healthy cells.

“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 sanofiaventis is pushing into eastern Europe with its purchase of Czech generic-drug 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

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 diarrhea.”

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 the fourth language he is fluent in is the language of success. n

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Sean Harper tells NGP’s Frances Davies about the exciting treatments Amgem is developing for osteoporosis.

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iven Amgen’s primary focus on life-threatening illnesses, osteoporosis might appear an odd target area. The disease, however, is a huge global burden; in the United States alone, 50 percent of women over the age of 50 years will experience a fracture in their lifetime, which costs the healthcare system $20 billion a year. Worldwide, more than 200 million people are affected by osteoporosis The problem with the existing therapies, says Sean Harper, Amgen’s SVP of Global Development and Chief Medical Officer, is that patients often don’t adhere to them. The company’s R&D scientists have been working to develop new therapies that may make treatment easier for patients to tolerate.

A culmination of 15 years of research and development activity, Amgen’s molecule denosumab, which is being studied in 19,000 patients worldwide in a range of conditions including osteoporosis, cancer-treatment-induced bone loss, and cancer-induced bone disease, demonstrated that it reduced the risk of spinal fractures in women with osteoporosis by 69 percent in a pivotal clinical trial.

Denosumab is an example of the innovation coming out of Amgen’s labs, as Harper explains, “What we observed in the osteoporosis setting in terms of fracture reduction at all the key skeletal sites, the tolerability and safety profile and a consistent increase in bone mineral

density, both when measured against placebo but importantly also superior to Alendronate in studies that we’ve done, is a really wonderful profile.

“Ultimately, the significant need that exists in osteoporosis might best be met by a molecule like denosumab that is subcutaneously administered on an infrequent basis, in this case every six months, and has the potential to address limitations in current therapy.”

Harper recognizes that more than half of osteoporosis patients who are started on an oral bisphosphonate will discontinue the drug within one year due to a variety of factors including inconvenience and intolerance of the therapies, “In clinical trial settings it’s possible to make sure everybody’s taking their pills rigorously. However, the drugs have a reasonable inefficacy profile in real life utilization.

“The attempt to get around that by having an intravenously administered bisphosphonate has been very effective in clinical trial settings. In fact, quite good efficacy can be obtained with an IV bisphosphonate, but unfortunately, it’s been very difficult to get the utilization of an intravenous bisphosphonate to happen in anything but very specialized care centers.”

Many of the primary care settings in which osteoporosis care is delivered don’t have the infrastructure to administer the bisphosphonates intravenously. Added to this is the side effect of acute flu-like syndrome in patients for

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COMPANY VALUES a few days after administration, which furthers the impracticality of that approach. “An option offering subcutaneous injection every six months would be a very important advance,” Harper says. He points out that denosumab also appears, based on clinical trials, to be more efficacious than oral bisphosphonates.

Translational medicine

Last year, Amgen ranked number 40 in Fortune magazine’s ‘100 Best Companies to Work For’ list, coming second amongst the five biotechnology/pharmaceutical industry companies. Sean Harper, SVP of Global Development and Chief Medical Officer, reveals the secrets behind their winning formula.

“The main contributing factors are Amgen’s mission, aspirations, values and leadership attributes. When you break this down and look at any company where people are satisfied and committed, these are the things that make it possible.

The people at Amgen, at an extremely high level, align and agree with our mission; they believe in our aspirations and our values. This is something that with a very high-tech quality really makes it special.

Any highly skilled workforce working on the cutting edge of technology and pushing any field forward will be excited by their mission, but when the endgame is to help patients with grievous illness, then there’s something special about that. I think people feel that, which is why they’re so happy to be at Amgen.”

When Harper arrived at Amgen six years ago, he was in charge of building the translational medicine capacity at the company. Despite having moved on from that role, he is still keenly interested in developments in this area.

In order to facilitate the development of real world treatments from scientific research, Amgen has created a unique structure in its Medical Sciences department. This involved taking people who were previously compartmentalized into research, preclinical development and development, and putting them all under one roof.

The range of individuals includes bench scientists with a research background, right through to physician scientists with specialty training in areas like oncology or rheumatology, and everything in between.

“What we’ve set them on is a mission to assess efficacy in humans,” Harper says. “The way we want to do this is through the use of pharmacodynamic biomarkers. This will allow us to understand whether the drug candidate does what it was designed to do in humans. Invariably, it’s doing what it was designed to do in animals, or we wouldn’t bring it forward to put it into people.

“Often we find that animal models are not very predictive of what happens in humans.We find that when you look carefully at some of the high technology assay formats, whether they be imaging, expression profiling, proteomics or other advanced techniques, they traditionally have been used more in the preclinical and research worlds on mice and monkeys.”

Harper laments that when these models are applied to humans, the molecule often doesn’t do what it was expected to do. However, once this barrier is overcome, the next factor to consider is the level of exposure needed and what dosage is needed to get the maximal inhibition of that enzyme or occupancy of the receptors.

“When you move into a real clinical experiment with a registration endpoint, like a change in tumor size or an ACR20 score for rheumatoid arthritis, you will know that you’re actually testing a dose that saturates all the receptors. If it doesn’t work, you can walk away from that molecular mechanism in that disease state rather than saying to yourself, ‘Maybe if I had tried a different molecule, or a different dose of this molecule, it would have worked.’

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“It used to be we could only interpret a positive result. Now we can interpret a negative one, and we can walk away. This is incredibly important, because it means we don’t spend hundreds of millions of dollars doing a phase III program on a molecule that could never work. This is a real advance, and we’ve been a leader in the industry in doing this type of work.”

Aiming high

Amgen aspires to be the best human therapeutics company by building the best R&D organization; in 2007, it invested more than $3 billion in R&D. Its work is centered around four key principles, the first being a focus on areas of serious illnesses, where an advance in the therapeutic armamentarium would be meaningful to patients and their caregivers.

The second, modality independence, means that if Amgen chooses a particular drug target, it will pursue that with whatever tool ends up being the most effective way to interdict that target. This could be a large protein therapeutic, a monoclonal antibody, its proprietary peptibody platform, a small molecule or some other variant of the above. “This is an important principle that we’ve tried to pursue, and it’s given us a lot of flexibility in the way we address things,” says Harper.

The third focus area is assessing efficacy in humans rather than relying on animal models, because very few animal models replicate the complexity of genetic background of human genetics. “While we use all the animal safety testing that’s required by regulators, we don’t focus as much on the traditional animal models of efficacy.”

The fourth principle is seamless integration from the bench all the way through the bedside, from research, development and commercial, to have everyone working together in a team-based matrix system. Harper points out that this is easily said but actually very difficult to do, “We’ve tried very hard to have this integrated approach. We also engage in substantial collaboration with other companies and academia, and we recognize that not all good ideas will be generated within Amgen.

“We have to be willing to get good ideas from wherever they come, and we’re very active in our outreach programs in that regard. We’ve started to see the impact of this approach, now that we’re seven or eight years into it. We have a 12-15 year product cycle, so right about now, we’re seeing the impact of this with respect to compounds that are marching through phase II and making their way to phase III, and in fact some of the things that were in the pipeline when these ideas were implemented that were already there, like Denosumab and Nplate. Those have actually been able to be moved forward following these approaches to the marketplace, or very close.”

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Current pipeline Amgen’s pipeline is an innovative one, with 14 novel mechanisms. Six of those novel programs have advanced into phase II over the last year or so. Looking at the whole pipeline from late discovery research through phase III, Amgen has more than 60 molecules in development with a mix of modalities (proteins and small molecules). The company has more than 125 clinical trials under way, with 40,000 subjects enrolled in 50 countries.

In addition to Denosumab, there are a couple of other compounds that Harper is particularly excited about, including Nplate, which was recently approved by the FDA, and three monoclonal antibodies. The first of these is AMG 386, a recombinant Fc-peptide fusion protein (peptibody) targeting angiopoietins. AMG 386 is designed to bind angiopoietins 1 and 2, thereby inhibiting Tiez dependent stimulation of endothelial cells. Harper notes how it is distinct from other angiogenesis therapies that work through the VEGF axis, which include Avastin, Sutent and Multikinase inhibitors that interfere with the VEGF system.

“In this case, what we’re working on is an angiopoietin/Tie receptor system, which is an important system in humans for angiogenesis but is distinct from VEGF. This is very exciting, because we know that the broad concept of interfering with angiogenesis can be an effective strategy to strangle the growth of tumors. It has this clinical validation, and yet we’re working in a different specific mechanism.

“The experiments we’re doing in a variety of tumors are designed to answer a couple of basic questions – for example, can you replace VEGF inhibition with this axis? Can you add this axis to VEGF inhibition and get further efficacy without untoward safety issues? These are pretty profound questions. We’re very excited about the molecule for this reason. Like VEGF inhibition, because we’re addressing the host rather than the tumor with the therapy, there’s less likelihood of escape from therapeutic control through mutation in the tumor, while it’s likely that the mechanism may be fairly ubiquitous in its utility.”

Another promising mechanism is AMG655, which may be able to address many different tumour types. Harper clarifies how this mechanism is one of activation of cell surface receptors. “There are many names for the receptors, but the simplest one is death receptors. There are a number of them, and by activating them it is possible to get can-

cer cells to undergo programmed cell death, or apoptosis. They are able to do this even when the intrinsic systems for programmed cell death have been inactivated by a variety of molecular changes that occur in cancers; for example, the P53 gene being inactivated or some of the other death mechanisms in what’s called the intrinsic programmed cell death pathways.

“The death receptors are the extrinsic system. What’s been fascinating in the research setting is to find that normal cells don’t undergo programmed cell death when they just have this extrinsic system activated.

However, if you take a cancer cell that isn’t undergoing programmed cell death because the intrinsic system is mutated and it’s trying to die but it can’t and you activate those external receptors, the cancer cell will die. If you stop and think about it, all nucleated cells in the body have these receptors, so there’s a broad utility and hopefully a specific activity in the cancer cell versus normal cells.”

Following behind the denosumab program for osteoporosis is that of AMG785. This is directed at a protein in the body called sclerostin, a negative regulator of bone density in humans. “Your bones, just like any other system, are regulated by the body, and there is a protein that you develop

ABOUT SEAN HARPER Sean Harper, Senior Vice President of Global Development and Corporate Chief Medical Officer Dr Harper joined Amgen in 2002 as Vice President, Development, and has held several roles, including the establishment of Amgen’s Medical Sciences capability, a translational medicine group focused on biomarker discovery, development, and integration into early phase clinical studies. Dr Harper served as Vice President of Global Regulatory Affairs and Safety prior to assuming his current role. Prior to joining Amgen, Harper was Senior Director of Clinical Genomics at Merck Research Labs.

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INJUNCTION UPHELD that limits the bone density,” Harper says. “What we’ve found is that in humans, if you examine individuals who have a genetic defect in this protein, they develop extremely dense and very strong bones which virtually never fracture. These people can fall off the roof of their house and not break a bone. So we’ve developed a monoclonal antibody directed at sclerostin.”

What the team has been seeing early on with this is an antiresorptive effect very similar to denosumab, where the resorption of bone is blocked. They are also seeing a bone building or anabolic effect on the bone. This combination of both blocking bone resorption and enhancing bone building by blocking osteoclass and enhancing osteoblast activity respectively is unique. Harper is unsurprisingly very proud of this discovery, “No one has seen this before and it’s extremely exciting. We hope to be in the bone space in a big way with denosumab, so to have something like this following on is in many ways an even greater breakthrough, if one can imagine that. This is a great situation for us to be in.”

Challenges ahead Harper is clear that the pharmaceutical industry faces substantial challenges. “If you step back and look at it from a societal perspective, it’s straightforward that we’re going to have to demonstrate the value of our new therapeutics; that the impact that those therapies are having on grievous illness and the impact that they have from a budgetary perspective are going to be very important factors.

“It’s not going to be good enough to show that a drug is safe and effective and get it registered with a regulator – although regulatory hurdles and commitments and focus on safety are very substantial challenges for us in the current environment. We are going to have to learn to get back to a way of understanding the benefit/risk ratio for therapeutics, and one cannot imagine a future of therapeutics development in which the expectation is that therapeutics will have no risks associated with them. We have to be clear as a society that that’s not a reasonable expectation to have.

“Ultimately, the industry is in a predicament. On one hand, we have to invest huge amounts of money in R&D to bring increasingly complex therapies to market, and the cost of doing that is rising exponentially for many different reasons. Despite how advanced our understandings of molecular biology and human biology have become, there are still many things we don’t know and we still are in a fairly empiric phase of drug development. That means unfortunately that many things fail and that the things that succeed have to be the basis upon which that further R&D investment can be made.

“Payers are less willing to pay for innovations, and that really does create a squeeze, and it’s a real squeeze on the industry and one that I think industry leaders have been struggling with for some time, and it’s going to continue to be a challenge.”

The other side of the coin, as Harper points out, is that these challenges also often offer some wonderful opportunities. This is evident in the enthusiasm in Harper’s voice when he talks, for example, about the oncology molecules Amgen has in development. He points out that this means an understanding of biology which, while it may not be complete, is complete enough to allow the company to move forward with good predictability and explore novel approaches to these serious illnesses.

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In October, the US Court of Appeals for the Federal Circuit issued a ruling affirming the preliminary injunction ordered by the US District Court in Boston barring Roche from selling its pegylated-erythropoietin (peg-EPO) product MIRCERA in the US, in violation of Amgen’s erythropoietin (EPO) patents.

The District Court had ruled that Amgen is entitled to a permanent injunction and upheld the prior jury verdict and court rulings regarding the infringement, validity and enforceability of 10 claims of four of Amgen’s patents.

Sean Harper, SVP of Global Development and Chief Medical Officer, comments: “Roche was seeking to market its product, which is essentially just a pegylated modification of our innovation, in the United States, despite the patent protection and intellectual property protections that were afforded the molecule in this country.

“We’ve always had the point of view that they were clearly infringing on our valid patents, and of course we’re very pleased with the ruling that affirms that. The district court assessment reflects what I have been saying to people: that if they didn’t grant a permanent injunction to such activity and allowed Mircera to come into the United States, they would – to quote them – ‘risk undermining the incentives for innovation that have produced and hopefully will continue to produce medical advances that extend and enhance the value of life.’ I don’t think you can say it better than that.”

“We will advance medicine, and we will find major breakthroughs against grievous illnesses, and some of those will have unequivocal value,” Harper comments. “The challenge is to have enough of those for the business model to be sustainable. That will differ from company to company, and I’m cautiously optimistic that our approach will maximize the probability that we will have a sustainable future here to fulfill our mission to serve patients. But I can’t say that I’m absolutely certain that we can do it, because the pipeline is the pipeline, and there are great unanswered scientific questions about each molecule in the pipeline, and to some extent it is fundamentally a high-risk business.

“Our immediate priorities in the short term are to get our osteoporosis medicine denosumab approved and launched and clearly demonstrate its value proposition to payers about it, which we think is very strong, and also focus on the other molecules like AMG386, 655 and 785. These are the sorts of innovative products that can demonstrate that value and create a sustained capability for companies like Amgen to continue to be the engine by which virtually all human therapeutic advancement occurs.”

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Hitting the Certain tactics in pharmaceutical marketing have tarnished the industry’s reputation. Todd Evans of PwC looks at the new thinking that can help restore public trust.

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harmaceutical marketing methods have been under much scrutiny recently, particularly when it comes to such controversial methods as direct-to-consumer marketing. What once was a rather stable environment in the 70s, 80s and 90s has turned into one in flux. There have been a number of shifting patterns with a diversification of the stakeholder pool, and the recognition that consumers are now empowered to select their preferred medicine. At one time the marketing world was one-dimensional with decisions placed exclusively in the hands of physicians. However, times have changed. Influence now comes from large government payers such as the Centers for Medicare and Medicaid Services (CMS), the private insurance carrier community, employers, advocacy groups and patient communities, although physicians still carry significant weight in product selection.

A dramatic change in the portfolio composition has affected the status quo. “Historically, we would expect to see simple chemical compound products that employed a fairly standardized go-to-market model that earned tremendous volumes of revenue even as a product enjoyed patent protection,” acknowledges Todd Evans, Director of PricewaterhouseCoopers’ Health Industries Advisory, Pharmaceutical & Life Sciences practice. “In this decade, we’re experiencing a new product conversion from primary care products over to a specialty drug portfolio.

With this, we’re seeing a lot more discovery upon the biologic molecule, which is significant due to its step-point increase in complexity and cost.

This development offers a great deal of challenge not just to the patient, but to the physician and payer community as well. There’s a great deal of go-to-market change being driven by the portfolio transition alone, and it’s being exacerbated by a need to supplement organic R&D with biologic acquisitions that are supplementing fairly weak pipelines.”

Evans highlights how such factors as rapid in-licensing deals and acquisitions of biologic companies implies that the mission of the sales and marketing organization has to become terrifically diversified in an

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awfully big hurry. Despite this, more often than not, and particularly within the traditional ‘big pharma’ companies, there is highly efficient, homogenized business model that was designed to address primary care products and is sometimes slow to adapt. “Organizations need to differentiate quickly and differentiate well – in terms of who is addressed as influencers, what the message is, the types of people that are the face to the market and how products are branded so as to create a well defined and differentiated brand experience around the product,” he advises.

"In an era of billion dollar new product development costs, the possibility of making a mistake that leaves money on the table is intolerable" Serious concern Direct-to-consumer marketing has been the Achilles heel for all those involved in the public face of pharma, acting as a partial contributor to a crisis in the industry’s reputation. “In many instances it [DTC] has earned the wrath of the public, as the adverts that come into the home as Mom, Dad and the kids are watching TV are often unwelcome,” laments Evans. “The industry may have unwittingly taken a black eye from that situation. There has been tremendous publicity linked to it and, to some degree, demagoguery into how the industry trades – with many stories of greed, and the tremendous wealth that has been created by a handful of very successful drugs, some of which are lifestyle focused in nature. The whole DTC revolution has been a big challenge in terms of reputation advancement and industry messaging, despite in a majority of cases delivering informative and educational disease-related information to the marketplace.”

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TARGET A serious concern for the industry is that many patents expire over the next few years. Many of these patented primary care products have been the cash engines for the industry over the last 20 years. The imminence of the deadlines is creating a certain sense of crisis as Evans highlights: “Companies are worried about which future products will sustain a company’s growth. Secondly, there is the matter of downsizing sales forces for products moving to generic status while defining what capacity is needed to create specialty treatment brands, maintain a high-quality patient experience, and go to market in a way that is rational and appropriate for the stakeholder communities and on an affordable basis that the enterprise can sustain. Those costs need to be managed carefully and very differently across therapeutic areas. The market-facing organization challenges certainly can’t be ignored as we see a tremendous volume of primary care revenues fall into generic status. This seismic, industry-wide revenue event demands a well managed industry response that deftly maximizes the new product assets while downsizing forces that are facing obsolescence.

“You can see this in the tentative steps that are currently being taken to downsize pharma’s sales force populations. There’s some lip service being given to the fact that the model is changing, when in fact we’re seeing a response driven by revenues falling off and generic conversions taking place. Up to now, it appears as a calibrated adjustment in what we spend in going to market the traditional way, versus an end-to-end redesign that is purpose-built for the specialty portfolio profiles that pharma is developing, in-licensing and/or acquiring.”

to use the industry as the bad boys to get a philosophical or political message across. “Pharma companies tend to be the richest link in the healthcare value chain, so it’s easy to beat the guy with the most money up. What is lost is the full value that many pharmacological treatments deliver versus the hospital and acute care charges that a lack of pharma treatment may ultimately drive.”

There are two general images that a pharmaceutical company can convey. The first is of pharmaceutical companies as self-interested, growth-focused, greedy corporate titans pushing products for the sake of selling products above all else. The other harkens back to an image the industry used to enjoy of delivering previously unmet medical benefi t carrying societal benefi ts with improved healthcare to the life of an individual. “Those are very different images,” pinpoints Evans.

“Unfortunately, during the 90s and up to now, a number of factors have unwittingly created an image of greed, selfinterest and cynicism. This image has been easily exploited by politicians and others who find these growth practices inimical to the public interest – that’s a big problem.”

According to Evans, in order to make an impact upon reputation, a pharma company must first recognize what its reputation is, accept it, and design a program to correct it. “I believe the industry does recognize that there is a problem and that they need to do something about it,” he affirms.

As far as managing these things, Evans identifies some conflicting behavior. For instance, direct-to-consumer spending continues to be strong; however, the impact and results of it could, he continues, certainly be characterized as dubious. In his opinion, there are tradeoffs between perceived influence on product sales versus the certain influence on reputation and how that affects product sales and reputation.

“There’s a conflict there,” he states. “The industry continues to focus on high cost specialty drug products and for these products to be accepted by the marketplace and the payers that must pay for them, pharmaceutical companies need to work on improving their healthcare reputation, drive trust in their message and reduce the barriers for acceptance for the outcomes they present.”

In 2006, pharmaceutical companies spent

$5 billion on consumer marketing campaigns

Problem image Often when people think of pharma companies, the image conjured up by many is not overly flattering. In fact, the image of the industry has been harmed by a number of different factors. According to Evans, most of the effort to deal with reputation has been made in the context of delivering therapeutic health value and creating greater public awareness of healthcare conditions. However, he argues that this does not serve the needs of political demagogues, which tend

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Brand strategy

messages to be tailored to discreet targets in such a way that they A strong brand can influence the choices that customers, emdrive value and that value resonates in a response, a feeling, a percepployees and investors make. However, pharma companies only seem tion and hopefully, a premium on the price.” to have dabbled with short-term corporate ad campaigns, which are Evans believes that the pharmaceutical industry is learning quickly rarely sustained long-term. What are some of the reasons behind to take on the challenge of recognizing the need for differentiation and this? Evans highlights how a number of companies have taken sigtailoring an effective brand response to it. "The landscape has changed nificant ‘black eyes’ as a result of a combination of mistakes and with specialty products and we are now seeing the envelopment of a believes the demagoguery of their motives and intentions have done patient through a service experience that’s being branded." real damage. This has forced pharma to begin to defend itself.

Building experience “I believe that what you’re seeing in the marketplace around With this in mind, how does a pharma company manage and build corporate branding and campaigns to resuscitate corporate image this kind of corporate experience? Firstly, corporate branding is often has an awful lot to do with the fact that we have a far more safety about the intangibles, such as messages of trust, integrity, and credconscious FDA regulator,” outlines Evans. “There is a higher hurdle ibility that need to be conveyed. “These are big messages,” explains to meet in terms of trust. We have less tolerance for safety risks Evans. “They’re about humanity. They’re with products, whether they are already about a value system and about the moin market or are new products that are rality of how we conduct our business. The just trying to come to market. There’s destruction of trust, integrity and credanecdotal evidence that things are getare the only countries that allow ibility are things that certain segments of ting tougher. Therefore, your ability to drug companies to advertise directly society have chosen to destroy by broadly communicate to the public, the physician to consumers demonizing the pharma industry when an community and payers is critical toward occasional bad actor in the pharma comestablishing your motives, objectives munity commits a wrong. and the kind of events that take place on the path to a clinical trial or I’m not sure it oftentimes results in a net benefit to society to marketplace result.” do that. If everyone runs around believing that the pharma industry Branding is often fleeting in pharma, and is focused on the prodis an evil community bent on greed and only greed, then we have a uct rather than building the public trust through corporate branding. societal problem in the making. A cynical public shaped by hyperbolic Evans highlights how the most important aspect to remember when political demagoguery is not one that is going to promote participatalking about branding is that brand is an experience, not a name. tive involvement in clinical trials, may actively suppress deserved He highlights how a corporate brand experience is something we aspricing premiums and ultimately inhibit an increase in the healthcare sociate with a company such as Coca-Cola or Kodak. However, with outcomes that we all seek in new products.” pharma companies things are different. “A pharma company plays in Evans’s advice is for pharma to ensure it communicates to solots of different disease states and therapeutic areas; they may be ciety that companies are ethical and delivering societal healthcare involved in preventions, cures and/or chronic treatments. Branding benefits – sometimes even if this means taking a bullet in terms of all of those things homogenously under the bottom line. “You need to recognize that you can take advantage a single brand name tends to be of such messages from a branding point of view by communicating not as effective. If you accept that your head and your heart are in the right place and that you’re the premise that brand is an doing the right thing. It may not necessarily always make you money, experience and that you have but because you have money you’re in a position to do it and shape a diversified stakeholder pool the conditions for a future where new treatments can be developed to across the value chain, it forces deliver societal benefits. These are wise things for pharma companies you to differentiate both within to consider, and there are some characters in the community that are and across a brand. This enables actually acting upon this story.”

A further challenge for the pharmaceutical industry is the seemingly inconsistent way that it brands and promotes its products, often characterized by frequent changes. As a result, consistency is lost, which can send out confusing messages.

There are both good and bad reasons for brand strategy changes. One of the reasons for such a change could be due to a phase IV study with unexpected results whereby the law of unintended consequence forces a change.

The US and New Zealand

"Pharma companies tend to be the richest link in the healthcare value chain, so it’s easy to beat up the guy with the most money"

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Best practices for a strong and consistent product brand As Evans highlights, it could be that, “A grant that was made and a study was conducted beyond the control of the pharma company, resulting in some bad press for a particular product. There have been several high profile cases of this over the last few years resulting in better controls over studies that could affect a product’s image, as well as a dramatic retooling of how we go to market as a brand.”

Trial and error is generally not a good way to go to market warns Evans, which is why getting things right from the start is absolutely essential. “Brand is experience,” he reinforces.

“The challenge for the industry is in embracing that message as opposed to brand being name recognition and pretty much leaving it there.

It’s really about what the patient, care giver and physician experience and what the payer organizations and employers experience relative to that therapy’s value benefits.”

As treatments become increasingly personalized, with individual genetic assessment and recommendations for biomarket-driven treatments commonplace, success will depend on how well a pharma company is able to connect brands to the people using their treatments. “One could argue that the evolution of a brand is synchronous with the increasing benefits that such a product may deliver to society,” he acknowledges. “We need to look back to the whole development process, and to introduce the aspect of external stakeholder communities to the product. The experience a product starts to reveal and deliver back in phase II and throughout phase III clinical trials is critical for getting the branding right as you are coming to market. If you wait until too late in the development process to identify critical services, patient experiences and data points that connect patient benefit to treatment practices, then the identification of a branding program may be rushed, insularly defined, and likely to miss the bullseye. In an era of billion dollar new product development costs, the possibility of making a mistake that leaves money on the table through an inaccurate patient service model and a misplaced branding experience is intolerable. In the end, getting it right by accurately communicating healthcare expectations and benefits to patients, physicians and payers alike will go a long way to regaining the public trust.” 

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ecoming externally oriented The final best practice to add is found with stakeholder communities in differentiation – recognizing key points far sooner in the development of difference across the primary care and process is absolutely key. Firstly, specialty drug landscape, as well as patient this can lead to reprioritizing product needs. Each therapeutic area has patients pipelines and even de-funding a product and physicians with remarkably different that no one might pay for. Secondly, the needs and perceived expectations. Aligning clinical trial process offers insight into how a model that meets such differences on a patients experience the therapy itself. It tailored basis is a requisite for specialty helps the team understand what branding drug success. Physician education needs messages need to be from pharma are emphasized and what "Aligning a model that extraordinarily different kind of business/service meets such differences for specialty drugs model the franchise and place a premium on a tailored basis is a on deploying the right should wrap around requisite for specialty message and personnel the product. These are important decisions that to deliver it. drug success" must be synchronous For many new with the branding products there is a very experience as it’s rolled out in sales and discrete experience that patients will either marketing launch campaigns. sail through with ease or have to confront The best practices are really with a range of pharma-supplemented coming from organizations that are more support services, thereby giving patients externally focused earlier in the process the tools to overcome the obstacles that than others. They are able to get a good can defeat a full course of therapy and its bead on stakeholder preferences prior to intended outcome and benefit. Companies the mad dash when a product is released that go to market in a homogenized, vanilla into the value chain upon the regulator’s manner, as if all products and patients are approval. Getting the patient and the same, tend to leave a lot of money on the physician experience defined accurately table by not differentiating where necessary. out of the gate while preparing the The price of inappropriate alignment with healthcare community for that experience patients is early discontinuation of therapy, and its value in health benefi t during the wasted payer funds and lost pharma sales, run up to product approval can make a whereas good alignment maximizes the new big difference in compressing the time to product asset and drives superior outcomes peak sales. in satisfied stakeholder communities.

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DRUG DISCOVERY

Getting in on the ground floor Can’t find the drug discovery technologies you’re looking for? Then make your own. Or at least, form a company that does. Reid Leonard of Merck & Co. and David Steinberg of Enlight Biosciences tell Marie Shields how they went about it.

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ou’re a big pharma company, and you’re feeling frustrated about the lack of enabling platform technologies to support the initial stages of drug discovery. What do you do? Get together with two of your competitors and form a company aimed at bringing these technologies to life? That’s exactly what Merck, Pfizer and Eli Lilly did: they formed a new company, Enlight Biosciences, with the help of PureTech Ventures.

According to Reid Leonard, Executive Director of Licensing for Merck & Co., the purpose of the venture is to encourage the development of enabling technologies that pharmaceutical companies can use to support their internal efforts for drug discovery development and clinical decision-making.

“There is a lack of venture capital being devoted to the development of ‘tools’ companies needed in order to create these technologies. Some technologies are dying on the vine for lack of capital. The concept for Enlight was to bring together the institutions that will be the ultimate customers, and therefore have a stake in the future of this space, to determine which precompetitive foundational technologies we would like to see, that we could then apply to internal programs.”

David Steinberg, CEO of Enlight and a partner at PureTech Ventures, points out that the formation of Enlight followed a slightly different path than normal. “Usually we start by identifying areas of unmet need in life sciences medicine, then bring in top-tier academic luminaries and key opinion leaders to form a founding scientific advisory board of a company with us, and with that group we identify opportunities for innovation and existing technological approaches.

“With Enlight, we decided to work directly with the pharmaceutical industry so that the groups that were most in need of those platforms and enabling technologies could work with us from the beginning in developing them. The idea was to bring the two parties, PureTech and the pharma industry, together.

On PureTech’s side, we had the deal flow and the ability to get these companies started, and on the pharma industry side there was the unmet need around novel enabling tech-

nologies. We then worked together directly rather than relying on external venture communities to fund these technologies.”

The notion of precompetitive technology is an interesting one, because it enables companies to work together at a point before any conflicting commercial interests arise. As Leonard explains, the aim with Enlight is to identify broad areas in need of better tools to support what would ultimately be proprietary work conducted by each individual user. He compares it to the development of information technologies, in which computer processing power and the growth of distributed computing and the internet has facilitated the individual business objectives of users.

“We’re trying to support the same sort of foundational technologies,” he says.

“But unlike something broad like information technology, which is used across many industries, we’re particularly interested in enabling the development of technologies that would be of use to the biopharmaceutical industry, hence our decision to go in as partners in Enlight.”

Sharing the pie Steinberg points out that the model of needing to put a lot in to get a lot out isn’t as appealing as it used to be, even though the ROI could be the same. Enlight’s aim is to

and the financial pie.

“PureTech, as entrepreneurs, are obviously more motivated by the financial pie on a near term level, and the pharma companies are much more motivated by the strategic impact that these new technologies will make in their organizations. The two sides can carve up the two pies in a way that everyone wins, and we’re not facing the same limitations that we would be if it was purely a financial endeavor.”

Leonard, in turn, points out the practical benefits of the partnership. “We would define success as the creation of a platform technology, preferably a commercial instrument or perhaps a service company, that could provide a particular technological solution that would allow us to gain access to a tool that would otherwise not be available or would be available only much later.

“It’s easier to describe in terms of specific types of technologies; for example, technologies for the discovery and validation of biomarkers. The biopharma industry is investing significantly in the use of biomarkers to help us understand whether candidate treatments in development are actually working through the desired mechanisms; and whether they are having the intended effects on the targets prior to our ability to assess whether those interventions are ultimately altering the course of a disease.”

“We’re particularly interested in enabling the development of technologies that would be of use to the biopharmaceutical industry” Reid Leonard get around that by working directly with its pharmaceutical industry partners, so that it doesn’t have to rely on purely financial investors to fund the technologies.

“The reason this works is that you’ve created an additional source of value beyond just the financial upside, which is the strategic value to pharma companies. Now it’s no longer a zero sum game. Instead of having one financial pie and fighting over every dollar, you have two pies: the strategic pie

Leonard points out that currently there are many approaches to discovering and validating biomarkers, but these are still a collection of available technologies, from nucleic acid technologies and proteomics, which are essentially being repurposed and applied to the task of specific biomarker development.

He says there is a sense that somewhere in the entrepreneurial imagination of academic scientists exists an efficient platform that could be useful for the development of a set

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of biomarkers for a particular indication.

“The analogy that I like to use is the measurement of gene expression. In the old days, all we could do was a single-gene PCR. Now, we use high-density array technologies.

We’re looking for those sorts of transformational technologies that will be useful to everyone, but the proprietary interest in these technologies will come from the way in which we apply them to our internal programs.”

Making the choice The responsibility for identifying potential projects rests with the Enlight board and their scientific advisory board. Leonard explains that part of the attraction for Merck in the arrangement is that the Enlight team will focus on networking with academic centers.

“Enlight is matching our aspirations against what they see coming out of the universities. They develop a detailed proposal around a particular company or a project that they would like to initiate: identifying the investigators, working out the intellectual property situation, and determining who else they would need to involve. They may need to identify assets from several universities and bring them all together.

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“We’re seeing a fairly well-developed proposal by the time it comes to us for comment, and then the individual investors in Enlight have a vote in what we do.”

From Steinberg’s perspective, the criteria for choosing a project are: number one, providing impact for the pharma partners; and number two, the ability to be transformational in the long haul. “We don’t want to just make an existing screening technology a little bit faster or make an existing safety testing protocol a little bit cheaper,” he says.

“That means having a big impact on the percentage of drugs that fail once they get to the

available now, to open up pipelines, rescue failed compounds and open up whole new R&D strategies, because you now know you can deliver something that you never would have been able to deliver before.

“Number three is that we want to make sure that while the technologies are transformational in the long run, there’s a near term impact with our pharma partners as well.

For example, Endra, our imaging company, will have small animal tabletop instruments available in 2009, so that’s the near term impact; but the long term transformational element is the clinical applications from the

“The pharma industry has proven to be uniquely good at certain things . . . but innovation hasn’t necessarily been one of them” David Steinberg clinic by, for example, developing a dramatically improved prediction mechanism. Or it could mean enabling whole new classes of drugs through delivery strategies that aren’t

devices that we’ll be bringing online in the following years. It’s the idea of quick hits and big ideas and making sure both of those things are there.”

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Leonard stresses that the type of projects Enlight is looking to develop fall outside of Merck’s core business. “Although we’re a big technology user, we’re not in the business of developing technology per se, with a few specific exceptions. We’re not scanning the academic community for these types of enabling technologies with the same degree of focus we put into searching the academic landscape for potential new therapeutic opportunities.”

Focus areas There are three main areas on which Enlight is expected to focus in the near term. The first is novel biomedical imaging technologies, which would ideally supplement the existing imaging technologies to provide for additional noninvasive methods of tracking drug action and identifying patients who are candidates for particular therapy.

The second area is biomarkers. Enlight will not necessarily aim to develop specific biomarkers for a particular development program; the pharma partners instead hope to identify technologies that can be turned into a product or a company that would then enable them to use that technology.

The third area is identifying technologies that will allow the industry to work with biologic therapies in the same way that it can work with small molecule therapies today.

These would include delivery technologies for biologics, such as protein engineering and alternative expression systems.

According to Leonard, one of the key benefits of being a partner in Enlight is that partners get access to the technologies as they’re being developed. “For example, if a project takes off at Enlight with the goal of producing a new instrument, then the participating partners will have access to that technology during its development phase and will have input into the final design. We will in some capacity serve as beta testers.”

“Ideally there is some benefit of membership conferred to us. It’s not as though we have to wait until everything is done. We do hope to get a jumpstart on testing the feasibility of some of these technologies through our participation in Enlight.”

But Leonard points out as well that it is an explicit goal of Enlight to commercial-

Reid Leonard is Executive Director, External Research and Licensing for the Merck Research Laboratories. His role is to identify partnering opportunities that fit with Merck’s strategic research and development goals across all therapeutic and technology areas.

ize these technologies. The company may choose to develop an instrument to the point where an existing medical device or medical instrumentation company may take it up.

In other instances, it may decide to form a company to provide a specific service to the industry. This is where the Enlight model differs from a traditional consortium approach.

“There have certainly been examples of industry consortia in which companies have pooled assets, or at least intellectual input, to help facilitate the development of a technology. In contrast, Enlight has the specific purpose of running a business. Enlight does aspire to be a profit-making enterprise, and what we’re hoping is this business model approach will increase the probability of success of some of these projects, because they will have to stand on their own merit as a business proposition.”

Steinberg explains that as each new spinout company is formed, at the time of formation the pharma partners each have the opportunity to either support it financially or not. “If they do support it financially, they get all kinds of rights including,

most importantly, early influence on how specifically the technology is developed. Take the example of our imaging company Endra; there are a million different ways we could go with respect to everything from design elements like animal handling to application development – what are the first applications for which it’s optimized – and everything in between.

“For the pharmas to be involved with that from the very beginning is important, because then we can develop it so that it’s incredibly useful to them right away. Those that choose to invest also get ongoing access during the time we’re developing it, i.e., alpha and beta testing, regular input and updates to develop the process. Then they have the possibility of special access rights for a period of time after launch and guaranteed ongoing access rights once it’s launched commercially.”

Industry challenges This joint venture suggests that the industry is looking at novel ways to develop innovative technologies and bringing new medicines to patients. What does this tell us about the challenges that the industry is currently facing?

“One thing that struck me after this was initially announced in mid-July,” says Steinberg, “was the magnitude and the positive tenor of the response from the popular press, the life science press and other pharmaceutical companies. It has struck a chord with a lot of people because there is a big gap in pharma R&D in terms of its efficiency and productivity. Everyone quotes the statistic that the number of new drug approvals is going down and the amount spent on R&D from pharma is going up dramatically. Shouldn’t those be moving in the same direction? What’s wrong?

What’s broken?

“Everyone recognizes there’s a problem.

We’re spending more and more money for fewer and fewer successful drug launches.

The amount of risk that you undertake with each new development program is incredibly high. You’ve literally got billions on the line, and it could easily fail, and it will very likely fail for any given compound. The whole industry recognizes that some novel approaches have to be tried, and the pharma

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industry has tried everything from their own internal incubators to option funds to different ways of doing venture. The problem with many of the internal programs is that pharma companies aren’t necessarily set up to manage innovation in the same way that entrepreneurs are, so that’s where those programs can fall down.”

“The biopharmaceutical industry understands there is a limit on what any one organization is capable of pursuing on its own,” Leonard adds. “We all have varying strengths and areas of focus, and the days where a major pharmaceutical company, like Merck, would choose to rely entirely on its internal innovation engine have long passed. The general model in industry now is moving much more aggressively toward partnerships.”

Enlight serves as an example of a broadening of the concept of partnership. Traditionally partnerships were centered on a specific product. A pharma and a biotech company partnered to complete the development and commercialization of a molecule that was developed by the biotech company.

“We’ve seen a broadening of that concept to earlier-stage partnerships, many of which Merck has formed in the past few years, in which we enter into a researchbased collaboration with a biotech company with the specific goal of jointly discovering molecules to take into development. I see Merck’s participation in Enlight as moving one step earlier in the value-creation chain of attempting to fertilize the landscape for the development of tools that will enable all of our business, whether it be projects of our own, or projects in which we’re collaborating with others.”

Steinberg points out that with external technology programs, pharmaceutical companies can be too far removed, so they can’t control or get access to the technologies at the right times, and there are flaws with the different kinds of systems that currently exist. “Pharma companies are still looking for ways to improve R&D productivity so they can both have enough influence to make sure it’s right, while still not being required to do the work and the development internally because that’s not what they’re best at. They’re best at developing drugs. Enlight is designed

David Steinberg has worked in the biopharmaceuticals industry for more than 13 years. As a member of PureTech, Steinberg has been on the teams of Enlight Biosciences and Endra Inc. as founding CEO. Previously, he served as Chief Business Officer of portfolio company Follica, Inc.

to fill that void and that’s why it struck a chord.

“When we look back in 10 years are we going say Enlight transformed pharmaceutical R&D? I don’t know. I hope so, or I hope we can say it played an important role in helping various other things get started. I don’t know what it’s going to look like, but I do think there’s broad recognition that this is a big problem and the industry needs to be creative about how to approach it, Enlight is one way of at least starting to think about how to do that.”

Future plans What does the future hold for the pharmaceutical industry? Does the formation of Enlight point to the way forward? Steinberg certainly thinks so. “It would not surprise me if a lot of the industry ended up like that in the future, because if a small startup biotech gets something into phase II for $25 million

and a pharma takes $200 million to get that same compound, eventually something has to break.

“On the other hand, there are things that pharmas can do uniquely well. Only certain companies have the scale to run huge clinical trials, or have a 2000 or 3000 person sales force. With almost no exceptions, very few biotechs are ever going to be able to do that themselves, so there may be a natural kind of bifurcation where some pharmaceutical companies become commercial entities and aren’t innovating at all.

“Some companies will probably figure it out through mechanisms like Enlight and other creative internal mechanisms and external approaches and those will be considered the real innovators. You could easily see it going that way because the pharma industry has proven to be uniquely good at certain things, but over the last five to ten years, innovation hasn’t necessarily been one of them.”

Leonard has seen increased attention being paid by the pharma industry and the biotech community to actively engage with academic inventors and entrepreneurs in a way that is more directed and more focused than in the past. “For the past decade, the traditional model for many interactions between pharma and academia has centered around essentially unrestricted grants or sponsored research agreements that primarily support ongoing work from the academic investigator in areas that were chosen essentially by the academic investigator.”

“There’s a shift occurring on both sides toward a greater effort to identify opportunities for industry and academia to work together on areas in which the project focus is determined by the industrial partner. There’s a greater level of engagement between the companies and academia around the specific work plan and much more thought going into what constitutes a successful outcome.

That’s an area in which the academic mission and the industrial mission have to find common ground.

“There’s still a lot of inefficiency in the way information and scientific discoveries progress through that interface, and that’s an area where industry and academia can work together more productively.” n

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EXECUTIVE INTERVIEW

ANALYZE THIS Dr. Alain Meller, Director, Electronic Laboratory Notebook Solutions at Agilent Technologies, takes a look at electronic lab notebooks and their associated benefits.

NGP. The number of bioanalytical measurements performed in life science research is increasing dramatically. What is driving this increase?

AM. Many factors determine this growth: The more science progresses and knowledge is made available through globally accessible databases, the more experiments should be conducted to test hypotheses and discriminate between different assumptions.

More techniques than ever before are now available to the scientist, augmenting the number of experiments: HTS, combinatorial technologies, higher array densities in genomics, etc.

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Increasing regulatory and safety constraints impose more testing throughout the entire R&D cycle.

NGP. To a great extent, scientists still gather their experiment data by handwritten notes rather than in electronic form. What are the advantages of electronic lab notebooks (ELNs)?

AM. ELNs increase overall R&D productivity – some effects are short term and others more long term (among the cited drivers): They improve individual as well as organization-level efficiency by providing an integrated environment with workflow support and with

features that accelerate information entry and automate calculations. On an organizational level, they allow people to share and search for information.

The quality of experiment documentation is improved. ELNs achieve this by making experiments visible to the community and by providing templates that reflect local or global ways of operating.

Traceability is improved by being able to link experiments to authors and by being able to follow different paths in navigating through the knowledge base – by project, compounds, laboratories, etc.

A further advantage is that repeat experiments can be avoided. One of the most important factors cited by companies is that people do not know which experiments have already been conducted in the past and whether or not they were successful. An ELN allows mining of the experiment database using complex searches.

One axis for increasing R&D efficiency is the ability to have different disciplines collaborate on projects; for example, chemists with analysts.

An ELN is a perfect place to implement these processes – on the same example, both the chemist and analyst can be involved in the cycle of analytical request.

ELNs are able to ease multi-site collaboration. The scalability of an ELN like Kalabie allows deployment across sites, thus extending the benefits to global organizations.

An ELN can also be an efficient change management vehicle. Companies in this sector are experiencing mergers and acquisitions, and an ELN can help achieve integration faster.

(For example, when Solvay Pharmaceuticals acquired Laboratoires Fournier, the Kalabie ELN was the pioneer application to align the organization in discovery.)

Even though the implementation of a paperless organization in the context of intellectual property protection may not be a necessary short -term objective for many companies, an ELN at least provides easy-to-read printouts so researchers can avoid cutting and pasting experimental data into lab notebooks.

NGP. What is key to the design principles of ELNs? AM. From a user interface perspective, an ELN should be simple and straightforward to avoid

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unnecessary complexities and minimize the learning curve.

From an architectural perspective, it should allow plug-in, discipline-oriented workflows onto a common shareable knowledge base. This approach is known as ‘broad and deep’. We do not believe that a single generic ELN can provide enough value to the various disciplines.

We also recognize that it is not possible to have multiple ELN implementations for different disciplines in a single company for obvious reasons. So the architecture should support common needs (broad), as well as ability to adapt to discipline specificities (deep) in a single architecture.

From an IT perspective, zero client PC installation and high scalability are fundamental requirements. Response time should be high otherwise user adoption will not be gained.

Taking into account regulatory compliance to GLPs and 21CFR Part 11 as well as IP, protection mechanisms are also desirable.

NGP. What are the benefits of combining an ELN with a content management system?

AM. For over five years, Kalabie ELN has been implemented as a central repository of experimental data by numerous clients. This includes raw data from instruments as well as various documents that are linked to the experiment. Kalabie ELN provides mechanisms for uploading and securing these documents into its database.

However, other benefits could be gained in medium to large pharma companies by separating the management of raw data, for example, to outside the ELN, providing the following benefits: At a conceptual level, it makes sense to reserve the ELN to document experiment goal, protocol and final insights, and to not mix in the raw data. Of course, the ELN should be able to reference the data at the data management level.

The ELN may not be the only applications that needs to access raw data, and other kinds of documents not related to experiments which could benefit from a content management system. This would permit a uniform and centralized way to address problems such as the archiving strategy of raw data and documents.

Systems like OpenLAB ECM (enterprise content management) are providing instrumentlevel management capabilities that are not part of the primary ELN requirements, thus avoiding

Dr. Alain Meller, Director Electronic Laboratory Notebook Solutions at Agilent Technologies, is a seasoned informatics business manager with both independent software vendors and professional services organizations. He joined Klee Group in late 2004 to manage the Kalabie ELN business, where over two years he consolidated all areas of the business. Since Agilent’s acquisition of Kalabie in June 2007, he has lead the integration and development of ELN solutions into the Agilent lab informatics portfolio.

reinventing the wheel when the need to link to instruments becomes important.

An ELN tends to be a globally accessible system, while raw data management is predominantly local. Therefore, a two-level architecture provides the best performance and scalability, particularly for multi-site implementation.

This is also the reason why Agilent is partnering with Accelrys to enhance the interoperability of our solutions. As mentioned earlier, an ELN is a natural place to implement processes, therefore allowing a customer to use a product like Accelrys’ SciTegic Pipeline Pilot to process information from an ELN or to capture information into an ELN brings a lot of new possibilities for integration and consolidation of information. This kind of integration, made possible by the openness of our respective architectures, is providing exciting potential applications to our customers.

NGP. Is data preservation and storage an issue?

And how do you address it?

AM. This is a key problem, particularly if information may need to be archived in some cases for more than 30 years.That is one of the reasons why we avoided proprietary formats like Microsoft in favour of ASCII-based formats (XML).

When you centralize raw data and documents in a content management layer, you can then think about the subject in a global manner.

OpenLAB ECM allows the management of document archiving and retention policies, thereby facilitating the preservation and storage of data.

“The more science progresses and knowledge is made available through globally accessible databases, the more experiments should be conducted to test hypotheses and discriminate between different assumptions”

That is why, in the strategic view of its portfolio, Agilent has made ELN to ECM integration one of its priorities. This integration is already available and allows Kalabie ELN to refer to analytical data stored in ECM. NGP. In the battle between an open or proprietary approach, which side do you take?

AM. Agilent is committed to an open system architecture and strongly believes that serving the R&D life science space requires the collaboration of different vendors to provide the best IT solutions. Kalabie ELN, for example, allows the customer to choose from different vendors for supporting its chemistry capabilities.

NGP. What are your predictions for the future of the ELNs? Will they become as widespread and popular as LIMS software?

AM. I have no doubt that ELNs will continue to grow and spread over the full spectrum of experimental sciences. However, this field is still pretty much in its infancy and what an ELN will look like will certainly evolve considerably in the future. In pharma, I see ELNs as the place for supporting experimental activities with some degree of specificity according to disciplines, implementing inter-discipline workflows to support research processes and as a valuable source of information for R&D management.

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ALL MIND IN THE

David Michelson tells NGP about Merck’s groundbreaking work in schizophrenia and Alzheimer’s disease.

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chizophrenia is a disease in which Merck has, over the past couple of years, decided to increase its focus and effort on, and it is now one of the two toppriority disease areas in which we’re working in neuroscience; the other being Alzheimer’s disease.

We chose these focus areas primarily based on unmet medical need. These are diseases that affect large numbers of people, have really debilitating consequences and for which there are not good treatments available. For both of those diseases, we think that there are scientific opportunities that would give us a good chance at finding an effective treatment.

We approach schizophrenia in two ways. One is to develop novel, non-bilthomanergic agents for the control of

acute symptoms and acute exacerbations. The second is to develop agents that can be added on to other treatments, for patients who have essentially been stabilized and for whom the bigger problems are the chronic, persistent things that happen in schizophrenia – problems with cognition, problems with negative symptoms and overall social functioning.

Targeting that aspect of the illness is the other set of programs we are working on. That’s how we approach it strategically. Some compounds will actually be tested in both arenas; some will be tested primarily for one or the other.

Merck recently entered into a licensing agreement with Addex Pharmaceutivals to develop an orally available drug candidate for the treatment of schizophrenia. Addex has a lot

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MERCK’S AGREEMENT WITH ADDEX Earlier this year, allosteric modulation company Addex Pharmaceuticals entered into an exclusive worldwide license agreement with Merck & Co. to develop ADX63365, an orally available drug candidate for the potential treatment of schizophrenia and other undisclosed indications.

Allosteric modulators are an emerging new class of therapeutic agents. ADX63365, is a positive allosteric modulator (PAM) that targets the metabotropic glutamate receptor 5 (mGluR5), which is believed to be important as a target for the treatment of schizophrenia and other conditions. The deal also includes mGluR5 PAM backup compounds discovered by Addex.

Under the terms of the agreement, Addex will receive $22 million upfront and is eligible for up to $455 million in research, development, regulatory and sales milestones for the first product developed for two indications and up to $225 million in additional development, regulatory and sales milestones for a second product developed in two indications.

Addex is eligible to receive royalties on sales of any products resulting from this collaboration. In addition, Addex has an option to co-promote in certain European Union countries and will participate in the joint oversight committee for further development that will be led by Merck.

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of expertise in glutamatergic drugs, and in particular they have developed an approach to the mGluR5 target, which we think is very interesting. They have done a lot of work in developing a compound that could be tested at that target.

We’ve partnered with them around the mGluR5 receptor to develop a drug that we can test in schizophrenia, and our current thinking is that this is one of the targets that we would look at, both for acute control as well as add-on therapy for control of the chronic symptoms of schizophrenia.

Targeting Alzheimer’s Like schizophrenia, Alzheimer’s is one of our highest prioritized areas.

Almost everyone at our Boston site, for example, is working on Alzheimer’s – that’s more than a hundred people – as well as a number of people in West Point here in Pennsylvania. As with Parkinson’s, the approach is twofold in terms of the disease. One is to get at the disease process and find ways of preventing the progression of the illness, ultimately preventing the onset altogether if we can find effective intervention. The second approach is to improve symptoms, even if that may not change the ultimate course of the disease.

Within Alzheimer’s, we pursue a whole range of different approaches.

For example, we have several approaches to testing the amyloid hypothesis, both with small molecules and with biologics. We have several of those in the clinic and moving forward, about which we feel very hopeful.

We also have ongoing efforts in a number of other neuroscience disorders in which we’re developing novel treatments. In Alzheimer’s and schizophrenia, which are the highest priorities, we have both very wide and very deep research. In Parkinson’s, in depression and in some of the psy-

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chiatric disorders, we tend to be a little bit narrower; we focus more on specific targets, but also go deep in those targets.

We develop drugs that will interfere with the underlying disease process and will either slow or halt the progression of the illness. The other way that we target Parkinson’s is to find new non-bilthomanergic agents that are useful for symptoms, particularly for those patients who don’t tolerate or who are having breakthrough symptoms on the currently available symptomatic treatments. Those are the two ways in which we approach it, and there are several programs that are ongoing, one of which is also a partnership with Addex around the mGluR4 receptor.

the mGlu23 agonist that Lilly has been developing, you have a drug that is binding to both sites. It may be hard to tease out a molecule that binds only to one or to the other, but with an allosteric approach, you may be able to get just mGluR2 or just mGluR3 for example. It’s potentially a way of getting specificity; that’s one piece.

The other piece is that the degree to which you change the receptor may influence the function of the natural ligand, and in doing that, you may be able to fine tune. You may be able to increase the potency of the ligand; you may be able to decrease it in a way that modulates the activity of the receptor without completely blocking it or completely activating it.

New approaches

Other projects

Merck has been applying positive and negative allosteric modulators of metabotropic glutamatergic receptors for the potential of providing greater ‘fine control’ of central nervous system processes.

When you have small molecules that you target at receptors, you can have what’s called an orthosteric or an allosteric approach. You can go directly to the binding site for the receptor and compete with whatever naturally binds at the receptor, or you can try and target a portion of the receptor that isn’t necessarily a natural binding site for the compound that the body produces that normally binds at the receptor.

The change is the confirmation of the receptor and changes its affinity for the natural ligand. That’s an allosteric approach, and that, for many receptors, has several potential advantages. One advantage is that if you have a compound or an internal ligand that binds at a receptor, it may be that there’s relatively little specificity, that there are close homologies to other receptors, and so that any compound that binds to that receptor may bind to another receptor and have effects that you don’t want.

If you go with an allosteric approach, you may be able to get specificity at the specific receptor that you want, so that, for example, if you take

The other project that I can talk most about and that I would really highlight is a late-phase project that’s a CGRP receptor antagonist for migraines.

That’s a drug that’s in phase III and for which we have good efficacy data showing that it appears to work really well, and that it’s a new class of medications.

We hope it will have real advantages over the current standard treatments, which are the triptans, in terms of side effect profile.

This is a target in which there’s been a fair amount of interest but which has been very difficult to come up with compounds that work at it. It’s a real achievement, a proud achievement, for the Merck medicinal chemists and for the preclinical people to come up with the biology and chemistry to get a ligand for it, and for Merck clinical development in terms of being able to really conduct a thorough set of studies that have begun to characterize the way that this compound works. Some of those data were presented last year at the American Headache Society and other meetings.

Neuroscience is an area of particular focus for Merck; it’s an area in which we’re putting a lot of effort and resources, and where we think there’s a lot of unmet medical need and an opportunity to make a difference. For me personally, it’s an exciting place to work, because a lot of the things that when I was in training, we really knew very little about and didn’t understand how to approach, we now have potential treatments for and can begin to imagine really making a difference in patients’ lives.

That’s personally gratifying, and it’s also a tribute to where the science is, and I think also the commitment that the industry generally – but Merck particularly – is willing to make in an area that’s been historically difficult to work in. Frankly, illnesses like schizophrenia and depression have been quite stigmatized, and it’s a good thing that Merck is willing to commit to these areas because there’s a huge patient need, and huge need for the families of these patients in terms of having better treatments.

David Michelson is Vice President of Clinical Neuroscience and Ophthalmology at Merck & Co., Inc. He joined the company in 2006. Prior to joining Merck, Michelson was an Executive Medical Director at Eli Lilly. While there, he held positions of increasing responsibility, starting as a clinical research physician and working his way to Senior Medical Director, before being named Executive Medical Director in 2003.

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microfluidic systems that are not accessible to other approaches providing new information about biological systems.

With Lauerence Pelletier of Mount Sinai Hospital and Cathy Owen of Nanopoint

The latest on live cell imaging NGP. Over the past decades, advances in live cell imaging have dramatically transformed the biological sciences. What have been the most critical of these advances, and how have they affected the field?

LP. By far the most important discovery was the work in the laboratories of Shimomura, Chalfie, Inoue, Tsien and many others that led to the structure, expression and finally optimization of the autofluorescent proteins. Live cell microscopy would have remained in the hands of a small number of skilled cell biologists had not these groups devised a simple way to use molecular biology to tag vital proteins in living cells. Gene products can be localized not only structurally, as we had with antibody technology, but also dynamically within living cells. With this technology, it is now possible to place virtually any biomolecule in the context of structure and dynamics; that is, within space and time.

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CO. Providing tight control of the cell environment is one of the most critical factors in successful live cell imaging experiments.

Robust on-stage environmental controls along with automated perfusion of media ensure the viability of live cells when investigations require extended time lapse imaging sequences, and when serial addition of a drug and/or reagent must be accomplished without disrupting the cells. The technique of imaging live cells on the microscope stage is improved with the emergence of synthetic fluorophores and fluorescent proteins to serve as qualitative and quantitative reporters of intracellular structure and dynamics. In key areas of drug discovery, such as screening of compounds and preclinical testing of drugs in living cells, microfluidic systems make a useful contribution, and represent an improvement on existing technologies. Novel reaction, manipulation and analytical steps can be performed with

NGP. What special challenges are involved in live cell imaging, as distinct from other types of imaging?

CO. It can be argued that optical microscopes, cheap and readily-available computing power, sophisticated image analysis software, megapixel digital camera systems and a plethora of highly specific fluorescent tags mean that live cell studies today are rather straightforward and easy. There are still some technical challenges however.

One of the most significant challenges for performing successful live cell imaging experiments is to maintain the cells in a healthy state and functioning normally on the microscope stage for an extended period of time while being illuminated in the presence of the fluorescent tags. Some live cell experiments, such as documenting the slow growth and reproduction of cells, may last for many days.

In this case, just keeping the cells alive is a challenge that many live cell imaging workstations cannot meet and maintaining cells in an optimum physiological condition throughout the long observation phase is critical to the success of those experiments.

LP. In most applications, imaging is limited by dynamic range, detection and signal-tobackground. In most cases these can be

“Providing tight control of the cell environment is critical in successful live cell imaging experiments� overcome by increasing exposure, making the signal brighter by increasing the illumination on the sample, or by changing the chemistry around the targets of interest. In live cell imaging, the biology has to drive the experiment. The timing of events and cell viability limit the exposure that can be used.

Cells are stressed by exposure to light and the physiology within the cell will only tolerate so much manipulation.

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The intent is generally to understand cell biology, not the biology of a dying cell. It is not enough to image the cell into apoptosis.

Another challenge is the storage and the analysis of complex phenotypes using automated means. Again we will see different fields join forces to get at the problem (physics, optics, cell biology and informatics) NGP. Why is it important that researchers from different disciplines interact to ensure progress in the field?

CO. If we are ever to achieve the goal of personalized medicine, it’s critical to move to a more ‘systems-biology’ approach to research. Understanding the complexity of human disease and providing novel therapeutics requires the commitment of an interdisciplinary team of biologists, engineers, physicists, chemists, mathematicians, physicians and computer scientists to tackle the difficult technical challenges.

In addition to our interdisciplinary team,

At the Samuel Lunenfeld Institute, Mount Sinai Hospital, Toronto, Laurence Pelletier’s lab studies cell cycle regulation of centrosome function and cilia formation in specialized cells. Functional genomics and cutting-edge live-cell microscopy are used to identify and study novel proteins required for these processes and elucidate their role in development and diseases

Nanopoint's extended time lapse live cell imaging solutions have been developed utilizing collaborations with reagent companies, biomedical researchers, and microfluidics experts. These types of collaborative partnerships enable new types of cellular

“The systems that consistently yield superior results are built on knowledge, research and experience” experimentation that are essential to understanding complex human diseases, accelerating developments in stem cell research and pharmacogenomics, and breakthroughs in new treatments.

LP. We see more and more labs from a variety of disciplines making use of live cell imaging.

Cathy Owen is CEO, President and Director of Nanopoint. She brings more than 30 years of executive leadership, general business and entrepreneurial experience to Nanopoint. She joined the company in 2004 after a successful 21-year career at IBM, executive management of a Silicon Valley startup and president of a Hawaii software startup company.

Fifteen years ago, the field was limited to a handful of skilled microscopists and bioengineers. Now, virtually every field of biology uses live cell imaging. It is only through collaboration that scientists can adapt methods from all disciplines to optimize these experiments and to push the boundaries. The latest work in imaging borrows heavily from astrophysics, signal theory, spectroscopy and even quantum physics.

NGP. Working with and imaging live cells can be a complex task for microscopists who are unfamiliar with the process. What tools and techniques are available to help?

LP. Good instrumentation and mentorship!

The systems that consistently yield superior results are built on a lot of knowledge, research and experience. Good companies are constantly making improvements to every aspect of their imaging systems to optimize them for imaging living cells. Secondly, I would highly recommend one of a number of excellent courses available for learning these techniques. Some of the top microscopists in the world regularly take the time to teach at these courses and there is no better way to quickly assimilate all that is needed to do these experiments well.

CO. Nanopoint has developed a tightly integrated system that provides new standards of precision and levels of efficiency for the study of individual and small groups of live cells, enables new approaches for multiple cell analysis and simultaneous processing, and supports multi-day time lapse imaging of live cells. The system integrates lab-ona-chip technology fabricated from glass which increases the number and types of applications the cellTRAY can be used for.

Glass offers the low thermal conductivity and optical clarity that is ideal for live cell imaging applications. The cellTRAY Manager software provides the navigation, camera, shutter and filter controls, autofocus, and microfluidics control necessary for today’s demanding live cell imaging applications. The user can automatically acquire images and save those images for further analysis by third party products such as ImageJ, MetaMorph, ImagePro, CellProfiler and others. n

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EXECUTIVE INTERVIEW

The advantages of SPECT vs PET Staf C. Van Cauter on how imaging techniques measure up.

NGP. What are the major disadvantages of using traditional invasive techniques to study models of human disease in small animals?

SVC. While animal experimentation remains central to our understanding of human disease-related processes and the biological effects of many substances, it is quite unfortunate that most experiments still rely heavily on invasive techniques requiring animals to be sacrificed for histo-pathological assessment. This is done to track the progression or regression of disease over time, or to determine the levels of toxicity in specific organs or tissues. However, these invasive techniques fail to provide details of how a disease develops or how a substance elicits its effects. Non-invasive imaging techniques on the other hand allow diseases, and responses to substances, to be monitored in-vivo, over time.

One avoids sacrificing animals and obtains more information from fewer animals, thus increasing the statistical validity of the data by reducing the level of experimental variation.

NGP. How can PET and SPECT provide the sensitivities required to obtain the same physiological imaging acuity in small animals as can be obtained from humans?

SVC. The ability to penetrate tissues makes PET and SPECT imaging techniques suitable for both small animals and humans. Results obtained in small animals can be translated to a clinical setting in humans. However, there is one big challenge: a mouse is more than 1000 times less massive than a human. In other words, mice are at least 10 times smaller in each dimension than humans.Therefore, if imaging studies in mice are to be ‘equivalent’ to human studies, the spatial resolution of an animal scanner must be about 10 times better than a human scanner. Typical human scanners achieve resolutions of six millimeters or less in humans. The scaled-up resolution to achieve anatomical parody for a mouse is one millimeter, or in volumetric terms, in the nanoliter range. This can only be accomplished by using the new generation nanoSPECT and nanoPET scanners.

imaging through multiple small pinholes simultaneously so that high resolution can be maintained but sensitivity increased by the number of pinholes. While this sounds like a straightforward and simple approach, major challenges in terms of image acquisition and tomographic reconstruction had to be overcome to reconstruct 3D images without introducing artefacts.

Staf C. Van Cauter is Executive Vice President of Bioscan Inc, Washington, DC. Prior to joining Bioscan, Van Cauter was Corporate Vice President and Chief Technology Officer of Packard BioScience Company. He served as a strategic consultant to PerkinElmer from 2001 until 2003.

NGP. What are the critical shortcomings of PET and SPECT devices?

SVC. While small animal PET and SPECT systems are among the most sensitive molecular imaging devices, there is always a trade-off between sensitivity and resolution. A typical example is the use of pinhole SPECT systems which is the most common method used to image animals with high resolution. The smaller the pinhole, the better the resolution. Unfortunately, the detection sensitivity goes down by a factor of four with each halving of the pinhole size.

Only recently has this major shortcoming been overcome in the nanoSPECT systems by

NGP. What are the advantages of using SPECT over PET tracers?

SVC. While both techniques offer exquisite sensitivity, the use of SPECT rather than PET tracers has the advantage that they are widely available from a mature radio-tracer distribution network.

For a wide range of applications, researchers can often use the so-called ‘shake and bake’ kits to make a range of useful compounds in-house.

This eliminates the need for an expensive onsite cyclotron/radiochemistry production facility typically required for the use of PET tracers.

The use of SPECT tracers is therefore relatively cheap, and the longer half-lives as compared to PET tracers make SPECT well suited, if not required, when biologically active radiopharmaceuticals have slow kinetics.

NGP. What new systems are available to help overcome the sensitivity vs resolution trade-off?

SVC. Bioscan Inc (Washington, DC), a company which is totally focused on small animal molecular imaging systems, has recently introduced a range of nanoPET and nanoSPECT devices that make it possible to overcome the resolution vs sensitivity trade-off. For NanoSPECT, multi-pinhole SPECT imaging is used to avoid the loss of sensitivity when one decreases the size of the pinholes to improve resolution. For NanoPET, very high density crystal detectors are used with 256 simultaneous channel photo-multiplier readouts. This approach is similar to high-definition TV where the density of crystal detector pixels present in the LCD screen determines the image resolution.

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LAB SAFETY Ji Zhang, VP and Head of International Clinical Operations at sanofi-aventis, on ensuring safety and efficacy in clinical research.

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here are a few challenges facing the company, and the industry at large, at the moment. One is that trials are becoming more complex; the number of patients we need is much larger than before and treatment duration is also longer. So clearly, the burden of running clinical trials is much higher than before.

Second, we pay particular attention to both safety and efficacy – safety in terms of not only collecting and analyzing safety information, but we also need to focus on how do we design clinical programs to be able to assess safety much more effectively than before and improve the capability to detect potential signals earlier. For example, in the past trials were designed with greater focus on efficacy; now we put greater emphasis on safety and patient outcome measures.

Third, we need to enhance quality in performance. Those of us working in the industry have confidence about the quality and robustness of our trial data, and the conclusions and inferences drawn from the development program – which consists of multiple trials – because we know how we set up the trials, select and train investigators, and perform ongoing monitoring and quality assurance.

In addition, we go through quite a few inspections and audits, both internally and externally.

Our submissions and trials go through multiple reviews – those of the FDA, PMDA, EMEA and other agencies. But that’s not enough.

Since medicine is for the public, not only should we have a confidence in our products ourselves, but we should also bring the same confi-

Quality control

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dence to the public, so that every patient, and every public official has the same confidence in the medicines we develop, and is fully aware of the efficacy and safety profiles. We will need to continue to enhance and perfect our quality assurance program, and build higher quality in our processes and executions.

Worldwide

partners with our colleagues in clinical sciences and our colleagues in regulatory (both internal and external), for example, to work towards simplifying our study protocols.

We need to be more proactive in managing the relationship with sites, which is fairly complex. It’s not a usual provider/customer relationship. We have the same goals; we all want to develop medicines for patients. Not only do we as sponsors need to be accountable to the outcomes, it’s also important to bring the same awareness to our investigators about the concerns and requirements of the FDA, the EMEA and other regulatory agencies on clinical trials. We need to be at the same level of awareness, the same level of operational excellence, and at the same level of accountability towards patients.

We need to bring more awareness of our research effort and clinical trials to the public and to the patients. Participation in clinical trials remains very low in many parts of the worlds, beyond Asia-Pacific and intercontinental regions, even in many European countries. We need to reach out to patients and their families about the potential benefits and risks associated with participating in trials, how patients’ rights are protected, and their admirable role in developing new medicines and improving healthcare. We Ji Zhang is VP and Head of International Clinical need to remember that the patient is not Operations at sanofi-aventis. He is a member of abstract, she/he may be you or me or our the research and development board, directing family members. worldwide clinical operations on research sites In terms of managing safety, I think in 30 countries. His responsibilities include the knowledge base in reviewing safety, in study management; patient management and monitoring safety, needs to be elevated. monitoring; data management; and biostatistics.

With improved education, knowledge and monitoring methodology on safety, we can do much better in the assessment of safety.

Sanofi-aventis sponsors clinical trials conducted in North America, Europe, Asia and other regions around the globe. We’re currently doing fewer trials exclusively in the US; instead, our international trials include many US sites as well as international sites.

As with other research institutions, we have gone beyond Western Europe and North America to significant involvement in Eastern Europe, Asia Pacific and South America. We have some presence in the Middle East and Africa, and are in the process of growing further in this region.

In our development programs, we have used a few partners, including working with CROs. We have contracted an entire program or trial to a CRO; and we have contracted a region or country to a CRO that may have a particular expertise there.

China is a very important country, where one has the challenge of obtaining regulatory approval in a timely fashion. The government there is making some progress toward a timeline that’s more in line with the rest of the world, but they still lag behind. We have done very well in China; we are able to prepare our operational teams early. After we obtain approval, we initiate the sites quickly, and make up some of time lost by achieving a higher rate of enrollment. Therefore even with a shorter recruitment period, we are still able to recruit the targeted number of patients in China. This has been a success story for us.

Some of the challenges we see, where we think there is a potential for us to do better, involve countries like India and Brazil. These countries hold great potential, and we have come a long way in there over the last several years, but we are far from achieving even a fraction of the potential. There is also potential for growth in several European and South American countries.

Future focus In the past, we may have focused more on the operational aspects of trials. Along with the challenges of recruiting patients, retaining patients and ensuring quality, we need to be more active

New operating models You see different companies taking slightly different approaches. We’ve seen several companies taking a model where they keep many of the core skills internally while operational activities are done through third parties, strategic partners and/or functional service providers.

Sanofi-aventis, in the last several years, while depending on our internal resources to carry out clinical operational activities, also supplements our internal resources. We realize our internal resources have limitations, so we strategically partner with certain CROs and service providers, not only for monitoring but also for data managements and central services.

This partnership with CROs, whether it’s on one end of the spectrum or the other, will be necessary for clinical operations and clinical research to advance clinical development successfully. n

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CROs offer efficient outsourcing

By Dave Champagne, Vice President and General Manager, Informatics, Thermo Fisher Scientific.

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ith investments nearing 15 years and costs approaching $2 billion by the year 2010 to bring a new drug to market, pharmaceutical companies are increasingly in search of internal and external processes which help them deliver a return on investment (ROI) during the patent life of the drug.

Big pharma has been moving towards a crossroad and faces the prospect of no longer having blockbuster drugs as their mainstay product. Instead, pharmaceutical companies are investing in biologics to fill development pipelines, consolidating R&D efforts in similar therapies through mergers, purchasing generics companies in countries like India, while continuing to invest in their core expertise and meet ever increasing regulatory approval standards.

One way to improve the odds of discovering the elusive blockbuster is to increase the number of promising drug candidates under investigation. Outsourcing to a contract research organization (CRO) with specialized expertise can provide the necessary ROI in financial terms and time savings.

Using informatics North America currently accounts for 60 percent of the global CRO market, and there is simultaneously a strong and growing CRO presence in emerging markets, especially in China and India (combined market value of $7.3bn). These Asia-based CROs offer a significant financial advantage to pharmaceutical companies seeking capacity in the drug development process. Data obtained and used for determining critical toxicokinetic and pharmacokinetic parameters should be compatible for CROs and sponsors so that final reporting to regulatory authorities is not at risk.

Working with CROs, it is important that full compliance with industry regulations such as GLP and FDA 21 CFR Part 11 is maintained.

To comply with this rule, security of electronic records needs to be ensured to allow for electronic signatures to be treated with the same level of importance as handwritten signatures.

For those companies utilizing the services of CROs, the need for secure and reliable bidirectional data review is now a strategic part of global growth plans, as this determines how CRO and sponsor will work together and how successful the relationship will be.

Sponsor and CRO alike need a solution that delivers purpose-built functionality, making their workflow as efficient as possible.

They need a solution that facilitates reliable and secure communication of data, so that study results are not in question when final reports are submitted to regulatory agencies.

Improved and secure data transmission between the CRO and sponsor company, reduced costs from stored inventory and improved time to market result. This secure exchange of digitized data on a global level improves business decision-making.

John Allinson, Director at Veeda Clinical Research, an Anglo/Indian CRO with headquarters in Mumbai, comments: “Our Indian facility alone tests nearly 200 samples per day per instrument and we currently have three laboratories worldwide which handle 4.5 million samples, moving towards 9.0 million samples per year. Watson LIMS allows us to automate a sampling system previously undertaken manually. This has been a significant factor in our use of labor resources and will enable us to increase our capacity.�

Thermo Scientific Watson LIMS is used by 18 of the top 20 largest life sciences companies, so most major drug submissions filed at the US FDA have been exported from the standard reports provided by Watson, which is recognized as the de-facto industry standard.

Conclusion Pharmaceutical and life sciences sponsor companies that utilize the services of informatics-compatible CROs in the emerging markets of India and China position themselves to manage costs and improve their time to market, and increase their chances of finding the next blockbuster.

Dave Champagne is Vice President and General Manager, Informatics, at Thermo Fisher Scientific. Champagne joined Thermo Fisher Scientific in April 2003 and has led informatics since April 2005. His career includes 13 years at Lotus Development Corporation and two roles as Chief Executive Officer for early-stage software companies.

Sponsor companies and their CROs utilizing Watson LIMS take a major step towards reducing the barrier to entry for working and selling into these emerging markets. With a long-standing history of successful compliance and use by the top pharmaceutical companies, the FDA will accept more easily the checks and balances for ensuring compliance that are automatically in place with Watson users. Without this secure data capture and transmission process in place, a new drug submission can be denied by the FDA, wasting millions of dollars of research and inventory.

For more information please visit www. thermo.com/informatics. n http://www.contractpharma.com/articles/2008/03/cromarket-view

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CREATING BUSINESS ADVANTAGES IN BIOPHARM

Mike Harrington of Waters Corporation looks at the company’s unique approach to new technology development for an evolving industry.

NGP. Traditional big pharma and biotech companies alike are facing funding issues and increasing competition, and to be successful companies have needed to refocus and reduce costs. How has Waters responded to the changing face of the pharmaceutical business?

MH. Critically – we listen to our customers.

We have focused on designing systems to address the specific needs of the marketplace.

In the biotherapeutics arena, for example, our customers have specific questions they need to answer relating to the character and quality of their biopharmaceuticals. Our analytical systems incorporate the tools that will allow them to answer these questions quickly and efficiently, using software that is

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designed specifically for the task. This gives us a unique advantage as other providers are offering tools designed for proteomics experiments that often are not applicable in biopharmaceutical laboratories. However, creating business advantages for our customers is a multifaceted task and involves helping them reduce overhead, maximize system up-time, adopt efficient workflows, and promote improved visibility of information across their organization. At Waters, we are committed to helping our customers adapt and accomplish their goals during these challenging times.

NGP. As pharmaceutical companies increase their focus on biotherapeutic development,

their analytical needs will change. Can you tell us about the issues your customers are facing and describe where the company has been active in addressing these needs?

MH. As firms increase their investment in biopharmaceutical development, we are seeing a widespread need for re-training of staff and the introduction of new technologies and approaches to drug development.

We are working closely with academic and government institutions to promote education and training in this field. However, the need to drive new research with innovative, ‘breakthrough’ technology is making a really significant contribution, particularly in the area of characterization.

We have responded quickly to the need to continually monitor biotherapeutic product quality, with a new approach to system qualification. This allows our customers to generate reproducible results, routinely, and obtain the same results whether their labs are based in Europe or around the world.

Another issue for many analytical labs working in biotherapeutic quality is how to reduce the time required for processing and annotating LC/MS data. We have found that this is a major factor affecting productivity, so earlier this year Waters introduced new software dedicated to the processing of biopharmaceutical LC/MS data, incorporating functionality specifi c to protein and peptide analysis.

With the move towards better process control and optimization, labs are also showing a growing interest in our tools for multivariate analysis of LC/MS data. The ability to interpret data in a meaningful way can help our customers make intelligent decisions about their processes. I would certainly expect to see this approach more widely adopted over the next few years.

NGP. As in other industries facing such competition, time to market is critical and there is a constant need to speed up analyses and generate results faster. How do you approach the need to improve efficiency in the lab?

MH. Remember that it’s not only reduced run times that will improve efficiency. Reliable sample preparation, reproducible data, automated data processing and system up-time, amongst other factors, will play a

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part. We focus on all these areas in designing systems which are fit-for-purpose in the biopharmaceutical lab; the specialization in our chemistry operations, instrumentation and informatics divisions has helped us significantly in realizing the analytical platforms that we have today.

NGP. In your view, what have been the advances in analytical technologies from Waters that have most significantly impacted the industry?

MH. Our ACQUITY UPLC System platform is a classic example of a ‘disruptive’ technology that has reshaped the liquid chromatography industry with extremely positive results. As a standalone system, UPLC brings the benefits of shorter run times, better resolution and higher sensitivity, but when incorporated into a true application-based system solution, we have a really powerful approach to offer to our customers. We now have UPLC technology-based system solutions for the analysis of amino acids, peptides and oligos, and our customers benefit from a large support network, easy method transfer protocols, and thousands of ready-to-run methods. Due to the complexity of biopharmaceutical analyses and the higher degree of potential variability encountered, we’ve been working towards providing customers with a higher degree of predictability and certainty to generated results, and I believe we have successfully achieved this.

“The application of this technology has saved companies millions of dollars in preventing the waste of valuable product” In March this year, we introduced the PATROL UPLC Process Analyzer, a new system enabling quantifiable, real-time, inprocess analysis directly on the manufacturing floor. LC has not previously been adopted as a PAT technique as the run times required for good resolution are unacceptably long.

However, with UPLC we can reduce hour-long runs down to minutes so that analyses can be deployed in the manufacturing environment.

Mike Harrington, Vice President of Waters European Operations, began his career with Waters in 1987 after completing his Ph.D. in Biochemistry from Trinity College, Dublin. He worked in various sales roles within the UK organization and became a National Sales Manager. In 1996, Mike became the General Manager of the Phase Separations business in the UK. After a 1998 move to the US, Mike served as Director of US Chemistry Sales, and Senior Director of Waters US Sales Operations. In 2006, Mike returned to Europe to assume his current role.

Our SYNAPT HDMS System is another example of a platform that has changed the way our customers work. Obtaining three-dimensional information on proteins was very difficult to do using existing mass spectrometric-based techniques so this technology has opened new avenues of protein structure investigation. Other applications of this technology are saving our customers significant time and money in product development, for example, in pegylated protein analysis. Although PEG is the cheapest component of a final product, it can have a profound effect on the efficacy of the drug and the quality of the therapy, so the ability to quality control batches of PEG is extremely important for the industry.

The application of this technology has saved companies millions of dollars in preventing the waste of valuable product.

Previously they had no means of determining which batches of PEG would be suitable for conjugation to their therapeutic protein, resulting in a wide variation in quality and efficacy. Now, using the ion mobility technology built into SYNAPT HDMS, they can select the batches of PEG that will deliver the highest yield of final therapeutic product, so this has made a huge impact on their business. This is just one example, but we are continually identifying ways in which this breakthrough technology can answer complex questions.

NGP. What have been the keys to your success in this market segment?

MH. Our success has largely resulted from our efforts to thoroughly understand the market and to focus resources in product development and applications development. We have made a long-term commitment to developing products for biotherapeutic analysis and have benefited from good references and a reputation for providing innovative technologies. Our local application and service support is a key differentiator for us; our service organization recently received an excellence award for global services delivery and technical support.

NGP. With the range of potential biotech drug candidates expanding to include antibody fragments, next generation vaccines etc., where will the company be focusing in developing the next generation of analytical instrumentation and applications?

MH. We will do whatever it takes to make our customers successful. By identifying and responding to the common pressures faced by our customers we will continue to make a difference. Labs are driven by accurate, meaningful results – so workflow is, and will continue to be, a very important focus for us. n

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DRUG DISCOVERY

It’s all in the genes Tailoring therapies could improve the way patients respond to treatments, which is why it has become a key part of Lilly’s strategy.

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s we better understand the human genome and how genes influence individual patients’ response to medicines, we are able to use this blossoming knowledge to both discover more sophisticated, targeted agents and ensure that they are used to treat the right patients. This notion of ‘tailored therapeutics’, or developing the right drug for the right patient, has become an important part of Lilly’s corporate strategy. It is driven by the stark reality that medicines today are effective as little as 50 percent of the time and too often present unacceptable safety issues. Pharmacogenomics and sophisticated, novel biomarkers are among the tools that are used to characterize these individual differences. They are increasingly important both in the design of clinical trials and for the delivery of more personalized care in the marketplace.

How a clinical trial subject or patient responds to a medicine will vary in accordance with a variety of genetic influences, ranging from predisposition to a particular disease to how the medicine is metabolized, according to Jack Bloom, Distinguished Medical Fellow at Lilly and leader of their Diagnostic and Experimental Medicine division.

These genetic associations are used increasingly to predict efficacy, guide dose selection and identify patients susceptible to a particular toxicity. They are of even greater value if they can be used to identify practical biomarkers (a protein, receptor, etc) that can be used to predict these outcomes, and thus enable stratification of clinical trial subjects or the development of companion diagnostics for use in the marketplace, according to Bloom. “At Lilly, we put a lot of emphasis on developing thoughtful biomarker strategies early in the development of our candidate drugs. We use these tools to predict efficacy and safety (and therefore the probability that the medicine will be successful) and to differentiate our products in the marketplace. Our goal is to optimize individual patient outcomes, and pharmacogenomics and biomarkers are critical tools for achieving this.”

An important element in implementing Lilly’s tailored therapeutics strategy through, in part, the development and application of biomarkers and related enabling technologies, is strategic partnership development. Transitioning to a fully-integrated pharmaceutical network (FIPNet) is another key part of that strategy. Having the constellation of specialized biomarker and pharmacogenomics partnerships and collaborations that complement those we have with larger CROs (such as vendors providing central lab, ECG and imaging support) has

enabled Lilly to build virtual biomarker research capacity and capability. The groups Bloom support now have dozens of such partners, whose services range from DNA sequencing to validation of novel ELISA assays. They work closely with their internal Laboratory for Experimental Medicine and Clinical Diagnostic Services department, who coordinate these services and provide technical oversight.

Core areas Eli Lilly and Company focuses its research and resources on four core therapeutic areas: cardiovascular disease, endocrine disorders, cancer and disorders of the central nervous system. Some of the areas generating a lot of interest include tailored interventions that relate to thrombosis, Alzheimer’s disease and lung cancer.

The company is developing a novel intervention for schizophrenia, which they hope will follow Zyprexa – the company’s top selling product which had sales in 2006 of over $4 billion. The new treatment targets glutamate receptors in the brain and has thus far not been shown to cause some of the troubling side effects of the atypical antipsychotics on the market. Speaking about this and other innovative candidate drugs in development, Bloom said: “We also have a very replete early phase oncology portfolio, which will continue to be a major emphasis for Lilly, moving forward, and we are developing a number of new indications for our legacy compounds, Alimta and Gemzar.

“We are also expanding our presence in biotechnology (recombinant protein products) and have several very exciting candidate drugs in that portfolio.” Last year Lilly had about $4.4 billion in sales of biotech products, making it the fifth largest biotech company. 

John (Jack) C. Bloom holds a B.S. degree in biology from the University of Pittsburgh and doctorates in veterinary medicine and experimental hematology from the University of Pennsylvania.

He joined Lilly Research Laboratories in 1989 as Head, Clinical Pathology in the Toxicology Division, and in 1991 moved to the Medical Division, where he established the department of Clinical Laboratory Medicine, and later the departments of Experimental Medicine and Clinical Diagnostic Services. Bloom has authored several manuscripts, chapters and reviews, and has edited texts on toxicology and clinical biomarkers in drug development.

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LEAD FEATURE

Eyes on the

prize

Karen Gotting-Smith tells NGP how AstraZeneca stays fighting fit.

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o one can deny that these are challenging times for the use to achieve this? “Our pipeline has continued to be based on our dispharmaceutical industry. With patents running out and ease area strategies,” says Gotting-Smith. new blockbusters thin on the ground – and now the well“We aim to deliver a volume of products across all phases of development publicized financial downturn on top of that – there is a that will enable us to produce those two new medicines a year. Key milestones certain amount of pessimism among inhave included the increase in projects entering early develdustry leaders. opment – 24 new candidate drugs in 2007 compared with 12 The key, according to Karen Gotting-Smith, is not to in 2006; as well as the increase in late stage development – Cancer accounts for rest on your laurels. As Vice President of Business 12 phase III projects currently compared with five in 2006.”

Performance and Continuous Improvement at Gotting-Smith’s new role as Vice President of AstraZeneca, Gotting-Smith should know whereof she Business Performance and Continuous Improvement, speaks. The company has set some ambitious goals for which she assumed in April 2008, has a pan-development its pharmaceutical R&D, despite – or perhaps because of focus, with the aim of aligning all of the development func– the current climate. tion’s improvement initiatives with the company’s business These goals include achieving a median eight-year goals. She is also in charge of reducing development cycle product development cycle for small molecule medicines times, reducing overall costs and increasing quality. and biologics by 2010, and delivering two new molecular A tall order, perhaps, but then Gotting-Smith has the entity (NME) launches per year from 2010. In order to experience to back it up: she has worked in global drug of all deaths worldwide achieve these target NME launches per year, AstraZeneca development for more than 20 years, on drug developeach year will need to ensure that it has 10 or more NMEs in phase ment projects across different disease areas in a range of III development by that time. roles with increasing responsibilities. “I’ve worked across This shouldn’t be too much of a problem for a comall stages of development, from early development to regpany that has been awarded R&D Directions’ ‘Best Early Stage Pipeline’ in ulatory submissions and life cycle management, plus line management exthe industry for the second year in a row. What strategy does the company perience in an organization of more than a thousand employees, and the

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RECENT PARTNERSHIPS Albireo – February 2008 AstraZeneca and Nomura Phase4 Ventures announced the signing of a deal to form Albireo, a company focused on developing new treatments for gastrointestinal (GI) disorders.

Albireo, based in Gothenburg, Sweden, has secured one clinical and a number of pre-clinical GI programmes from AstraZeneca as well as several researchers with extensive experience in AstraZeneca’s GI Research Area. The spinout is a result of AstraZeneca’s previously announced strategic decision to concentrate on Nexium and internal GI research focussed on gastroesophageal reflux disease (GERD).

Cancer Research UK – May 2008 AstraZeneca entered into an innovative new arrangement with Cancer Research UK and Cancer Research Technology (CRT) – the charity’s development and commercialisation arm – to progress into clinical development a potential anti-cancer compound from AstraZeneca.

AstraZeneca’s AZD0424 – a tyrosine kinase inhibitor – is the first drug to enter the charity’s clinical development partnerships (CDP) programme, which enables companies to retain rights to the compound throughout the development programme. The compound is expected to enter phase I trials within the next 18 months.

The need for speed AstraZeneca remains focused on improving R&D speed while maintaining high levels of quality. But why is it important to speed up the R&D process and – more importantly – how will the company go about achieving this lofty goal?

“Companies like AstraZeneca must improve R&D speed and quality both for the patients who depend on our next successful medicine and for our business, which needs an ongoing flow of new products delivered costeffectively,” maintains Gotting-Smith. “The promise of science and technology is greater today than ever before, and if we both maximize and marry the two, we can be one of the fastest and most productive companies in the industry.

“Meeting the goal of two NMEs a year from 2010 has required an industry-leading approach to our portfolio management, a series of disease

“We aim to produce two new medicines a year” area strategies that are medically and commercially attractive, a strong internal and external science base and an innovative and efficient delivery organization. Our focus in each of these areas will continue so that we can continue to deliver innovative new medicines.

“Over recent years we have introduced a process improvement system based around the principles of Lean Sigma, which has significantly reduced pro-

breadth and depth of knowledge from ground level activities through to business level investment decisions have prepared me well for my current role. The ability to identify and communicate the business goals and to challenge the status quo is fundamental to the role.”

She also finds it relatively easy to take a global outlook, having studied in Wales, and worked on registration programs in the US, Europe and Asia. “The benefit of global working and living in different cultures has been the ability to re-energize regularly through having to adapt to the new culture and importantly through never taking anything for granted.This has given me an appreciation for diverse ways of thinking that I may not have otherwise gained. Though after a decade of living in the US and with two very American children, it is certainly home to us as a family now,” she says, laughing.

Karen Gotting-Smith is Vice President of Business Performance and Continuous Improvement at AstraZeneca. In her previous position as Vice President of Clinical Development, Gotting-Smith was responsible for the US clinical development region, one of three regions within AstraZeneca responsible for the design and delivery of clinical development programs. She has more than 20 years of experience in global drug development, both in clinical development and global leadership of cross-functional product teams.

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ject timelines and increased the quality and efficiency of our drug discovery and early development programs.”

Another trend driving change in AstraZeneca’s R&D is the current industry focus on translational medicine, as Gotting-Smith explains: “The collaboration between clinical medicine and basic science is critical to gaining a deep understanding of human diseases, therapeutic targets and the suitability of future medicines. We’ve recruited and developed new skills in the field of translational medicine, focused on the development of biomarkers for our compounds, so that all compounds entering development now have a biomarker strategy. We’ve also developed new techniques and technologies around informatics and modelling and simulation. The adoption of these new approaches in drug discovery and development tie in with the increased quality of our candidate drugs.”

Top job Fast, efficient pipelines alone are not enough to keep a company afloat in difficult times – it’s equally important to look after your staff. AstraZeneca was identified as one of the ‘100 Best Companies to Work For’ 2008 by Fortune magazine. What is it about the company that makes it stand out?

“Multiple factors play a role in making a company a ‘best place to work,’” Gotting-Smith says. “From an R&D perspective, my belief is that we joined the industry to work in important disease areas and to have an impact on bringing medicines to patients, and we have been able to fulfill that goal.

“We foster a working environment that shapes leadership at all levels, encourages the exchange of diverse ideas and an appreciation of delivery and value. The company demonstrates respect for its employees both in and outside of work by providing flexible options like a nearby childcare facility, employee wellness programs and flexible working arrangements such as job-shares.”

As Gotting-Smith points out, the company’s continued success requires access to leading science both within AstraZeneca and through external alliances around the globe. “Our ability to develop our products efficiently, in terms of cost and speed, will continue to improve, as well as our flexibility in adapting to an evolving external environment.” No matter how challenging that external environment gets.

ASTRAZENECA’S GLOBAL R&D FOCUS AREAS ■ CANCER Need: Cancer now accounts for 7.6 million (or 13 percent) of all deaths worldwide each year, and these numbers are expected rise.

Global Focus: Continued growth of Arimidex, further launches and line extensions of newer products such as Faslodex, and the successful introduction of novel therapeutic approaches currently in development, including both small molecule and biological drugs.

■ CARDIOVASCULAR Need: CV disease claims more lives each year than the next four leading causes of death combined, accounting for 17 million deaths worldwide annually.

Global Focus: Growth areas of dyslipidaemia, thrombosis, type 2 diabetes/obesity, atherosclerosis and atrial fibrillation.

■ GASTROINTESTINAL Need: In the Western world, between 10 percent and 20 percent of adults suffer from gastresophageal reflux disease (GERD). The prevalence rate of GERD in Asia is lower but increasing.

Global Focus: Life cycle initiatives for Nexium to gain further market penetration by broadening its use, coupled with innovative research and development of new therapies for GERD beyond acid expression.

■ INFECTION Need: World demand for antibacterial antibiotics remains high, due to escalating resistance and the increased risk of serious infections in both immuno-suppressed patients and ageing populations.

Global Focus: Increasing the sales of the marketed brands Synagis, Merrem and Flumist and bringing new products to market by exploiting its structural and genomic-based discovery technologies and antibody platforms.

■ NEUROSCIENCE Need: Depression and anxiety disorders remain under-diagnosed and undertreated; schizophrenia affects around one percent of the population; 17 million people suffer from bipolar disorder; Alzheimer’s disease affects approximately 24 million people worldwide today; and chronic pain affects over 20 percent.

Global Focus: Further growth of the Seroquel franchise and the successful introduction of a range of life-changing medicines aiming to meet significant medical need in pain control, neurology and psychiatry.

■ RESPIRATORY AND INFLAMMATION Need: Approximately 100 million people worldwide suffer from asthma and more than twice that from chronic obstructive pulmonary disease (COPD), which is currently the fifth leading cause of death in the world.

Global Focus: Growth of key products, particularly Symbicort, new indications and market launches and the successful introduction of novel approaches to other areas of inflammatory disease such as COPD and rheumatology.

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SPECIAL REPORT

Accenture’s Health and Life Sciences Group takes a look at some winning strategies for a turning point in the pharmaceutical industry.

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he term ‘inflection point’ is used in multiple disciplines including mathematics, engineering and business strategy; to describe a point on a curve at which the curvature changes from convex to concave. In business strategy, an inflection point is frequently used to describe a scenario where the dynamics of today’s business situation shift significantly.

Here, we use the term inflection point to indicate the point at which the business requirements needed to compete significantly shift. We must clarify that this does not imply that the fundamentals of today’s model no longer work, but rather that there is a transition occurring, when a new set of rules is being defined to set the stage for a new and different competitive landscape.

Managing this transition is the ultimate challenge for industry leaders.

The experience of a wide array of industries, from airlines to entertainment to retail, shows that new leaders emerge when companies are able to recognize that an inflection point provides the opportunity to create performance differentiation in the future. In making the transition, though, organizations must continue to operate in the world of today, while preparing for the world of tomorrow.

That challenge presents a host of dilemmas, including: • H ow aggressively should companies pursue the future model?

• Should they lead – or follow?

• How do they overcome reluctance to change?

• What capabilities are required to be enhanced or built?

Reaching the

inflection point

The answers to these questions for biopharmaceutical companies will depend on their situation and beliefs. All are confronting mounting evidence of a significant change in the landscape: • A dramatic increase in customer clout as payers consolidate, government becomes increasingly important and patient power mounts.

• D eclining research and development productivity as fewer new blockbuster drugs are developed.

• G rowing competitive intensity, driven by a surge in promotional spend and marginalized customer relationships.

At a minimum, all biopharmaceutical executives need to have a point of view on the future industry landscape, evaluate current capabilities and portfolios, and create a change plan of action.

Critical juncture Our research suggests that the biopharmaceutical industry has reached an inflection point. There is no single approach to developing a strategy to deal with this, which necessitates operating concurrently in two worlds.

Since much depends on a company’s product portfolio, its organizational readiness and tolerance for risk, transition time frames can be very different for each organization.

Any inflection point, however, provides the opportunity to erect the building blocks of high performance and achieve differentiation. A company in an industry at an inflection point can set a trajectory toward industry leadership. Now is the time for US biopharmaceutical companies to seize that opportunity.

Strategies and imperatives As our research shows, biopharmaceutical companies have adopted different responses, as executives begin to recognize the shortcomings of today’s model. While companies are not necessarily creating a single, comprehensive and coherent strategy, some common strategic elements are beginning to emerge.

Our research revealed three general strategies for inflection point success:

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Inflection Point

FIGURE 1: INFLECTION POINT • R eady today’s model by improving critical aspects of the current business model in an attempt to slow declining performance.

• I nstitute new capabilities to drive competitive advantage and boost performance.

• C hange the game by defining new business practices to create a new performance trajectory.

Industrialized analytics In an industry facing the paradox of being awash in data but often lacking in insight, industrializing the approach to analytics offers a means to drive competitive differentiation. It is no longer enough to gather and maintain data on customers, products and promotional activities. High-performance businesses not only efficiently gather and integrate compelling data, they also analyze it swiftly, generate insights from it, make informed business decisions and act.

Many organizations have recognized that they are falling short in this endeavor because: •S enior management does not create a culture of fact-based decision-making.

• Data is not well organized or integrated.

• Analytics capabilities are isolated.

• Decision-makers do not have ready access to tools.

• Companies lack the skill sets to move from analysis to insight.

Regardless of the cause, the result is that far too many decisions are made primarily on the basis of ‘management judgment,’ and a significant amount of analysis results in no action or no change in behavior. Coupled with the fact that data is often weeks or months old, this generally results in a ‘wait and see’ approach.

Building the talent bridge Performance anatomy – the cultural and organizational capabilities, including the acquisition and nurturing of talent – is what powers companies toward their goal of out-executing the competition over the long term. Many executives believe they need to identify new sources of talent. Others are

Change the game

Institute new capabilities

Ready today’s model

Reach and frequency model

Inflection Point

Continue business as usual

Time

convinced that the existing workforce can be reskilled. Our research shows that training and retaining the best talent can increase the likelihood of becoming a top business performer.

Some leading companies are beginning to develop consistent and holistic approaches to business analytics. One way to do this is by establishing more fact-based decision-making processes (that is, portfolio allocation and optimization) that lead to organizational action. This requires adopting a capability orientation that ensures a clear strategy/purpose, well-defined processes, effective use of tools and – importantly – a focus on changing behaviors.

To move their organizations from reporting to insight to action, these companies are using new and multiple data sources to understand and predict opportunities that create a proprietary advantage. Their focus is on anticipating the future, rather than dwelling on the past. These executives are redefining what analytics means and are working to drive insight through execution, moving beyond the achievement of an interesting perspective to a real change in the business and corresponding outcomes.

Some are digging deeper into their analytics to develop the sub-national and customer segment views that make the analysis more actionable. They are using new customer metrics and new valuation approaches and measures. Others are considering a shift in responsibilities for basic reporting and analysis to allow internal resources to focus on higher

value-added insight-generation. The market is changing so swiftly that developing analytics as a driver of action needs to become a continuous process that informs all decisions – not just when the team is setting its annual plan or refreshing the tactical plan.

Large-scale cost removal Pricing pressures and decreasing numbers of new product opportunities are necessitating leaner, more streamlined commercial functions. More attention is being focused on: • Eliminating redundancies in roles.

• Re-engineering/streamlining processes with a customer focus.

• Instituting controls to manage spending.

• Leveraging technology to speed access to information and reduce inefficiencies.

• Seeking synergies across functions.

• Instituting new sourcing arrangements.

• Identifying and outsourcing noncore business processes.

Biopharmaceutical companies are actively assessing their internal organizations and functions to see just where and how they are over- and under-investing. All functions within sales and marketing are under scrutiny, as the value of each activity and function is questioned in the process of streamlining and focusing on customer value. Companies are targeting transactional and noncore functions for removal, scale-down or outsourcing.

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Transactional areas under consideration include sales operations processes, customer inquiry functions/call centers and standard reporting. Noncore functions include enterprise support areas like information technology, human resources and finance.

Pursuing areas individually can result in average cost savings of 20 to 40 percent.

More aggressive biopharmaceutical companies are pursuing outsourcing and/or offshoring arrangements on a global scale – a more transformational cost-removal strategy that has been implemented by a wide range of other industries. They also are seeking partners that they can hold accountable to desired service levels and outcomes while reducing costs.

By identifying significant inefficiencies and implementing large-scale cost improvement change programs, executives are creating capacity to invest in the future.

Companies are able to free up resources and capital to redirect toward core areas of the business in order to drive future growth.

Similarly, 89 percent of respondents reported the same need in communicating with patients.

Multichannel marketing Executives believe that utilization of new, alternative channels is key to supporting future commercial efforts. Developing a multichannel marketing capability is a threestep process. In step one, organizations introduce a new level of integration in which they create integrated brand and channel strategies based on customer preferences, needs, interactions and behavior.

In step two, they put the customer perspective first by executing coordinated tactics across channels to manage both the customer experience and the desired outcome. Finally, in step three, companies measure, assess and refine campaigns based on reactions and behaviors from deployed tactics.

Manufacturers also are being held increasingly accountable for relationships with health care providers, as regulators seek to understand how much a manufacturer has serviced a physician and what the total financial benefit has been. The consequences of noncompliance are signifi-

cant. Since 1992, US $13.9 billion has been recovered through major health care settlements. While the number of major cases in the hospital sector is the same as in the pharmaceutical sector, the trend is definitely in the direction of pharmaceuticals.Total settlements in the hospital sector have been $ 3.7 billion compared with $ 5.8 billion in the pharmaceutical industry.

“A company in an industry at an inflection point can set a trajectory toward industry leadership” Developing a strong commercial compliance capability requires investing in a combination of customer information management, processes, training and supporting analytics to provide a total view of the interaction and relationship with health care providers.

Customer information management capabilities and associated technology solutions like customer master and approval/ workflow software are needed to track and

manage all interactions and financial or value-oriented transactions. Processes and supporting analytics must be crossfunctional, providing marketing, legal and regulatory solutions for improving compliance management. Organizations must put more effort into the development of promotional policies, standard operating procedures, and decision-making processes, retaining a flexible yet proactive infrastructure to allow for anticipated changes in policy and reporting requirements.

The commercial organization must fully understand what it takes to avoid negative consequences of noncompliance as well as maintain a consistent view of what it takes to compete effectively. However, a strong commercial compliance capability can also offer opportunity over the long term. In the future, companies may need state-by-state commercialization approaches to address differences in laws and regulations. This would create an increased level of complexity in the commercial organization that could favor big companies.

More barriers and costs for small pharmaceutical and biotech commercialization efforts might also boost the attractiveness of partnerships. Overall, companies will need to step back and define a comprehensive vision of what their commercial compliance capability will look like. They will need to decide how reactive (or proactive) they want this capability to be, as well as whether or not it will be a differentiator for their organization in the future. n

FIGURE 2: INFLECTION POINT STRATEGIES

Figure 2. Inflection point strategies and common imperatives Inflection Point Strategy

Ready Today’s Model

Institute New Capabilities

Change the Game

Imperatives

Sales Reinvented

Multichannel Marketing

Innovative Product Differentiators

Industrialized Analytics

Commercial Compliance

Patient Relationship Management

Large-Scale Cost Removal

Non-Mega Brand Excellence

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ASK THe eXPerT

The critical role of the industry physician Anabase International Corp. examines the current trend of defining very precisely the role of physicians, achieving cost savings by curtailing them to a few core responsibilities.

Paul-AndrĂŠ de Lame

A

n undesirable consequence of the trend toward this precise definition of physcans’ roles is the increasing isolation of physicians from a number of functions critical to the wellbeing of the products. New products should be designed to address clear medical needs, which are defined by the medical conditions of the patients and the corresponding therapeutic requirements defined by their physicians.

It should be only natural for industry physicians to have a leading role in helping their companies understand the needs of the patients and of their physicians, and in translating this information into a proper product profile, for example, a profile relevant to the needs of the patients and their physicians. Once launched, new products need to be nurtured to optimize

their development, and over time, the management of their life cycle, by addressing changing medical needs and related scientific questions timely and accurately.

Based on a medically sound product profile, a number of actions of business relevance can be executed in a pertinent manner, including market assessments, product feasibility assessments and regulatory and clinical development planning, as well as time and resource budgeting. Even seasoned industry physicians do not have all the skills that are required to address each area fully; only accomplished cross-functional teams do. However, none of the challenges that must be addressed to commercialize a new product to its full potential can be addressed without significant contributions from physicians.

Whether the new product is relevant, usable, its design optimal, its market defined realistically and the penetration strategy optimized are all questions that cannot be addressed without active physician involvement.

External advisors often provide some of the necessary input on a consulting basis. This advice is most often excellent. However, unlike

top industry physicians, they are not available 24/7, and are not an integral part of the process as a whole (or of the product development team, for that matter). In addition, most lack a critical skill set that is relevant to the business side of the industry.

We see on a regular basis companies that attempt to develop their products independent of industry physicians. We have frequently observed that companies relying solely on nonphysicians or on external advisors generate sub-optimal development plans and face more difficult regulatory negotiations and significantly slower market adoption.

This is not to say that MDs on their own perform miracles! It takes a whole team to build a product to its potential. Like any team member, MDs must learn to contribute by first listening to and understanding the issues faced by the team, and being clear about what exactly they are expected to bring to the process.

A condition for the successful integration of MDs in a product development team is that the MDs must learn enough to understand numerous concepts and how they apply to the development of a given product. These include regulatory requirements, principles of protocol design and statistics (including ground-breaking innovations such as adaptive designs), data management, fundamentals of risk and safety management and core promotional requirements. It takes some time to acquire this knowledge, but the resources are there, ready to boost your product launch to new heights. It is time for the industry (and hopefully, healthcare) to value the knowledge and skills of physicians fully, so that their products perform to the maximum of their potential. n

Paul-AndrĂŠ de Lame MD is President and CEO of Anabase International Corp.

He has more than 20 years of industry experience and a broad knowledge of product development, clinical research, and related regulatory issues. He has made a critical contribution to a number of new product launches while organizing multiple research projects at the domestic and international levels.

For more information, please see www.anabase.com.

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CLINICAL RESEARCH

Pfizer’s Diane Jorkasky champions the use of geographically diverse clinical research units to transform the conduct of phase I trials. NGP finds out why.

I

n her role as Vice President for Worldwide Clinical Research Operations at Pfizer, Diane Jorkasky ensures that all exploratory development, clinical pharmacology, translational medicine and clinical technology studies are conducted in accordance with good clinical practice standards and are delivered on time and on budget. Quite a task, but Jorkasky is proud of her team’s achievements in this area.

“We do achieve this far more than one would expect, given the complexity of working with 10 different therapeutic areas, with all of them organized separately. We have many, many customers, and we’ve been able to achieve this through constant interaction with them. We have terrific people within my department who bend over backwards to ensure that the work gets done and that we get things done on time.

“It takes a lot of planning on the part of the staff and the research units. We are very careful about the budget and making sure that we are as efficient as we possibly can be in keeping costs to a minimum, and we have brought in a high degree of technology that takes away much of the human component that’s often required in research settings. So we don’t have to worry about quality assurance anywhere near what most companies have to, because we bake all of this into the infrastructure systems that we have.”

In her current position, Jorkasky oversees all phase I studies for Pfizer, with the exception of oncology, and all clinical pharmacology studies independent of their stage of development, including small early proof of concept studies. Most of these studies are conducted

in three clinical research units, located in Singapore; New Haven, Connecticut; and Brussels, which act as one unit with three locations under standard procedures, policies and principles.

“The greatest challenge I face in this position is ensuring that the in-house resource is utilized to its maximum,” she says. “This means some flexibility in the way one schedules. The other challenge is trying to overcome people’s resistance to the concept of working at global sites with which they may not have had firsthand knowledge.

The resistance is overcome with demonstrating performance with a strong emphasis on frequent communication.

“The challenge is continuing to support R&D at a time of enormous pressure on the healthcare system”

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Innovation

Jorkasky has championed the highly efficient management of global clinical research units – CRUs – all of which deploy state-ofthe-art technology to drive progress forward.

How have these radically transformed the conduct of phase I trials?

“We are able to do very complex studies across all three units simultaneously, to the same level of medical integrity, with the same level of standardization of the quality of the methodology involved, the assays, the evaluations by the medical staff and the nursing staff, and we have a standardized database that’s a technology coupled with a disciplined

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behavior by our staff such that everything is done according to the highest standards.

“This gives us a phenomenal opportunity to be innovative, because if you collect your data in a way that is standardized, no matter what those data are, you can still have great degree of flexibility in evaluating it. If you can collect that data in a way that allows you to do anything with it, you have a great capability that goes beyond what any other company is able to do. As a result of that, the big innovation that we’ve been able to accomplish is that on a moment’s notice, for example, we can tell exactly what the adverse event rate is among phase I volunteers across every study conducted.”

Jorkasky says this allows researchers to tell, day-to-day, what the latest subject count is, and this can be parsed out according to where that subject is in the world, what kind of pharmacological agent they were exposed to, whether they were on placebo and whether they were on a biologic. Pfizer has found this to be so valuable that they are working with the NIH to have all the data analyzed and published, since this information is lacking in the literature.

Equality Behind every exciting new discovery are the men and women who made it happen. While many women work as researchers and in other roles in the pharmaceutical industry, as you move higher up the ladder, the representation of women and people from diverse background tends to dry up. For this reason, Jorkasky, as an advocate for the Women’s Leadership Network, has been an enthusiastic supporter for greater roles for women both within Pfizer and elsewhere.

“The pharmaceutical industry is trying to improve its track record in ensuring opportunities for women and diverse candidates. Across the industry, probably the majority of employees are women, and yet as you go to the higher levels of organizations, you will see far fewer women than you will men. In most companies, women make up less than 30 percent – sometimes less than 20 percent – of the top echelons of the company.

“There is a huge amount of work still to be done in this regard, and the unfortunate thing is that the industry loses out by not having that female perspective at the table. Women are the major care providers across the world and the ones who will often remind folks to use our drugs and to make sure medical care is achieved. We don’t even think about the impact that not having women at the table within our industry has on our products in the marketplace.”

Where next?

The pharmaceutical industry is at a crossroads, with extraordinarily high attrition rates, and there are many attempts to get that next big breakthrough that leads to increased productivity. The cost of doing studies is rising, along with the expectations of those studies in terms of the quantity of data collected and the safety of the drug in the minds of regulators and the public.

“The challenge we all face is continuing to support R&D at a time of enormous pressure on the healthcare system, including this industry,” Jorkasky says. “We are looking at how we do business and what we need to dramatically change to continue to bring medicines to patients.

“We’re going to see tremendous flux in all companies, where they start to work more in a virtual way with a variety of suppliers and vendors and support organizations, including CROs. We’re going to see stronger decision-making on what drugs should not be taken forward, which I think is really important to an organization’s survival. The sooner you can stop a drug that’s not working, the better off you will be. And we will see smaller, leaner companies, more virtual in their operation than what we’re seeing today.” 

Diane Jorkasky is Vice President for Worldwide Clinical Research Operations at Pfizer. She is responsible for ensuring that all exploratory development, clinical pharmacology, translational medicine and clinical technology studies are conducted in accordance with good clinical practice standards. She has been instrumental in providing the leadership and the vision of Pfizer’s clinical research units (CRUs), which have radically transformed the conduct of phase I trials.

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ASK THE EXPERT

Driving efficiency and cost-effectiveness How the efficiency and cost effectiveness of cardiac safety studies will be enhanced in the near future. By Tosja K. Zywietz, Director R&D at Cardinal Health Research Services Germany.

R

ecent examples of drugs withdrawn from the market due to their potential to cause life-threatening cardiac arrhythmias have driven the need for more careful cardiac safety studies to reach market approval by the FDA. However, drug development costs have reached a level that is hardly affordable for the pharmaceutical industry. It is therefore essential to reduce these costs, while increasing the accuracy of cardiac safety trials for the benefit of patients.

The cardiac safety market is at a turning point, with new technology and analysis methods looking set to drive a significant efficiency gain in the industry. Over the last three years we have invested a lot in new technology specifically designed for cardiac safety trials. We have not just developed

Tosja K. Zywietz, Director R&D Cardinal Health Research Services, started at his commercial career with The Boston Consulting Group as a strategy consultant. He holds a PhD in theoretical physics from the Fritz-Haber-Institute in Berlin. Over the last few years, he has gained extensive experience in developing new technology and methods for cardiac safety trials.

specific hardware (ECG resting and Holter recorders), but have also spent a lot of time researching ways to improve the quality of our automatic, CRF21 Part 11 compliant analysis tools. On the software side, we have focused on the main cost drivers in the industry, and managed to achieve a significant cost reduction in cardiac safety ECG trials for our customers. This would not have been possible without significant investments in technology and efficient processes.

As mentioned above, our first step in enhancing the efficiency and effectiveness of cardiac safety trials was to develop new hardware to meet the specific needs of trials.

So far, mostly standard equipment designed for hospital use is applied – this is sometimes difficult to handle, and does not meet trial requirements, such as enhanced usability, reduced set-up time and ‘above standard’ recording quality. Our new Holter and resting ECG machines meet these requirements,

“The cardiac safety market is at a turning point, with new technology and analysis methods looking set to drive a significant efficiency gain” In order to look at the main cost drivers of cardiac safety studies, it is useful to consider a standard thorough QT (TQT) study. The technology applied is of course an important cost driver. For an ECG intense trial, this can make up a significant portion of the overall budget. Just think of a multi-center trial where hundreds of Holter-ECG-recorders and 12 lead ECG devices are needed, including the set-up, and maintenance and the training of study nurses to use the equipment. Also, a lot of back-end technology is needed for data security, processing and storage.

However, the main cost driver is the manual over-reading of the recorded ECGs. Today, most of the over-reading is done by highly educated core lab staff, which takes a lot of time and is therefore expensive, especially for 24-48 hour Holter recordings.

Usually, several thousand ECGs have to be evaluated. This is by far the most expensive part of any TQT or other cardiac safety studies. Interestingly, we see a lot of potential to reduce the cost with our new technology, optimized for clinical trials.

leading to lower cost while at the same time increasing reliability of results.

Second, we have made a big investment in automatic ECG analysis in our ECG core lab, and this will significantly enhance efficiency and cost effectiveness. Our automatic analysis has reached a level of sensitivity that is capable of supporting our cardiologists in a way that allows us to save a lot of time for over-reading and validation. In principle, we are already able to do a large part of the analysis fully automatically, instead of manually. Only the ‘critical ECGs’ will have to be analyzed fully manually in the future.

However, the sponsors will need to be convinced that our new method is even more accurate than the fully manual approach of ECG analysis. We will shortly apply our technology in a large pilot trial, to quantitatively prove the sensitivity of automatic ECG measurements and analysis.

We are sure the pharmaceutical industry will quickly adapt to our new technology – to the benefit of patients, resulting in significant cost savings. n

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Lessons

learned Genzyme’s Larry Blankstein looks at the challenges of completing global clinical trials on time and effectively.

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enzyme’s clinical research programs are focused on inherited lysosomal storage diseases, renal disease, orthopedics, cancer, transplant and immune diseases, diagnostic and genetic testing. As Senior Director of Clinical Research, Larry Blankstein has clinical operations responsibility for the endocrinology business unit. He has been actively engaged in a number of drug-drug interaction phase I studies, as well as thorough QTc studies in Genzyme’s other business areas.

For Blankstein, ensuring the company’s resources are being optimized across studies is an important focus. “As certain studies slow and begin to wind down, while others are entering phase III, we have to make sure our resources are utilized efficiently across studies,” he stresses. “The challenge is to make sure that we’re maximizing both our internal resources as well as our external ones in terms of their utilization and effectiveness.”

One of the most interesting developments happening has been in ultra-orphan diseases.

The initial technologies deployed were enzyme replacement therapies where patients would receive IV infusions every other week. These were very successful and worked well. However, new small molecule technologies are beginning to make an impact, which means that subjects can take a pill and may not have to come into a clinic, infusion unit or a hospital every two weeks or so.

“This is one of the advances we’re seeing in this area,” highlights Blankstein. “We are expanding our platforms into other areas.

For exam-

Larry Blankstein is Senior Director of Clinical Research at Genzyme.

Blankstein has more than 20 years of experience in pharmaceutical and biotechnology drug development. Prior to joining Genzyme, he was Executive Director of Program Management at Quintiles.

ple, we have a drug used in bone marrow transplants and for multiple myeloma. We’re also looking at using this in other indications for chemosensitization assays and chemosensitization treatments. We’re using drugs that we once used to treat cancer to treat multiple sclerosis. At Genzyme we are focused on expanding our science and technology platforms to treat orphan indications or larger patient population with unmet medical needs.”

An important lesson Blankstein describes how applying a ‘lessons learned’ process early on and throughout a development program will help the study team perform at a much higher level and be much more effective and successful at completing a trial. The key is trying to understand by

using lessons learned what the challenges are for a project team as they work through a large global study. “It is important to use a lessons learned process throughout the study so the team is regularly understanding and managing team issues,” he advises. “In many situations, lesson learned are performed at the end of a project, which is often too late. By then, everything has happened.

“It’s important to identify issues that are affecting team performance early in the project so they can be dealt with immediately, so as the team progresses through a global trial they have a greater likelihood of meeting the study’s challenges and achieving success. With global trials, the goal is to complete them on time and on budget with a high level of quality to increase the likelihood of approval. Having a project team not proactively manage issues as they develop on an ongoing basis through the study can lead to significant delays and poor quality.

A timely, effective lessons learned process can help avoid many of these issues.”

Future goals Completing its clinical trials on time and efficiently is another focus for the company.

Genzyme has four key clinical programs, and Blankstein believes the company has done well to organize itself around these programs and adjusting resource allocation to focus on completing them on time.

“If the company is successful in doing this, then it will continue to contribute to the growth of Genzyme,” he explains. “Over the next 12-18 months, we will emphasize these key programs, keep our focus on them, but not forget other pro-

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jects that are in pre-clinical, phase I or phase II that are also important for our long term growth.

We have a level of resource and funding for these programs as well, so when we complete the key projects others will move up in priority. We also have a very active business development focus that looks for acquisitions, partnerships and mergers, to add to our pipeline so Genzyme can

continue to provide important treatments for patients with unmet medical needs.”

In the clinical research area, Blankstein sees a number of developments ahead. He believes there will be a move towards more outsourcing models. “The traditional concept of companies like Genzyme having a large clinical staff that can manage and monitor all of their trials is

changing. Companies are moving more towards outsourcing certain operations so they can focus on their core competencies with a staff that is much more experienced in how to outsource and manage service providers successfully. By doing so the relationship between the sponsor and the provider can be maximized to bring the greatest potential.”

GENZYME’S RESEARCH AREAS free, metal-free non-absorbed phosphate binder on the market.

tation treatment for relieving knee pain associated with osteoarthritis.

Adhesion prevention Oncology Genzyme’s oncology program is building a foundation in cancer treatment with a strong focus on antibody and small molecule therapies.

Genzyme currently has two marketed leukemia products, Campath (alemtuzumab for injection) and Clolar (clofarabine) for intravenous infusion. The company is also focused on new treatments for cancer patients through both internal research and external collaboration.

Genetic disease Genzyme is recognized as a global leader in research, product development, and outreach to the medical and patient communities for rare genetic diseases known as lysosomal storage disorders (LSDs). In 1991, the company introduced the first product ever approved to treat a lysosomal storage disorder, Ceredase (alglucerase injection).

Since then, Genzyme has developed a second-generation Gaucher disease product, Cerezyme (imiglucerase for injection), and introduced Fabrazyme (agalsidase beta) for Fabry disease, Aldurazyme (laronidase) for Mucopolysaccharidosis I (MPS I) and Myozyme (alglucosidase alfa) for Pompe disease.

Renal disease Genzyme is enhancing the treatment of chronic kidney disease with its phosphate binder, Renagel (sevelamer hydrochloride).

Nearly all patients on hemodialysis take a phosphate binder which, before Renagel was introduced, was typically aluminum or calcium-based. Renagel is the only calcium-

Transplant/immune disease The field of transplantation medicine has evolved rapidly, particularly where management of acute organ rejection is concerned. While in the past, organ loss often occurred one to two years after transplantation, the introduction of drugs such as Thymoglobulin (anti-thymocyte globulin, rabbit) has significantly improved the success rate of these surgeries.

Orthopaedics Genzyme is a leader in the field of orthopaedics, with a promising group of products on the market and in the development. The leading product in this area is Synvisc (hylan G-F 20), a viscosupplemen-

The company has developed a suite of biomaterials used to help improve the outcome of certain types of surgeries. Its Sepra line of hyaluronic acid-based products has been clinically shown to reduce the incidence of adhesions following general abdominal and gynecologic surgical procedures.

Cardiovascular disease Genzyme is a pioneer in exploring both gene therapies and cellular therapies as potential treatment modalities for serious cardiovascular diseases. With clinical programs employing both therapeutic methods, Genzyme is focused on treating ischemic diseases characterized by inadequate blood flow and poor cardiac function.

Diagnostic products and services Genzyme Diagnostics, through its partners and distributors, offers a novel line of products for the diagnostics industry and the clinical laboratory. The company continues to develop new tests for diagnosing a variety of indications including heart disease, diabetes, pancreatitis, infectious disease, emergency medicine and women’s health.

Genzyme Genetics provides reproductive and oncology diagnostic testing services. In the area of reproductive testing, the company focuses on technology that will allow information to be provided on a range of diseases from a single patient sample.

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Seizing China’s pharma opportunity

China’s pharmaceutical market is growing by upward of 20 percent a year, but global drug companies still must capture its full potential. By Franck Le Deu, Rajesh Parekh, and Claudia Süssmuth-Dyckerhoff.

F

ew people would dare call China the sick man of Asia. But a surge of ‘diseases of affluence’–including diabetes, breast cancer, and cardiovascular disease–is among the unfortunate side effects of a booming economy. Demand for drugs treating these and other health problems, combined with a rising level of income, is enlarging China’s pharmaceutical market by more than 20 percent a year and creating attractive opportunities for global pharma companies at a time when rates of growth in key European and US markets are decelerating (Exhibit 1).

While some multinational pharma companies are projecting nearterm revenue growth of more than 30 percent a year in China, none have captured the market’s full potential.

In a recent survey of almost 1,600 Chinese hospital doctors in 38 cities, we found evidence that companies are having trouble dealing with the magnitude of the country and the fragmentation of the industry and the market. While almost all major global companies have a presence in China’s largest and wealthiest cities, for instance, few have completely penetrated them. The impact of the multinationals is especially patchy in rural areas and smaller cities.

What’s more, few products have achieved critical scale. Among the portfolios of the leading pharma companies, we estimate that only 12 drugs achieved more than $50 million in sales in China in 2007; about 80 percent of the multinationals’ products generated less than $10 million in revenues apiece.

To serve China effectively, multinational pharma companies must start thinking big. They should put more resources into tailoring (and probably expanding) their product portfolios to meet China’s growing needs and develop a distribution strategy that deepens and broadens their reach. And to create the bigger sales forces needed to support this effort, they will have to find and nurture new sources of talent.

A dose of change To some extent, the failure of multinationals to penetrate China’s pharma market is hardly surprising. Until recently, they considered the country a secondary market because of its relatively low commercial prospects and concerns over the protection of intellectual property. In the past, many multinational pharma companies brought prescription products to China only several years after their launch in other markets. These treatments often competed against local generics that had already won regulatory approval. Competition from local players remains fierce in the generic and over-thecounter (OTC) segments alike.1 But with China expected to rank among the top five global markets for pharmaceuticals by 2012 – and with demand for innovative patented drugs growing fast – new opportunities beckon (Exhibit 2).

Intellectual property protection is improving as both the Ministry of Public Security and the State Food Drug Administration (SFDA) clamp down on phony drugmakers and even some reputable companies that don’t respect patent rights strictly. In 2006, the SFDA shut

“To manage the increasingly complex logistics of expansion, companies should consider a pilot approach, including a two-year roadmap for expanding into new territories initial objectives”

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EXHIBIT 1: A GROWING DEMAND down over 1200 drug and medicalequipment makers for producing fake or low-quality goods. The government, meanwhile, increasingly supports patent protection and has refused, to approve generic products if patented molecules are on the market.

Even China’s currently insufficient insurance coverage, another hindrance to commercial success in the prescription drug market, may be improving. Sales of many prescription drugs depend on whether they are covered by the government’s Basic Medical Insurance (BMI) program, an urban insurance scheme funded by contributions from employers and employees. To date, the program covers roughly 25 percent of the urban population, or 160 million people by 2006 estimates.2 The government plans to

A growing demand Size of China’s pharmaceutical market,¹ $ billion 41 29

15

2006 Estimated Rank within top 10 prescription drug markets globally

9

2010

2012

Forecast 5

5

1Excludes

over-the-counter (OTC) and traditional-Chinese-medicine segments; data reflect ex-factory price, ie, price of drug as sold by pharmaceutical company to distributor; includes hospital and retail channels.

EXHIBIT 2: PATENT GROWTH

Patented growth

Size of China’s pharmaceutical market,1 $ billion

CAGR, have universal coverage by 2020 how2006–12, % ever, and by 2012, 85 percent of the 41 Total 19 population should have some kind of health insurance (Exhibit 3).3 Encouraged by the prospects of 37 Nonpatented3 13 14.5 the local market, many international 7.8 pharma companies are including 13.8 7.6 3 China in their global launches. Bayer 28 0.7 4 Patented 0.2 2006 2003 2012 Schering Pharma and Bristol-Myers Estimated Forecast² Squibb (BMS), for example, went that route in their recent global launches of Patented drugs’ share 3 5 10 Nexavar (for renal cell carcinoma) and of total market, % Baraclude (for hepatitis B), respectively. Yet most global pharma companies 1Excludes over-the-counter (OTC) and traditional-Chinese-medicine segments.

2Market forecast is based on ex-factory price, ie, price of drug as sold by pharmaceutical company to distributor. have yet to address the principal chal3Nonpatented defined as prescription drugs with no patent protection, including generics; patented defined as prescription drugs with patent protection in China. lenge – understanding and mastering 4Compound annual growth rate.

China’s large and highly fragmented Source: IMS Market Prognosis, IMS Health; McKinsey analysis market – at all seriously. Pharma sales vary widely among regions, and even within them, depending not just on the income levels and reimburseexample, both Johnson & Johnson’s low-cost, mass-market OTC prodment status of their consumers but also on the treatment practices uct Motilium, for gastrointestinal disorders, and BMS’s expensive of physicians and the level of local competition. Companies struggle breakthrough drug Baraclude, for hepatitis B, earn healthy revenues. to understand these differences in the dynamics of markets, in part Although most companies are not naturally equipped to produce because data on them is lacking. Some companies, we find, may define and sell all kinds of treatments, any company that wants to take full market segments inconsistently and therefore have product portfolios advantage of the opportunity in China should aim to cover three key that often fail to meet local needs. categories: innovative and patented products, branded generics, and OTC drugs. Most multinationals will stress newer innovative products A suitable portfolio already in their global portfolios, for there is growing demand in China

While some companies have captured demand in the niche prescription or mass-market OTC segments, few manage to grab both, and few pharma products have achieved significant scale. The characteristics of drugs that succeed commercially range a good deal; for

4

for drugs in this highly profitable segment. Nonetheless, they make up only a narrow portion of the overall market, which is dominated by branded generics addressing major diseases, such as diabetes or liver cancer. (China accounts for 50 percent of all liver cancer cases in the

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EXHIBIT 3: TOWARD UNIVERSAL COVERAGE

Toward universal coverage Millions of Chinese people insured Basic Medical Insurance (BMI)

Urban Cooperative Medical Scheme (UCMS)

Rural Cooperative Medical Scheme (RCMS) ~700

400

relations with doctors. Another option is to partner with one of the increasing number of local companies that have achieved commercial success in niche disease areas. In addition, multinationals should pursue opportunities to create entirely new OTC categories.

Getting a grip

As companies enter new treatment categories, they will ~250 ~210 have to develop more sophisticated 160 marketing and sales capabilities.

10 Creating a proper segmentation is 2006 2012 2006 2012 2012 2006 particularly tough in a country where • Employer sponsored • Covers urban residents • Covers rural population almost 160 cities have more than • Expanded from 38 million in • Low coverage level without BMI coverage one million people each, and several • First rolled out in 79 pilot • Full national coverage 2000 to 157 million in 2006 • Reimbursement level cities in 2007 expected in 2010 (such as Shanghai, Shenzhen and • National rollout by 2010 continues to improve Chengdu) have populations above 10 million. Although some leading multinationals already cover upward of 150 cities, they have yet to gain a significant foothold outside the world.) Chinese consumers prefer strong brands even if the products three wealthiest (tier-one) metropolitan areas: Beijing, Shanghai and behind them are generics.

Guangzhou, which together account for 21 percent of the pharma Given the plethora of local generics producers, only companies with market by disposable income. 4 Perhaps more important, these giant critical scale and capabilities should compete in this category. We have seen some niche patented specialists attempt to enter the brandedcities are home to some of China’s leading physicians, whose opinions generics segment, only to fail because they could not devote sufficient influence health care throughout the country. resources to their products. The OTC segment, though equally competiThe roughly 36 tier-two cities, representing 37 percent of the tive, is less exposed to the pricing constraints that the government puts market, are arguably as important. Although global companies have on prescription drugs. stepped up coverage here, their penetration can be patchy. In tiers One way to fill gaps in a portfolio is to in-license products for China one and two alike, multinationals have relied on sales representatives and other Asian emerging markets that tend to have similar needs. A to build relations with key physicians in large hospitals but neglect to company might, for example, approach either local pharma companies target their colleagues in mid-and smaller sized ones (Exhibit 4), many or multinationals that have little or no presence in China – perhaps of which rank among the most commercially attractive opportunities.

Indian or Japanese companies, which often boast strong formulation To reach them, a company should expand their sales force and use it in capabilities. Bayer HealthCare’s recent purchase of the exclusive mara more targeted way. keting and trademark rights for Insugen, an insulin product made by the Such expansion efforts will also help multinationals broaden their Indian company Biocon, exemplifies that strategy. reach into the 600-plus tier-three cities (like Lanzhou and Ürümqi), Another alternative for multinationals would be arranging to sell which are mostly in the interior5 and largely represent virgin territory products of small US companies that lack an Asian presence; AstraZenfor them. These cities too offer long-term growth prospects that could eca, for instance, holds a license to sell Cubist Pharmaceuticals’ bacteimprove a global company’s competitive advantage. rial antibiotic treatment Cubicin. This and other recent deals suggest that players looking for opportunities to fill product gaps will have a Going deeper higher chance of success if they pair up with smaller pharma companies To go deeper into the primary markets, multinationals should aim and biotech companies. to reach more departments in the hospitals they target and increase Acquiring a local company with complementary capabilities may the frequency and quality of their sales reps’ visits to those departbe attractive, too, especially as Chinese companies strengthen their ments. Our survey found that in 2006, sales representatives on avermarketing and sales operations. Acquisitions of companies that have age visited half of the physicians in large cities once a month and the enjoyed commercial success in niche OTC segments could be particularother half not at all. Such practices hurt sales – we found, for example, ly appealing, since Chinese consumers tend to self-medicate for minor that physicians were more likely to try a new product if they received at ailments. The operations of China’s OTC makers also tend to be more least two visits from pharmaceutical sales reps. More frequent visits transparent than those of some producers of generics and patented help the companies to inform physicians more fully about new and drugs, and product promotions depend more on brand building than on existing products and to build better relationships.

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Our research also highlighted the untapped potential of smaller hospitals in large cities such as Guangzhou and Shanghai: we found that 71 percent of the physicians working at such hospitals see more than 20 patients a day, whereas less than half of their colleagues at large hospitals see as many. We noted that, in general, the more frequently physicians interacted with patients, the more prescriptions for primary-care drugs they wrote.

The development of China’s new community health centers in large tier-one and -two cities presents another opportunity to reach deeper into the market.6 These centers – in effect, small hospitals – are part of a government-led initiative to provide more alternatives for primary care, thereby alleviating the crush of patients in large hospitals. There are signs that the centers will play an increasingly important role in the health care system. In Beijing, for instance, they now provide treatment and insurance coverage for a variety of chronic diseases, such as hypertension, diabetes and stroke.

To take advantage of these opportunities, global pharma companies need more on-the-ground representation. Besides improving the segmentation of physicians and increasing the frequency of visits to them, companies should upgrade the training of sales reps in primary markets, where more innovative treatments require greater knowledge of products.

Going broader

“Companies will find it almost impossible to meet their growth ambitions without building up their sales forces at the same time”

To date, many multinationals have avoided China’s smaller cities because it is hard to identify the most commercially attractive ones and coordinate complex distributor networks. Another worry is that short-term profits in these areas will lag. But while significant sales of innovative, more expensive medicines will probably remain limited to the wealthiest 50 or 60 cities (and to even fewer for high-priced therapies), smaller cities offer strong markets for high-quality OTC treatments and older prescription medicines, as well as long-term growth for prescription drugs generally.

Tier-three cities have 43 percent of China’s total urban wealth and 42 percent of its total sales of drugs in hospitals. Some of these cities (such as Suzhou, near Shanghai) are wealthier on a per-capita basis, though smaller in population, than most tier-two cities. What’s more, the largest 100 hospitals in tier-three cities use as many innovative drugs as hospitals of comparable size in bigger cities do, and their physicians on average prescribe as many drugs.

A handful of multinationals have tapped this market with representatives who specialize in tier-three cities, though most companies rely on intermediaries, such as distributors, to reach the physicians who work in them. This model cuts costs but prevents companies from controlling their sales channels. It makes more sense to create a specialized sales force to target large hospitals, where most pharmaceutical sales in these cities are made.

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Whether companies target this opportunity as they expand in the tier-one and -two markets will depend on their resources. But reaching tier-three cities may be easier than it seems, for they have only about 450 large hospitals, accounting for 16 percent of the country’s total pharmaceutical market. To manage the increasingly complex logistics of expansion, companies should consider a pilot approach, including a two-year roadmap for expanding into new territories and regular assessments of progress toward initial objectives.

To determine which areas to prioritize as part of a ‘go-broad’ strategy, executives should assess each city’s macroeconomic data and relevant healthcare infrastructure. Regional differences in the practices of physicians are also a critical factor in geographic expansion: for example, our survey found that physicians in the north were less likely to use innovative drugs than those in the south.

Investigating the percentage of the population with Basic Medical Insurance (BMI) is critical too, since our research indicates a strong correlation between that kind of coverage and a physician’s willingness to prescribe innovative drugs. Since the government’s healthcare policies are still in flux, using the available market information to estimate the potential growth of the population with BMI will be a challenge.

Tier-three cities close to primary markets could well have more allure. For them, a company could employ a ‘hub and satellite’ strategy that would leverage its existing sales force, distributor relationship, and (where relevant) investments in OTC advertising. That strategy would also help raise the productivity of the sales force: prescription patterns influenced by leading physicians in hub cities might cascade into the hinterland.

The difficulty in harder-to-reach places will be getting sales reps to serve in them and finding skilled distributors or training new ones. A few companies have begun experimenting with the use of distributors rather than sales reps to execute key promotional activities. It should soon be clear whether this strategy works.

One risk of expansion is managing the productivity of the field force in remote areas. Sales reps must carry enough pharmaceuticals in their bags to be productive, but some companies don’t have portfolios with enough offerings suitable for markets outside the major cities. The dilemma reinforces the argument for adjusting product portfolios.

Building capabilities Expansion will take more than just reconfiguring product portfolios and targeting new markets. Companies will find it almost impossible to meet their growth ambitions without building up their sales forces at the same time. We estimate that global pharma companies, to meet their growth aspirations in China, must add at least 11,500 representatives in all by 2011, from the 2006 base – on average, an increase of over 18 percent a year. Sources of talent are limited, however: the lead-

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EXHIBIT 4: TARGETING THE SALES FORCE Targeting the sales force Percentage of Chinese hospitals in sample regularly visited by sales representatives from multinational pharmaceuticals 50

23

52 Size of hospital

75

Medium, 300–500 beds

18

13

11 250

234

23 13

Tier 1

Tier 2

1,594

16

90

160

117 Small, <300 beds

193

306

169

Large, >500 beds

Number of hospitals in sample

11

Tier 3

City tier

Source: 2006 McKinsey survey of ~1,600 Chinese physicians associated with hospitals in 38 cities

ing medical schools graduated 6200 students in 2005, for instance, and specialized pharmaceutical colleges only 3900. Not all graduates wish to become sales representatives, and competition is fierce for the ones who do. Hiring from local companies can be problematic, since their commercial practices and compliance standards may not meet international ones.

Salary inflation and the race for perks are driving churn rates of up to 25 percent a year, so most sales reps have less than two years’ experience at any one company. Even the best-performing multinationals have turnover rates of around 15 percent and must constantly train new representatives. Companies must therefore invest more in their human resources in order to mine the talent pool and manage the candidate flow effectively. Instead of relying on the limited number of graduates from medical and pharmaceutical schools, for example, companies should consider broadening the type and number of universities they tap for talent. For some products that don’t require extensive medical expertise, recruiting and training high-potential undergraduates may be an option.

As global pharma companies compete against their local rivals for sales reps, they should emphasize attractive employee value propositions. Since frontline sales managers serve as models for the rest of the sales force, an effective operating approach would strongly emphasize their training—with onboard instruction, rotating positions (including stints outside of China), and perhaps the financing of executive education. Novartis, for example, sends high performers to the United States and promotes them when they return home. Multinationals must also create new roles and incentives to retain these managers and keep them in each position long enough for them to perform effectively; in

Total sample

other words, companies shouldn’t fall into the trap of promoting managers as often as every 18 months. Such efforts will help to lure new sales reps and retain existing ones.

In less than a decade, China will be transformed from a secondary pharmaceutical market into the world’s fifth largest. Companies aiming to capture a large chunk of it must build stronger capabilities to better identify and meet China’s changing health care needs – adjusting product portfolios, expanding wider and deeper into key cities and devoting more attention to the competition for talent.

Getting information Quality of data is always a concern in China, but a wealth of information is available to companies that know how to find and use it. Market information for any city can be acquired by tapping into a number of available public sources, including the Ministry of Health’s annually updated database of all hospitals in the country.

The database includes key data points, such as hospital beds and consumption of Western drugs. To map future growth, companies might also use sales reps and distributors to collect data at the hospital level.

Many companies have yet to use these information sources fully, and most don’t use them consistently: for example, different business units of a single company may not have the same criteria for categorizing tier-two and -three cities. Investing in analytical capabilities and building systematic definitions are critical to achieving competitive advantage in China in view of its fragmented market and rapid pace of change. n

1 Traditional Chinese medicine is a highly fragmented market dominated by local companies, including many state-owned enterprises. Traditional medicine accounts for roughly 8 percent of hospital doctors’ prescriptions by value.

2 According to official statistics, roughly 50 percent of the rural population in 22 provinces receives health care through rural cooperative medical schemes, though coverage is thin.

3 A product’s coverage under Basic Medical Insurance is further complicated by a requirement that the drug be registered under China’s list of reimbursable drugs. Companies must exert considerable time and effort to make their products candidates for the list. Although the government aims to revise it every two years, in practice four to five years elapse before a new one is issued; the next update is expected to begin in 2009. Even after a product makes the national list, several years usually pass before that product sells in significant quantities, because once the national list is issued, local governments may need two years to implement it. (Provincial governments can change the drugs on the list by up to 15 percent.) Another two years may pass before a significant number of physicians begin prescribing the drug. Although multinationals are powerless to speed up the process, they can ensure that they have sufficient means to support products along the way.

4 China’s cities are generally classified into tiers based on factors such as population and per capita income. We define tier-one cities as those whose populations had a total disposable income above 100 billion renminbi in 2006. Tier-two cities have a total disposable income greater than 18 billion but less than 100 billion renminbi. Tier-three cities have a total disposable income of less than 18 billion renminbi.

5 China’s wealthiest regions lie along the coast. Some cities in the interior, such as Chengdu and Xi’an, are relatively wealthy, but most of those in the central and western areas fall in the tier-three category.

6 The central government began experimenting with community health centers in the mid-1990s, partly by converting small hospitals. The private sector has also financed the establishment of centers. They tend to employ about six general practitioners and nine nurses and to have five to 50 beds.

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HEAD TO HEAD

Knowing your market The latest on pharmaceutical market research, with Geoff Arbuckle of TARP and Patty Klingbiel of Connell + Associates.

NGP. What factors do pharmaceutical companies need to consider before undertaking a product launch or branding exercise?

GA. Every brand pharmaceutical product will experience an initial launch uptake phase, a more moderate growth phase and eventually a controlled – if you’ve prepared – decline phase. A comprehensive plan will include, but not be exclusive to, the following major considerations. In portfolio planning, what investments should be made across the company’s portfolio of products? In new product planning, what are the quantifiable opportunities that will determine resource allocation? In commercialization planning, what resources will be required to maximize the potentials of the prioritized opportunities?

In brand product management planning, what are the dynamics of the intended entry market and competitive product set? And what is the commercialization plan, at the operational level, that will be executed to ensure success? In contingency planning, how will unpredictably poor product performance be measured, reported on, diagnosed and responded to? In life cycle planning, which strategies will extend the product’s overall performance and value to the market the most?

PK. In the case of a product launch or a brand renovation, the most important factors to understand are: customer needs (functional/ emotional), key decision drivers, and an understanding of how your benefits align to these needs and drivers versus competition.

A comprehensive needs map – for the physician and the patient – helps to ensure that your product and brand are operating within the landscape of relevant customer needs. If done properly, it will get past the obvious and include those needs which are latent, or unarticulated. Equally important is determining which of these needs, and their corresponding benefits, disproportionately drive customers in the product and brand choices that they make.

Finally, you’ll need to intersect this learning – with where your product and brand have permission to go. This ‘permission’ can be based in existing perceptual strengths, product advantages and/or by positioning your brand around a highly relevant category benefit that competition has left unclaimed.

NGP. What services do you provide to ensure this target is reached?

PK. Our services focus on ensuring that a brand’s strategy is speaking to the right target in a way that is relevant and uniquely compelling versus competition. We work with clients to define who the right target is – and then to define a relevant and action-driving brand strategy against that target. We define success as getting to the strategy that can both persuade the target and drive the target to take the right action (physician and consumer).

Ultimately this action is about delivering meaningful business impact (not just ‘reaching’ the target, per se – but ‘impacting’ the

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Geoff Arbuckle is Vice President, Healthcare and Business Development at TARP. He is an accomplished healthcare professional with 17 years of experience, and a marketing, sales, and business development leader with outstanding record of maximizing revenues. He has held senior management positions with a recognized global consulting firm and one of the world’s largest healthcare conglomerates.

Patty Klingbiel is the President of Connell + Associates, a customer insights and brand strategy consulting firm. Patty has more than 17 years of brand marketing, general management and consulting experience with particular industry expertise in healthcare. She has held senior leadership roles at Procter & Gamble (OTC Healthcare), MerckMedco (now Medco), Medsite (now WebMd), and the Zyman Group.

data is less useful. Finally, technology is becoming the great equalizer and has globalized patient opinion, perception and experience.

PK. I’ll speak to two market research factors that are unique to the pharmaceutical industry. The first factor is that we are often trying to understand and influence physician behavior. We don’t subscribe to the idea that you can’t get deeply inside a physicians’ heads to understand more latent needs. We’ve found physicians remarkably open to trying more creative research techniques, if you effectively and credibly engage them.

The second factor is that it’s not uncommon for a pharmaceutical brand to be managed in two pieces (physician and consumer) rather than holistically. While this may not seem like a research issue at the face of it, we have found that this can lead to a bifurcated insights program that misses the important connective tissue between what the doctor thinks and does in relation to the brand, and the ultimate impact on the patient (in both strategy development and brand equity tracking)

GA. It costs five times more to convert a new physician or win a new patient than to keep current ones. Eliciting and more effectively addressing complaints from patients can lead to double-digit improvements in patient satisfaction scores and reductions in risk costs.

TARP is the world’s leading physician and patient experience agency and research consultancy. For more than 35 years, we have worked with many of the world’s largest pharmaceutical companies, such as GSK, Merck, Roche, Johnson & Johnson, Pfizer and Eli Lilly, pioneering the science of quantifying, managing and optimizing the physician and patient experience.

NGP. What innovations will be making an impact on pharmaceutical market research in the next 12-18 months?

GA. Social media will continue to have a dramatic impact on the pharma industry, because it is further behind than others in developing significant and reciprocal relationships with its end-users, and because it is one of the most highly regulated in the world today.

A good number of pharma companies have entered into the world of social media, although most tepidly and over-cautiously due to the regulatory governance which controls and dictates how they interact with consumers.

Pharma does need to embrace social media, and present itself transparently and genuinely to the power of these networks, in order to foster a real and reciprocal exchange of information. However, if pharma attempts to manipulate, control, disseminate marketing messages, or execute traditional marketing tactics within this new technology realm, consumers will globally expose their disingenuous efforts to all.

NGP. How does market research for the pharmaceutical industry differ to that of other industries?

GA. At one time, market research for the pharmaceutical industry differed greatly in the following ways: (1) it needed to be measured and reported in real-time, or as close to real-time as possible; (2) it needed to be hyper-granular, because of pharma’s ability to affect the smallest of segments; and (3) until recently, with new technologies and changing markets, pharma’s research often came from liaison segments, and not the ultimate end-users of their products.

Today, most industries demand real-time measurement and reporting. The pharma industry is operating more lean and is not as capable of affecting the smallest of segments. The industry has reduced the size of field sales personnel, which may mean that hyper-granular

PK. In terms of market research innovations and trends, we believe there will continue to be a migration to the web for qualitative.

While we generally do not use the web for traditional focus group research (due to the trade-off involving non-verbal communication), we routinely use an online qualitative chat method imbedded in wquantitative research.

This helps us to understand the ‘whys’ behind some of the key quantitative metrics, in real-time and in a targeted fashion (the chats are targeted at respondents who answer a certain way). We find it leads to more robust and actionable implications on the back-end, because we don’t just understand the static metrics, but also the more dynamic rationale for how the consumer, or physician, arrives at those metrics. n

target and, ultimately, the business). To this end, our consulting services include customized insights solutions (qualitative, quantitative) in service of strategic marketing and brand outcomes.

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RECRUITMENT

Chances are, many of the best people will already be employed elsewhere.

With the war for talent raging as hard as ever, it’s highly unlikely that you’re going to find many qualified people either out of work or obsessively scanning the job pages. The logical answer is to go after those executives who aren’t even looking for a change of career and make them an offer they can’t refuse. This where the headhunter comes in.

The name itself conjures some exotic and shadowy images. But what’s the reality and how do these hunters go about capturing their prey? NGP tracked down two international professionals, Ulrich Ackermann of Transearch International and Sylvain Dhenin of CTPartners. Here’s what they had to say.

NGP. What are the most important qualities you look for when finding candidates? Does this vary between different industries and markets?

UA. True excellence goes beyond industries. Great leaders need empathy, the quality to energize others. They must be consistent.

They have to walk the talk and they must show a clear and proven track record of delivery. All this should ideally be done in an open and honest way.

SD. I mainly work for large international groups, and obviously there are some differences between our clients. We are looking for people who have the drive, energy and charisma to understand the business and be good from a technical point of view but also lead teams, drive people and be transformation agents. I don’t think this varies so much from one industry to another. Our clients are always looking for transformation agents: people who are able to lead the business and drive teams and make decisions.

The word ‘international’ makes a lot of sense, and the international experience is now more and more typical because firms are becoming more and more global; what they really need is an international profile that has the ability to understand different cultures, to spell into an international environment, to manage people with different origins. That’s crucial now for leaders in order to move up into their own organization. Quite often, when you’ve worked in different countries, it’s now a significant advantage to take larger responsibilities.

Hunting

season

If you’re looking to fill a high-level position in your organization, where do you start?

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ULRICH ACKERMANN Sector specialization: Consumer goods, financial services, IT and professional services, auto industry, board services Job function specialization: C-suite, consulting firm partners Clients: Adidas, JPMorgan Chase, IBM, PricewaterhouseCoopers Ackermann is Managing Partner of TRANSEARCH International Deutschland GmbH, Managing Partner of TRANSEARCH CETRA Consulting GmbH and Member of the Board of Directors of TRANSEARCH International Partners PLC, London. Since 2001 Ackermann has served as a member of the board of directors of AESC (Association of Executive Search Consultants), New York and since 2007 he has been the Chairman of AESC Deutschland.

NGP. Can you talk me through the process of your work? How does the process unfold from when a client approaches you looking for a particular candidate?

SD. When clients approach us, we define the qualities and skills that are required for their particular position: strategy, what the candidate will have to bring to the table to be successful and so on.

In agreement with the client we define a list of companies where we might target potential candidates. Our research team will do that with new technologies – mainly the internet, databases, etc. At the same time, we will source the market, which means approaching people we know and asking them who they would recommend for the role. After all that research, usually a number of names will come up a number of times, as a result of being recommended either by the market or being well known. Then we approach those people directly.

We contact them by phone and then we meet them in person to discuss the opportunity and their skills. After that, we introduce a short list of about four candidates to our clients for them to consider. We drive the interview process and also discuss the offer we made at the end of the process. At the same time we will obviously take references on the different profiles in order to give the right advice to our clients. We do reference checks and verify regular information such as educational background, and so on.

In the meantime, during the search process or after 40 days we do an audit of the assignments, or a partner from another office will call our client in order to make sure they’re happy. This is quite specific to our firm. We’ll ask if the communication is right, if the resources are right, if the candidate’s online with his expectation and so on. The

SYLVAIN DHENIN Sector specialization: Professional and IT services, manufacturing and energy, private equity, technology, telecommunications Job function specialization: CEOs, business unit managers, HR, partners, CIOs Clients: Capgemini, Alstom, Areva, IBM, Thomson Dhenin is Managing Partner of the Paris and Geneva offices, Vice Chairman and a member of the Executive Committee with CTPartners, the performance-based executive search firm committed to performance, quality and results. Dhenin has a 10-year track record of serving clients in the technology, professional services and private equity industries, and is active throughout Europe. He has recruited CEOs, CFOs, CIOs and other senior-level executives. He has also assisted private equity firms in management due diligence.

client will give us a rating between one and 10 for those criteria, and the team will be paid accordingly.

UA. We immediately dig into the question about what kind of tasks has the ideal candidate had to tackle, what kind of results is he or she supposed to reach during the next three to five years. What is the state of the company, what kind of challenges is the company facing? What are the immediate changes to be kicked off, what should the company look like after three to five years? Once this picture is clear, we deal with the question of what kind of personality is most likely to deliver such kind of results. This set of information gives us the base to confidentially contact the right level of candidates. In intense individual discussions, we will find out whether they qualify for this set of requested qualifications and challenges and whether they can develop a passion to deliver such kind of results.

“People today are smarter, better educated, more demanding, and the best people have a lot of offers” Ulrich Ackermann

NGP. Do you think leaders are born or made?

SD. That’s a big, philosophical question! There are some qualities that are very personal: either you have them or you don’t. Of those qualities, it’s the drive, energy, charisma and ambition that are things you cannot learn. I think you can learn how to lead people and manage efficiently, so there are some things you can learn, some you can’t.

UA. Without a huge portion of talent you will never get the chance to be a great leader. Likewise, without good coaching, mentoring and being given chances to excel you won’t get there. Finally, without dedication, passion and a commitment for true and long-term delivery you will not stay for long on top of the leadership ladder.

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NGP. Have the qualities valued in Csuite candidates changed over the past decade? If so, how and why do you think this is?

UA. I think that next to the aforementioned qualities some additional personal traits play an ever-growing role. These are qualities of forming and motivating great teams, understanding the firm’s role in corporate social responsibility, relishing change and truly caring about people. People today are smarter, better educated, more demanding, and the best people have a lot of offers. This means that a great leader has to push and to pull at the same time, and present demanding objectives for his or her people.

“Today, the right candidate for a CEO position or a CFO position could be a British guy based in Singapore or San Francisco” Sylvain Dhenin

SD. Companies now need leaders who are loyal and whom they can trust.

Risk management in business is becoming critical as businesses are becoming more global and complex, which means there is a need for faithful and trustworthy leaders. Another point with businesses becoming more global is that a good leader needs to be able to work with different cultures. That’s key for C-suite candidates, as well as having international experience.

NGP. What kinds of challenges are posed when you are searching for talent on an international level?

UA. The fundamental question is whether the new executive is able and willing to really understand the culture of the firm, assess the need for change and energetically drive this change. He certainly needs a good level of respect for the culture and the heritage of the firm. He has to link up with country and people and show that people do matter to him. Quite often, this boils down to the question of whether he is able to communicate with the people in their native language, a problem that is often underestimated, especially in countries outside of Europe.

SD. The executive search market is a global market. It was not the same 20 years ago. Today, the right candidate for a CEO position or a CFO position could be a British guy based in Singapore or San Francisco. This means the search market is now a global market. That’s what is more complex.

NGP. Do you think most executives are worth the money they are paid?

SD. It’s a question of supply and demand. For 99 percent of the

executives, yes, the compensation is justified because they work very hard.

They work 70 hours a week, they travel extensively, and the amount they travel is increasing due to the global nature of business. These people will be traveling for 100 days per year, maybe more: that’s a tough condition of a job that not everyone is cut out for. Those people are also under a high level of pressure because the nature of business is tough today; and on top of that, they are juggling that risk every day. So yes, they certainly deserve to be paid a lot of money. Now, there is obviously a question when you see multi-million dollar levels of compensation, which is certainly for something like 0.1 percent of these top executives. Then it’s usually the decision of the board. So it’s a question I have no answer for!

UA. I strongly believe that the variable portion of the salaries should be equally linked to short, mid-and long-term objectives. Only if there is a bigger focus on the mid-and long-term development of the company, you can expect good results for good money. Despite a small number of exceptionally high salaries that are difficult to justify I think the vast majority of executives with high variable pay systems are correctly paid.

NGP. Are the industries you cover seeing any shortage of talent, or are they over-subscribed?

UA. Most of the industries I serve are seeing a shortage of talent due to the demographical factors and the need for mobile and global thinking leaders.

SD. There is a clear war for talent, and the scarcity of resources at eye level is quite obvious; so it’s becoming a challenging market, basically. n

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EXECUTIVE INTERVIEW

The doctor is in NGP asked Stephen Fox of IMS Health to outline successful strategies for gaining access to physicians.

NGP. What is the most successful strategy today in gaining access to physicians? We all know it’s a major issue, so what do companies do to gain access?

SF. Gaining access to physicians is a key challenge for many pharmaceutical companies. To stand out from competitors they need to provide a valuable service. This could either be in the form of the relationship the physician has with the representative and the information they provide, or it may be other things that the company provides such as access to clinical trials.

Building a relationship is key so that it is not simply salesmanship.

NGP. Is e-detailing the best approach and how does it differ from other detailing methods?

What are its benefits?

SF. E-detailing is one approach that many marketing teams are taking due to the convenience factor associated. Information can be presented in the evening or the weekends, improving convenience, rather than during office hours. It is also of great benefit for those physicians where geographic location makes it problematic to make actual face-to-face visits all the time.

NGP. What is large pharma doing to change its compensation models and how are they ensuring their reps are effectively compensated?

SF. Large pharmaceutical companies have been quite slow in coming up with innovative ideas to change its compensation models to ensure their reps are effectively compensated. However, companies have recently started thinking about innovative measures. One of the ideas is to link incentive compensation to brand strategies.

Nobody has done it yet – I think people are starting to think about it now.

I’ll give you an example. Consider a product where the strategy was to initiation treatment on a specific drug strength and then, if that dosage

Steve Fox has a strong background in pharmaceutical commercials operations. He has worked for three of the largest global pharmaceutical companies, two of the largest service providers to the industry and three of the world's largest consulting firms.

He has a unique mix of a medical research background plus broad business experience and technical knowledge.

was insufficient to manage the disease, the recommendation was to titrate up to double the dosage. However, the representatives are incentivised purely on sales volume. So we look at that and say how can we align the incentive plan with marketing strategy? This can be done using anonymized patient level data by measuring what percentage of new patient starts are at the initial dosage level and then what percentage are switched to the higher dosage level compared to being switched to a competitor.

With the improved quality of data, such as anonymized patient level data and weekly sales data, some companies are talking about how they can use these improved data assets as a way of setting more appropriate compensation plans and then rapidly measuring performance.

It’s very important to understand the physician’s perspective regarding what value they perceive from the pharmaceutical company, their representatives and their products compared to the competition. The CVM score provides insights into customer satisfaction and can also be correlated to prescribing behavior. This then enables companies to truly focus on the relationship and those issues that the physicians consider important. CVM can be measured on a regular basis and we have found that with the appropriate support and resources, the sales increase in line with CVM scores. So I think this is one of the innovative things that’s being done.

NGP. What are the newest compensation models?

SF. I think Custom Value Metrics is probably one of the most interesting and innovative approaches. Surprisingly, something that I’ve seen very few companies take into consideration is pre-existing sales trends. For example, consider if you had a territory that was growing, one that was flat and one that was declining, but all three had the same sales last year; companies that take a ‘sales base plus’ approach to target setting would give the same quota to all three territories. Yet, the territory that is growing would easily exceed target, the territory with flat sales would struggle to reach its quota while the declining territory has no chance of achieving quota. So I think that companies should consider the underlying sales trends when they set quotas so as to create fairness and minimize bias. The overall concept should be to consider local situations when setting quotas.

www.ngpharma.com

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ASK THE EXPERT

Hitting the mark Eric Johnson, SVP at InsiteResearch, looks at changes within KOL Management.

Eric Johnson

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growing emphasis is being placed on KOL Management as a strategic marketing vehicle. The era of adding more sales representatives to increase reach is rapidly coming to an end. Companies are looking for effective alternate channels to deliver their message. Deploying thought leaders is an attractive proposition to meet this need. However, revenue growth within pharmaceutical companies is slowing due

â&#x20AC;&#x153;Creating KOL plans starts with identifying and targeting thought leaders based on well defined segmentation criteriaâ&#x20AC;? to blockbusters going off patent as well as approvals for new products, proving to be challenging. Therefore, budgets are shrinking. State and institutional caps limiting thought leader involvement with industry is gaining ground. How can companies work within these constraints and yet still generate positive outcomes from their thought leader engagements?

KOL Management programs must evolve to help industry overcome these challenges.

New industry trends are focusing on highly complex algorithms and careful planning as well as a heavier focus on managing the relationship with the opinion leader.

Creating KOL plans starts with identifying and targeting thought leaders based on well defined segmentation criteria. I have had the good fortune to work with many companies in order to help them strengthen their targeting and segmentation approaches. At the end of the day, while most companyâ&#x20AC;&#x2122;s approaches vary, there are commonalities among their themes.

First, companies are completing influence mapping to validate and segment thought leaders into tiers comprising, global, national, regional and local. The next step is identifying the domains of strength for these thought leaders based upon historical activities. These domains are typically broken into tactical areas, i.e., publishing, speaking, clinical trials, media, advisory board consultant, etc. Companies are not assuming just because a thought leader has previously engaged in these activities, they are motivated to continue with more of the same. Interviews and exchanges between company representatives and thought leaders identify activities in which the thought leaders wish to engage today are becoming quite popular.

Once identified and targeted as noted above, thought leaders can be further segmented for engagement. This segmentation is typically a motivation segment.

The motivation segment is based upon the engagements in which the thought leader has expressed a desire and willingness to participate. The next layer of segmentation is to identify if the thought leader is skilled or equipped to complete the activities for which they are motivated. If the expressed

area is clinical trials, is the physician equipped to complete clinical trials? If the thought leader wishes to speak, do they have the platform skills to be successful? Finally, there is an engagement level segmentation based upon fee caps for the physician. Can the physician effectively participate in the activities desired based upon the fee cap under which he or she is required to work?

Once the segmentation and targeting are completed, internal teams review needs for thought leader engagement over the coming year and match thought leaders against these needs based upon the analysis of reach, experience, desire, skill level and cap limitations.

While specific targeting and segmentation vary, the common theme is that more structure is being placed around segmentation and targeting. These structured approaches assure that companies are using the right thought leaders in the right role and gaining the maximum benefit while leveraging the smartest spend. n

Eric Johnwson is SVP and General Manager at InsiteResearch. He joined Advanced Health Media in September 2003 as Senior Vice President of the KOL research division, bringing with him over 14 years experience in healthcare technology and business solutions. His current responsibilities include oversight, direction and delivery of all InsiteResearch products and services, for both US and global life sciences customers.

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MARKETING

GROWING

YOUR BRAND Consistency is the key to success when branding is involved. Bill Anderson takes Frances Davies through the highlights from Genentech’s marketing approach.

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enentech has a successful brand architecture in place at each level of its brand system whether it be across its pipeline portfolio, support services, online programs or CRM. Having such a system in place has helped nurture a consistent image of the company for everyone it comes into contact with and has enabled it to maintain a strong identity. The result is that it has a clear direction for how it wants to operate.

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Achieving a strong brand has been accomplished in two ways. Firstly, Genentech has centralized a number of areas, one of which is online marketing. “We have a central function that works with all the brands.

In comparison, a lot of companies either get split off into the brands or if they have a central function it’s not well connected,” says Bill Anderson, SVP Immunology Sales/ Marketing.

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Bill Anderson is Senior Vice President, Immunology Sales and Marketing at Genentech. In this role, he oversees the promotional plans and tactics for Xolair in asthma, Rituxan in rheumatoid arthritis, and Raptiva in psoriasis. His team is also responsible for developing business cases and pre-market plans for the immunology development portfolio and working with business development to source new immunology compounds for Genentech. Anderson joined Genentech in 2006.

The other key has been the company’s culture of collaboration. “We’ve been successful with a part-franchise, part-centralized model because of a real emphasis on this,” enthuses Anderson. “A big part of the Genentech internal culture is that it is a place where people are expected to work with people from other functions. It’s not a place where a war between departments is tolerated and it’s something our leaders model. It allows us to have structures that probably aren’t feasible in some other companies because of interdepartmental squabbling and politics.”

Building a strong corporate brand isn’t always easy. Fundamentally, the problem for many companies is that they don’t have a solid foundation to build a credible brand on to begin with. As Anderson correctly identifies, “A successful corporate brand springs from some natural attributes of that corporation. For example, it would be very hard for a company that doesn’t rank caring for patients high up in its value system to develop a brand around caring for patients.”

Luckily for Genentech, its own image and brands are very strong. The company has always had strong values and capitalizing on these was a natural route for it to take. The company is widely known for its focus on science and doing what’s right from a scientific perspective and, crucially, this is not something that ever started with a branding initiative. “This started with a real commitment from our CEO, our leadership and living this out over a number of years,” Anderson recalls. “It became something that was associated with Genentech;

we spread the message and lived it out.”

The company has established a corporate brand for its coverage and reimbursement support services and patient assistance programs called Genentech Access Solutions.

For those who are uninsured or underinsured, Genentech has different programs in place through Access Solutions to help people get the medicine they need. For example, since 1985 the Genentech Access to Care Foundation has provided more than $1 billion of free Genentech medicine to patients without insurance.

“There was a point in time where we as a company decided that we should take more credit for this,” highlights Anderson.

“It’s something that we were doing that was really good so we thought, ‘Why not build a brand around it?’. Personally, the times that I’ve seen corporate initiatives or corporate brands fail is when they were created out of weakness. For example, a company might

say, ‘We’re not perceived as good at X. Let’s create a brand and maybe that’ll help us improve.’ However, a brand cannot be built on nothing. You have to have something there before you start.”

Brand success Building upon this brand name has resulted in a number of notable success stories for the company. Anderson has been personally involved in three standout examples, the first of which is Rituxan (rituximab). “For almost a decade, Rituxan has been one of the leading cancer therapies,” he explains.

“Once we had clinical success in rheumatoid arthritis, it was then our job to demonstrate the safety of Rituxan to physicians, and teach them how to work with a product that has a different type of dosing profile than they were used to. After a lot of hard work, we’ve now established the role of Rituxan in immunology and it is used by 80 percent of prescribers in rheumatoid arthritis.”

Another product brand that Anderson has been directly involved with is Xolair (omalizumab) which is the only biologic in the world used in asthma. “Physicians are used to inhalers and pills so a product that’s injected is a novel thing and it means that they have to change some of their practice,” highlights Anderson. “We’ve been very successful over the years at helping physicians understand the role of Xolair in treatment, how to fit it

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into their practice and make it work. We’re quite excited as this year Xolair will surpass the half billion mark. Some people said this could never be done in asthma with a biologic, but the future looks really good.”

Finally, Raptiva (efalizumab) has made a great impact for people with psoriasis. The company has employed an effective strategy of looking at niches where Raptiva may have a special benefit; for example, in people with hand and foot psoriasis. As Anderson explains: “It turns out Raptiva is very effective in this difficult-to-treat subtype, so the strategy has helped to create a good place and a role for Raptiva in psoriasis treatment.”

Trendsetters There are certain trends in the pharmaceutical industry that also affect how Genentech’s products are marketed. For one, there is now an increased emphasis in society around the cost of healthcare, with increasing public scrutiny around the price of medicines and the way they are promoted.

“Companies are starting to realize that not everything that scores short-term gains for a product is necessarily good for the company

“It’s something that we were doing that was really good so we thought why not build a brand around it?” over the long term,” says Anderson. “There’s a trend there: marketers are being called to have more of a view on their messages, how they impact society and the view that society has on the company.”

One trend that Genentech sees clearly is the increasing focus of payers, whether private or government-based, on managing the cost of medicines. For example, in the past it was very common for payers, if they had two or three molecules within a therapeutic class, to try to negotiate across these molecules.

However, they pretty much left the choice of class to the physician. Anderson outlines

how these days, “It seems like there’s more willingness to try to manage across classes, negotiate deals with companies and push utilization of a particular class.”

Along with this trend is the willingness to pass on more of the cost of medicines to the patients (co-insurance) and how this is starting to emerge as a rationing tool.

For example, if a patient used to have a $10 co-pay now they might be paying 20 percent of the cost of the medicine, which could amount to hundreds of dollars a month.

“This changes the nature of things and makes the patient a lot more of a customer as well as a patient. This means there’s someone else who has to be convinced that it’s worth the cost.”

Direct-to-consumer advertising has been a big part of how many companies have promoted their products. But some companies are beginning to question whether they should target their audience more precisely.

The view at Genentech is that it’s not such a good idea for product marketing messages to be scattered over the general public. “We don’t broadly target the public with messages about our medicines,” says Anderson.

“People are starting to realize that TV and magazine advertisments are not necessarily very effective and don’t portray a good image of the industry. There are better, more targeted approaches to provide education about our medicines to the patients who need them.”

Another trend having an impact is the rise of specialty markets, which means smaller prescribing bases and more targeted approaches. Anderson recognizes the differences associated with selling high-value medicines to thousands of patients and hundreds of doctors in comparison to selling lower value medicines to millions of patients and tens of thousands of doctors. “Different companies are having various levels of success at making the switch. Some companies just try to apply the big pharma promotional model to specialty and that’s not particularly effective.”

Marketing future Anderson believes that the biggest change likely to take place in the future is the bringing together of the patient and the

incentive structure in terms of payments.

He recalls how in the past there was an unnatural set-up where the physician and patient made the therapy choice but were one step removed from the economics because someone else was paying. “Increasingly we’ll see payers, insurers and governments finding ways to make the physicians and patients economic stakeholders.

“This will bring in price and cost as a much more meaningful part of the dialogue.

In the past marketers in biotechnology have had the luxury of being able to focus almost entirely on differentiating their products based on features: efficacy, safety and convenience. Cost was someone else’s issue. I think that world is going to change very significantly over time.” n

CORPORATE FOCUS NGP. Have pharmaceutical companies focused too much on promoting product brands at the expense of the corporate brand?

BA. There’s a lot of value in the product brands, so I don’t think it’s entirely inappropriate that the focus has been on these.

It’s an unusual business we’re in where so much of the value is in the molecule. Certainly this is true in comparison to consumer goods, electronics or automotive, where there’s so much more involved in the packaging, the channel and the after-market service. Ultimately, in our business it does come down to the biological effect of the molecule, so having a brand focus is not illogical. It makes sense, but there are opportunities on a corporate basis and not many companies have been successful at figuring that out and building something of value.

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ASK THE EXPERT

Seeking the Jon Jordan of South Twin Executive Search advises on how to choosing the right search recruitment firm.

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he pharmaceutical industry is rapidly changing but not everyone realizes what that will mean for their recruitment and retention of human capital. In the past, the industry expanded so fast, companies needed to fill multiple roles quickly. This created a company/firm relationship that was more focused on quantity of candidates than quality of candidates. Today, the FDA has tightened the approval requirements for new drugs coming to market. A side effect has been an increase in company closings, mergers, acquisitions and downsizings. While this significantly increased the number of candidates actively looking, it did not change the number of quality candidates.

Management is now pressured to make the ‘right’ hire instead of just a hire. This shift in staffing is happening now and for companies to remain competitive and successful in attracting top performers, the relationship model needs to change. Partnerships need to be established where both parties have a vested interest in the company’s success.

There are several ways this can happen, but the main goal should be for the company to have a consistent voice in the marketplace, promoting the company and the quality of people they want.

In evaluating recruitment firms, there are four important criteria. The first is how the firm handles the recruitment process. For example, walking through how they target, research and approach candidates will give you a sense of their abilities to reach and attract your target audience.

The second is the evaluation process that the firm uses. It should contain questions that highlight the candidate’s skills, accomplish-

ments, personality, values and interests. This is especially crucial for opportunities that require relocation. While nothing is guaranteed, it will dramatically increase your potential to retain talent if each relocated candidate has interests in the new location beyond the job.

The third criterion is to investigate their knowledge of the challenges that face compa-

didate’s call regarding the opportunity; getting or giving interview feedback; or to set up a meeting, these calls must be returned in a timely manner. Too often these calls get delayed or sometimes not returned at all. If the call goes unreturned, it sends a message to the candidate and the marketplace that they are not a valued part of the business. If they go to work

Jon Jordan is the Founder, President and CEO of South Twin Executive Search. The company’s focus is in working with the pharmaceutical/biotechnology industies, focusing on the areas of sales, marketing, managed care, trade and medical affairs.

Jordan oversees the company’s operations and runs practices in senior management and medical affairs. He has been in the search and recruitment field for over 16 years and recruited people at all levels within an organization.

nies similar to yours. There are many hurdles a company must overcome to be successful. A firm’s knowledge of what those challenges are or could be, is significant. If they are updated on the issues that are confronting your company, they will be able to ask more pointed questions regarding skill sets, accomplishments and professional and personal interests. This information will give you a clear picture of the candidate.

The fourth criterion is that the recruitment firm, must establish open and professional communications with the candidates and the company. Many times, the communication with the company is timely but the candidate communication is not. Whether it is to return a can-

there, they can expect to be treated in the same manner. As with all bad news, it will spread rapidly. The prevailing thought is that if the company valued its human capital, they would select a firm that brings those values to the marketplace. The right firm should not only attract the best people to your organization, but they should be the start of the retention process. Statistics show employees that feel valued, tend to stay longer and be more productive. With high retention rates and employee satisfaction, your company will be more attractive to top performers; improve results and reduce costs associated with turnover. In the end, the firm you choose should have an effect on your top and bottom line results.

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EXECUTIVE INTERVIEW

The perfect fit Kelly Martin of Aerotek explains how companies can find the most qualified job candidates

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erotek Scientific, LLC, a subsidiary of Aerotek Inc., specializes in recruiting and placing professionals in contract, contract-to-hire and permanent positions within the scientific and clinical research communities. Aerotek is a direct source to find qualified employees with the skills and expertise to transition seamlessly into the workplace.

With 25 years experience providing customized staffing solutions, we continually locate the best candidates at all skill levels.

Aerotek’s engagement process, known as the Perfect Fit Program, allows us to narrow the search to one candidate, to fill one specific position. Aerotek Scientific’s goal is to deliver the most qualified candidate: the perfect fit.

NGP. How would you describe your role within the company?

KM. As Aerotek’s Vice President of Life Sciences, I am responsible for creating successful programs with some of our largest accounts. I lead our national and international delivery and sales efforts ensuring our customers receive exceptional service.

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Aerotek’s life sciences segment provides the highest level of recruitment services to both candidates and customers in the biopharmaceutical industry. Our specialized service offerings help us to provide top-notch staffing and recruitment services in multiplelabor categories to many well-known companies within the industry, including global pharma and biotech companies.

Aerotek’s proactive recruitment strategies, effective staff augmentation based on industry needs and on-premise management are just some of the successful initiatives we’ve implemented to improve our customer’s operations.

NGP. You have more than 15 years experience in executive sales and management, starting out as a recruiter with a West Coast-based national staffing firm in the early 1990s.

What would you say are some of the most significant changes in the recruiting world since then?

KM. The introduction of automation has been the most significant change in the staffing industry over the past 20 years. In the early 1990s staffing firms were more reactive –

having a singular focus on servicing customers and delivering top talent. Today, staffing firms like Aerotek strategically recruit and are more proactive in providing customized services that make working with a staffing company more of a consultative partnership.

Even with these advancements, automation doesn’t hire people, people hire people.

A staffing firm can be successful in an automated environment because these professionally trained recruiters have the capability to identify and match quality candidates.

We anticipate the customer’s needs and are continually recruiting in order to enhance our speed of delivery. In order to keep up with this modern-day recruitment strategy, Aerotek provides advanced training for recruiters. For example, in just one year, Aerotek recruiters can receive up to four layers of training, ranging from the fundamentals of recruiting to technology-driven courses.

At Aerotek, we understand the time and money associated with professionally training each of our recruiters and we continue to provide this high level of training because we believe our recruiters are worth the investment.

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NGP. You then joined an international organization on the frontier of VMS Solutions, where you also headed the health and life sciences division. What were your main responsibilities?

KM. As the managing director of global accounts my responsibilities included creating Managed Service Provider/Vendor Management Solutions (MSP/VMS) and strategies for Global 2000 companies. The programs included contingent, contract, 1099, offshore, consulting and project-based labour.

In the early days MSP/VMS programs were a conceptual idea and difficult for many companies to understand. During the past five years large companies have become more technology savvy and ‘automation friendly’ – with most using a type of internal system, for example, enterprise resource planning (ERP), human resources information system (HRIS), timekeeping and/or middleware.

Automation has streamlined and standardized business processes, provided visibility to drive business metrics and enhanced the overall value chain on a global basis. Automation provides objective, performancebased metrics to benchmark the value that Aerotek delivers to our customers.

NGP. Where did you go from there?

KM. I joined Kforce, a professional staffing firm, as vice president of its scientific division. During my time with Kforce – before the scientific division of the company was acquired by Aerotek in 2008 – my responsibilities included designing strategic initiatives for the growth and success of the scientific division. I focused heavily on expanding our team’s capabilities through training and coaching for performance.

NGP. What factors contributed to the virtually seamless transition of Aerotek’s recent acquisition of Kforce Scientific?

KM. The acquisition was a well thought out, strategic move by Aerotek. Kforce Scientific and Aerotek Scientific were well-aligned companies and their business lines consisted of many of the same focuses within the industry, including pharmaceuticals, biotechnology, clinical research, healthcare, food and beverage, chemical and plastics.

The union of these two competitors creates

an even stronger niche staffing company that provides highly-qualified recruiters, many with a background in science.

NGP. How has the most recent expansion of Aerotek’s service offerings benefited the biopharmaceutical industry?

KM. As technologies evolve and new career specialties emerge, the market for scientific professionals has continued to increase.

Aerotek’s recent expansion of service offerings within the biopharmaceutical industry reinforces the company’s position as a leader in the marketplace. Our scientific division continues to place the most qualified candidates in many industries, including pharmaceuticals, biotechnology, healthcare, food and beverage, clinical research, chemical and plastics.

Aerotek’s scientific recruiters understand the depth and breadth of a candidate’s skills and abilities most coveted by customers and we continue to communicate effectively to truly understand the needs of our customers. Our recent expansion has allowed us to refine our recruitment abilities, taking us to the next level of professional recruitment.

This ability, combined with the strength of Aerotek’s size, scope of delivery and financial strength, enables us to provide exceptional service to all sectors within the biopharmaceutical industry.

NGP. What do you consider to be the major challenges the pharmaceutical and biotech industries are facing today?

KM. With ever-emerging new technology

and the rapid changes that are occurring in the biotech field, the pharmaceutical and biotech industry’s growth potential is virtually unlimited. One of the few road blocks that can threaten the advancement of any new technology is scarcity of qualified, technical professionals to drive concept through to commercialization.

Aerotek can help companies oversee this potential obstacle. Our core competency is to identify, screen, match and place talent which enables pharmaceutical and biotech organizations to focus on their core competencies.

NGP. What do you think the future for the industry holds? And what will be your key areas of focus at the company in the short and long term?

KM. The future is bright – big Pharma is constantly being challenged by start-up pharmaceutical and biotechnology companies. New discoveries are being made in the research phase and novel drugs are being developed.

Universities are offering more specialized degrees to prepare talent to not only work in the biotech and pharmaceutical industries, but to start up and run the companies.

Our short-term goals are to continue hiring internal team members who can understand and relate to the needs of the scientific community and to maximize automation in order to drive first-rate delivery. Our long-term goals are to continue to expand our international footprint and labor pools in order to support the global biotech industry. n

Kelly Martin is Vice President of Sales in Life Sciences and Health for Aerotek. She has more than 15 years experience in executive sales and management developing contingent labor solutions and strategies for domestic and global companies. Her responsibilities at Aerotek include partnering and managing the company’s largest clients in the pharmaceutical, biotech, medical device, health insurance and healthcare system industries.

Established in 1983, Aerotek is an operating company of the Allegis Group, the largest provider of staffing services in the United States. Aerotek operates more than 150 non-franchised offices and employs 2000 recruiters to identify, screen and select top talent. To find the Aerotek location near you or for more information about Aerotek Scientific, please visit www.aerotek.com.

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ASK THE EXPERT

How do you maximize the value of global branding?

It took many years for the pharmaceutical industry to fully embrace global branding.

Marketers believed that healthcare, more than anything else, is local. But now as The CementBloc has shown, that information flows freely across borders and audiences via the internet, even healthcare has gone global.

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arge, international networks banked on the notion that ‘big pharma’ needed big networks to pull off global branding.

They invested heavily in building a ‘bricks and mortar’ presence worldwide assuming that clients needed boots on the ground in every market to effectively implement global branding. It turns out that there is a wide range of needs when it comes to global branding, so we’ve turned this global paradox on its head.

The CementBloc has been working on global branding assignments for eight years. The needs of the global brand development team are very different from the needs of the major markets which are different from the needs of secondary or tertiary markets. Our job is to help our clients fully maximize the promise and the value of global branding. We work closely with our Indigenus network to deliver value across the brand chain.

First, we assemble global teams early on.

We enlist our Indigenus partners to fully vet the promotional and creative strategies and to par-

ticipate in concept development. How does this add value? It minimizes the ‘not invented here syndrome’ and maximizes the universality of the communications. Brand teams no longer worry whether ideas will ‘play’ in key markets because our Indigenus partners have ‘green lighted’ them. Local markets no longer shake their heads over concepts that don’t resonate.

Global teams feel they lose control over their brand once the brand kit is delivered.

Major markets need to expand beyond the core materials and this is where global brand consistency is at greatest risk. The Indigenus teams, however, have an ownership stake in the campaigns they are now implementing locally so interpretation and consistency are no longer problematic.

Structured growth Our model has proved successful and has fueled rapid growth for our agency. We’ve seen uncontrolled growth derail other agencies, and we did not want to fall victim to our own success.

We know that our clients value the senior attention that they get at smaller agencies. So we restructured recently to continue to grow our organization horizontally rather than vertically.

The CementBloc now consists of three agencies focused on healthcare professionals (The CementWorks, The IronWorks, and The StoneWorks) and one agency focused on patients (The CementBond). The partners and senior executives of each agency provide closer supervision of their teams and are heavily involved with clients on a daily basis. We freed them from managerial headaches by centralizing shared services such as project management, graphic and editorial services, HR, IT, etc., under The CementBloc. And this has inspired yet another value innovation for our global clients.

Our recently formed Global Resource Center provides an effective and efficient solution to secondary and tertiary markets that rely on global brand kits to drive their promotional platforms. We customize core materials to meet local needs, ensure culturally sensitive translation, modify graphics, and deliver print-ready files to local vendors. And we do this more economically than a local ‘bricks and mortar’ agency could. That creates value not only for the smaller markets but also for the global team because we can ensure that consistency of branding hallmarks and messaging is maintained worldwide.

Finally, we build a global brand repository for every brand. Email alerts let marketers know when new materials are posted, and these materials are shared in real time to maximize the impact of innovative thinking while minimizing the time and resources to distribute them globally.

We may not be the biggest agency, and Indigenus is certainly not the biggest network, but we think big and we challenge the status quo. And that’s exactly what most global clients are looking for. n

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The final model is the cost plus model, where customers pay on an ad hoc basis and only for the specific activities that are being undertaken. Individual customer departments can be charged based on the maintenance demand. This model is highly flexible, but customers take a higher risk; for example, with higher costs if more maintenance is required than initially anticipated.

OUTSOURCING ASSET MANAGEMENT Bob Moore of GE Healthcare examines the benefits of contracting out scientific asset services.

NGP. Why does GE Healthcare provide scientific asset services (SAS)?

BM. If you look at the traditional model of laboratory equipment, pharma and biotech companies have relied on the original equipment manufacturers (OEMs) to maintain their inventories. However, there are a number of disadvantages to this model, including the administrative burden and the time it takes to manage vast inventories, which can divert resources away from scientific projects. Our comprehensive range of services can support scientific asset management, from the acquisition of equipment with financing to the installation and utilization of assets, and ongoing maintenance of equipment. We will also provide expert advice in the area of bio pharmaceutical manufacturing.

NGP. Could you describe what service models you offer, how they fit within SAS and what are their key differences?

BM. Essentially, we have three models. The full service model comes with a complete team of site-based engineers – from one or two through to as many as required. In this model, we cover all the service, costs, repairs, parts and labour involved in managing your complete range of assets. It provides the lowest administrative burden for the customer and is provided as a

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fixed fee to enable ease of budgeting. It works best for less risk-tolerant customers or in cases where the customer’s maturity and knowledge on asset management is relatively low.

The second option is a preventative maintenance contract, with remedial services at additional costs. The team of onsite engineers will often be smaller than the full service model and this would be better for risk-happy

“A major pharmaceutical company in the US identified us as one of their top 30 suppliers” companies or companies that have a very good knowledge of their exact asset management requirements, as they won’t be getting the full range of our services. This model is a bit more flexible to changes in the activity of the customer or to alterations in the instrument population, but has an increased administrative burden.

NGP. Which factors influence the selection of the most appropriate service model?

BM. There are a number of factors that influence what is the best model for a particular company. It could be down to what resources you have; the number of facilities and their locations; how many instruments you have; what are your objectives (e.g., reduce costs/manage risks); or what is the level of understanding of your service needs? Customers can be completely confident that we will help them select the model that best fits their requirements. For all models, GE Healthcare takes ownership of asset management. We work with customers’ inhouse teams and share resources with them to optimize asset management.

NGP. What differentiates GE Healthcare’s SAS models from other industry solutions?

BM. GE Healthcare stands out because we become an extension of the customer’s internal team. We put together experts specific to the customer and have dedicated onsite teams that work directly with the customer. We can be in the background or can be more visible – whatever the customer wants. Where we really differentiate ourselves is our level of experience and the results we achieve with any asset.

Because we’re onsite, response is immediate, and our experience with Lean and Six Sigma principles means we can offer unsurpassed knowledge to further reduce costs. We do work alongside laboratory and regulatory staff, drawing on our change management expertise to help customers through the implementation process with the minimum of fuss.

We also help to train customers’ technicians and staff to help improve performance.

NGP. What are the advantages and benefits of each of the SAS models?

BM. Simply put, tangible results. We go beyond the basics that some asset service providers

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deliver and we have proven to reduce customer costs by up to 25 percent. What we’re doing is getting a handle on customers’ inventories so they don’t need to worry about asset-related issues. We provide a monthly or quarterly check on all inventories so customers can track their assets (online and offline) and their movements. One of the major benefits is that we do this for any asset, regardless of the OEM; and with our AssetPlus enterprise management suite (a hardware and software solution) customers can manage inventories, service histories and compliance requirements.

NGP. How flexible are these models?

BM. The models are all incredibly flexible and can be accommodated on one site or across multiple sites; for example, if you are a small company in a hub or on a science park, you might want to share asset management costs with two or three other companies located at your facilities – we can accommodate that.

We recently implemented a flexible scientific asset service programme for one of Europe’s leading regional biotechnology groups, ERBI. It’s a cluster based in Cambridge, UK, that consists of many small companies with limited resources to handle administrative tasks.

Our programme successfully helped these companies to reduce the time spent managing service providers, negotiating prices and scheduling service calls – leaving them to focus on their core scientific competencies.

NGP. What trends do you foresee in the coming decade in outsourcing asset services?

BM. I believe that for pharma and biotech companies to optimize their development and manufacturing processes, they need to be in a position where all their equipment is successfully managed. This means really understanding your assets and having thorough knowledge of the equipment you use. It’s also about staying on top of your inventory. Longer term, customers will be looking to maximize the utilization of their assets and possibly work with shared assets and expect technology in asset management, such as RFID. Service providers themselves will offer a greater range of services, such as full life cycle asset support, including validation programmes, process troubleshooting and asset disposal.

Customers are looking for long-term partner-

Bob Moore is the North American Service Sales Director for GE Healthcare’s life sciences business.

Bob’s expertise is in offering service solutions for the company’s customer base, including service agreements on GE Healthcare equipment, performance solutions consulting services, training services and multivendor scientific asset services on laboratory equipment maintenance.

ships with their service providers and that’s what we offer.

NGP. What feedback have you had from customers?

BM. The feedback has been incredibly positive and it’s been a great experience for both our onsite teams and our customers. Our onsite teams have won awards from clients that are normally reserved for their own internal departments – that’s how close and integrated we get with customers and is a wonderful endorsement. Also, a major pharmaceutical company in the US identified us as one of their top 30 suppliers – in a list of 10,000 companies.

But we certainly don’t get complacent and are always looking to develop our services and offerings. That’s why we place great emphasis on continual improvement and feedback.

NGP. What experience do your engineers have, and do they all work for GE Healthcare?

BM. Our engineers have a broad and extensive range of experience. We have a continual

training programme to ensure they are up to date with the latest equipment and technology, but many of them have more than 20 years’ experience with OEMs of the most common laboratory processes. Because GE Healthcare SAS covers the full gamut of laboratory equipment, we have engineers who are experts right across the board. In cases where we call in OEMs, customers don’t have to worry about managing any of their assets either – we’ll handle that for them.

NGP. How do you help customers to make informed purchasing decisions?

BM. At the end of the day, we’re not here to buy equipment for our customers. We’re here to help them make informed decisions about what equipment best suits their needs and then we manage that equipment for them, giving them the opportunity to focus on what they are best at – developing and manufacturing drugs. Ultimately, GE Healthcare can help customers significantly reduce costs and raise productivity, usually within a year, which ultimately leads to increased profits. n

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Innovate to integrate Calling up accurate patient information should always be a straightforward procedure for any physician, but a lack of integrated patient information systems is a problem throughout the US. Donald Holmquest of the California Regional Health Information Organization looks at some potential solutions and how their adoption could revolutionize the healthcare industry.

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n California, as in many other areas of the country, an individual’s health information is scattered throughout the community among different healthcare providers in paper records and in computer systems that can’t talk with each other. This is a major problem that can have serious repercussions, as Donald Holmquest, President and CEO of the California Regional Health Organization (CalRHIO), explains.

“I was in my own doctor’s office recently for an annual physical and he kept asking me about this particular procedure I had some time ago. He wanted to know the data but he kept giving me a date that didn’t match.

Finally, we realized that somebody else’s record had been put into my paper record. I was not only missing medical information, but I was being given completely the wrong patient data.”

As a doctor himself, Holmquest was intuitive enough to realize the problem and its potential consequences, an incorrect prescription. However, he worries about the average patient and their inability, understandably, to identify such issues.

Widespread problem To highlight the scale of the problem, Holmquest recalls the results of a study carried out in 2005 by the University of Colorado in Denver. Researchers at the university discovered that when independent evaluators made assessments on a sample population’s clinic visits, they found that in about one out of seven instances, charts had clinical information missing. Further evaluation revealed that on half of these occasions, the patient got either the wrong drug or the wrong treatment, or a diagnosis was dismissed.

“Therefore, the patient could have come to some harm from that visit just because of missing information,” says Holmquest. “This was not the result of a bad doctor or a bad clinic. It’s just that information wasn’t there that should and

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could have been. This works out to be six percent of the ambulatory visits in a very fine university ambulatory setting, which is probably a much better setting than many others that we deal with.The worrying thing is that six percent of the time, when patients in the United States go to see their doctor, they are at risk of being harmed or getting a suboptimal result – getting a drug that interacts with another drug they’re already taking that the doctor doesn’t know about.”

Bringing together various healthcare stakeholders around the shared vision of using information technology to make healthcare safer and more efficient throughout California is something that CalRHIO is continuously striving to achieve. Holmquest explains how the organization began in 2005 to build a consensus around what it should do.

“We raised a substantial amount of money and spent this in educational efforts and holding meetings all around the state. We had about 100 healthcare related organizations and about 450 individuals participating in work groups. They considered what kind of clinical information is important and what technology should be used to connect to thousands of information systems around the state. In addition, more than 1000 people attended statewide educational summits.”

The team worked hard to ensure as many people as possible were consulted about moving forward. “The end result of this effort was the selection of a stakeholder board of 24 positions, which we filled with representatives from hospitals, medical groups, risk-taking medical organizations, consumers, privacy advocates, state and local governments, health plans, insurance companies, safety net providers and other regional health information efforts.”

Exchange projects One of the projects that CalRHIO is pursuing is to help safety net providers and their communities plan and expand health information ex-

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CalRHIO CalRHIO is a non-profit organization whose mission is to improve the safety, change projects. The organization was given a subquality and efficiency of healthcare through the use of information technology stantial grant from the Blue Shield of California and the secure exchange of health information.

Foundation. This funding enabled them to offer a free The organization’s goal over the next 10 years is to make it possible for any technical consulting service to various safety net authorized healthcare provider in California to be able to electronically access providers throughout the state. A huge amount of patient information regardless of where care is being delivered – in an urban healthcare in California is provided by free communihospital or a rural community clinic, in a physician’s office or an emergency ty clinics – some state qualified, some federally qualidepartment. Released only with the patient’s written consent or in an fied, some both – and public hospitals, and it is with emergency, health information will be protected and exchanged under strict these people that the organization works to provide medical privacy and confidentiality standard procedures. free consultation on technology projects.

This online, on-demand health information exchange (HIE) system will work “We also provided grants to four safety net organiin much the same way as an internet search. Data remain with the primary zations to help them expand their health information source; no data warehouses will be constructed. The result will be improved technology projects,” recalls Holmquest. “That work is safety, quality and efficiency of healthcare. The statewide initiative came about still ongoing. We would love to continue this type of as a result of the effort to build a national health information network. work. We have found that many of these organizations need basic help in planning their IT roadmap to understand where they are today and how to get where they want to be in the shortnot paying for initial deployment. CalRHIO is borrowing private capital to term and farther out.” get the system up and running, which will be repaid through revenue collected from its medical information query service.

Challenges and opportunities One of the biggest challenges for the organization in the long term will be its business case. As Holmquest points out, organizations like CalRHIO need to be able to sustain themselves beyond initial start up. “You cannot rely forever on grants,” he says, “whether they’re federal grants, state grants or private grants. You have got to come up with a sustainable business model.

“The technology is well understood. There are huge ongoing national efforts aimed at achieving interoperability. We’ve been engaged in these activities, but what is most critical to us is finding a financial model that makes it possible for us to sustain our operation and grow. When starting any business, you might have a great idea, but if you can’t monetize it then you’re not going to go anywhere with it.”

Depending on healthcare organizations to finance the initial build-out and start up places undue financial burden on early adopters and has demonstrated little success to date, Holmquest says. The financing model for the CalRHIO Health Information Exchange is designed so that participants (health plans, hospitals, medical groups, individual physicians) are

“Six percent of the time, when patients in the United States go to see their doctor, they are at risk of being harmed”

CalRHIO is starting its deployment in emergency departments, initially providing data from national sources on medication history, laboratory reports and clinical claims data from payers. Currently ED physicians have no patient data. The information provided through the CalRHIO system will help them make better care decisions and save the cost of redundant tests. It will also improve safety; for example, by having medication history, a physician can determine whether a prescription might adversely interact with what the patient is already taking. Because health plans and their members will be the primary beneficiaries, health plans are being asked to pay for medical information queries to the system on behalf of their members. Deployment to physicians’ offices will come once the EDs are connected.

An interesting final point Holmquest makes is that the estimates from organizations that have looked at health information technology generalDonald Holmquest is President ly reveal they can save about five percent of the and CEO of the California Regional cost of healthcare by just reducing duplicate tests Health Information Organization. His and getting better outcomes. main responsibility is to implement “Five percent of what we spend on healthcare a statewide information exchange, is huge amount of money,” stresses Holmquest. which involves convincing “In California, that five percent number translates stakeholders of the value of health to about $10 billion to $15 billion every single year. information exchange, getting The benefits are therefore self-explanatory – we can agreements with providers and data save huge amounts of money and keep 50,000 peosources to share information and ple every day from getting a bad result. There is securing financing. nowhere else in the healthcare system today where such savings are as certain, affordable and supported by technology that already exists.”

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EXECUTIVE INTERVIEW

The virtual company The biopharmaceutical industry is depending increasingly on outsourcing services.The advantages of outsourcing have proven themselves in a diverse range of industries and can be a driver for improving both financial as well as operating performance.

By Willem van Leeuwen

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utsourcing offers access to specialists who have the skills, technology, processes and scale to perform tasks as well or better than a company could do by itself. An extreme form of outsourcing can be seen within the virtual company. The virtual company is a company that has outsourced all or nearly all of its business processes to contract research organizations (CROs) and/or contract manufacturing organizations (CMOs) and the primary role of the company is to monitor and manage the outsourced activities.

One of the companies that has been successful in deploying the virtual company business model is Provectus Pharmaceuticals Inc. Provectus, a Tennessee-based development stage pharmaceutical company is engaged in the treatment of metastatic melanoma, breast cancer and liver cancer. The company has recently obtained approval to begin phase II clinical testing of its lead product, PV-10 for the treatment of stage III and IV metastatic melanoma, the most aggressive and deadly form of skin cancer. Clinical trials are currently conducted at three locations: two in Australia and one in the United States.

I spoke with Provectus CFO, Peter Culpepper at the conference ‘Perspectives in

Melanoma XII’ that took place in The Hague on October 2, and asked Peter about his experience with the virtual company business model.

What were the main considerations for choosing the virtual company model?

Provectus was founded by PhDs that did not have access to enough capital to fund a large

What is the business strategy of your company?

Provectus is a company of inventors and entrepreneurs rather than a company of marketers and business development executives. As such, our company does not intend to commercialize our drug product candidates as they are expected to be validated via FDA clinical trials as has been the case thus far. Rather, we will likely part-

“An extreme form of outsourcing can be seen within the virtual company” Willem van Leeuwen

corporation, so the virtual model was necessary to minimize cash burn. Our company is attempting to treat cancer and serious skin diseases in ways that the mainstream medical community does not readily understand so it was necessary to again start small with the virtual model since it was not possible to raise large sums of money from the more established investment banks and venture capital groups.

ner with much larger pharmaceutical and/or biotech companies that have sales and distribution capabilities. Therefore, since we are not planning to commercialize out drug product candidates there is no need to develop a large corporate overhead which is why the virtual model is appropriate.

How has outsourcing effectively been implemented within your business processes?

Peter Culpepper has spent 20 years in the financial field working for a wide range of companies and industries in the US and abroad, especially high-growth startups. His experience with for-profit companies ranges from private start-ups to publicly traded, global conglomerates. He also has worked with large non-profits and a national CPA accounting firm. He is licensed as a Certified Public Accountant in Maryland and Tennessee. Culpepper holds a master’s of business administration (MBA) in finance from the University of Maryland.

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We have two drug product candidates that address two large therapeutic areas; namely, oncology and dermatology. Both drug product candidates are remarkably straightforward to develop without adding corporate overhead since both candidates are based on a pre-approved FDA compound for diagnostic purposes. Since the primary requirement for developing drug product candidates is the treating of human subjects in clinical trials under the aegis of the FDA, it is very appropriate to outsource the management of the clinical trials to investigators and clinical research organizations that are experts in the field.

This is very much an accepted practice in the life sciences industry and enables us to be successful with the virtual model What is the most important aspect of the virtual company as seen from your perspective as a CFO? The publicly traded development stage life science company in today’s financial world needs to be very flexible in its use of cash. The best way to be flexible with cash is to have as few fixed expenses as possible. The virtual model is ideal for limiting fixed expenses since it minimizes overhead.

Can you give us some observations based on Provectus’ experience with the development of its business based on outsourcing?

Provectus has been most effective with its out-

sionalism, trust, experience and most likely requires a higher cost per hour for service than an employee would cost. But the flexibility and broader scope of services that the outsourced service entity brings more than offsets any cost savings that correspondent employees would provide.

How do you manage remote manufacturing and clinical trial sites?

Provectus has experienced that a high degree of oversight of remote location CRO, CMO, and outsourced service entities in general is very helpful. Often times, the high degree of oversight requires daily telephone and e-mail interaction, as well as monthly site visits. Of course, working with professionals enables the outsourced services component of the virtual company model to be successful. But, being physically with the outsourced service entity professionals enables communication and the business relationship to be as effective as possible, let alone daily/weekly communication via e-mail and telephone.

Conclusion When properly managed, the advantages of the virtual company are obvious. The current situation on the financial markets is not favorable for building a fully integrated company or anything that comes even close to it. Contract manufacturing strategies are a considerable option

“It is imperative that the outsourced relationships be very effective” Peter Culpepper sourcing of services when it has leveraged long term business relationships. Since outsourcing is so critical for the virtual company model to be successful, it is imperative that the outsourced relationships be very effective. In order for the outsourced relationships to be effective, the business relationship between the virtual model company and the CRO, CMO, etc., needs to be very strong.

It has been the experience of Provectus that the relationship of its company personnel to its outsourced service entities is based on profes-

but require substantial investments in GMP facilities in order to make service provision to other companies possible. Development stage companies usually gather capital from venture capitalists or the retail stock market (private investors), as compared to established companies that gather capital from institutional investors. Return on investment for these investors could be realised as soon as positive results are reported from clinical trials phase II or III as these phases generally provide important valuation milestones which will serve

Willem van Leeuwen is Managing Director of QMR Technology, a Dutch consulting company delivering world renowned Oracle business solutions for small and medium enterprises pertaining to the life sciences industry. His experience portfolio includes numerous implementations of the ERP system Oracle EBusiness Suite and the Oracle Life Sciences Applications for clinical data management, adverse event reporting and clinical trial management.

as the basis for a merger or acquisition by a big pharma or biotechnology company.

A significant part of mergers and acquisitions fail to generate the projected value because of integration issues like differences in organization culture, business processes and management. As a virtual company can be relatively easy integrated within the buying company this could be very appealing to a big pharma or biotech company that wants to extend its pipeline.

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EXECUTIVE INTERVIEW

GOING GREEN Ingo Juraske, Vice President, Health & Life Sciences, Hewlett Packard EMEA, tells NGP about the environmental business benefits of reducing your energy usage.

NGP. Corporate social responsibility and the implementation of strategies can sometimes conflict with the need for energy saving and technical innovation. How should companies address these issues?

IJ. By implementing data centre and workplace transformation program, HP has significantly reduced its energy requirements. This has both a business benefit and environmental benefit, so there is no conflict between HP’s corporate social responsibility policies and energy saving initiatives.

HP addresses CSR and product technical innovation through its Design for Environment (DfE) programme, established in 1992 to ensure the environment is considered at every stage of the product lifecycle. Energy efficiency is one of the programme priorities, and under DfE, printing or PC products are designed to meet the energy label, Energy Star.

From a research and development perspective, HP Labs has the Sustainable IT EcoSystems Lab, which focuses on sustainability and reducing environmental footprints.

NGP. What practical opportunities are currently available for energy reduction through the use of equipment, cooling systems and electrical loads? What are the alternatives?

IJ. The data center is an area where HP has seen substantial green innovation recently, reflecting the importance that customers place on energy efficiencyinthedatacenter.Dynamicsmartcoolingsolutions in data centers reduce the cost of cooling by

25-40 percent, while reducing CO2 emissions by intelligentlyre-tuningtheairconditioningoutputinresponse to server demand, and thus supporting a higher operating temperature. Additionally, companies are seeking to address the ever-growing complexityandenergydemandsoftheircomputing environments. By consolidating applications and hardware, and virtualizing the remaining systems, they provide a considerably more efficient set-up.

Combinedwithintelligentpowerdistributionandefficient architectures such as Blade servers, energy and resource use can be further reduced.

NGP. As the pressures on the data centre industry tighten over the critical issues of power usage and energy efficiency, the need to develop and learn from industry best practice increases. What

can be learned from an analysis of statistical data collected from a significant number of data centers utilising green grid energy efficiency measurement techniques?

IJ. By analysing a significant number of data centers, a clear picture of the range of achievable efficiency becomes apparent.This can then be ranked using a scale and gives companies something to judge both their current situation and opportunity.

The power usage effectiveness (PUE) measurement that HP developed with The Green Grid and the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) gives a feel of how efficient the conversion of electricity into computer power is. Additionally, at a lower level, the HPServer efficiency measurement is now being shared with Energy Star and Spec Power.

The new HP Dynamic Smart Cooling (DSC) technologyhelpscompaniestackleoneof themost critical issues in today’s data centre – power and cooling. DSC enables companies to change data

“By analysing a significant number of data centres, a clear picture of the range of achievable efficiency becomes apparent” center energy costs from a fixed to a variable cost, significantlyincreasetheirITscalingheadroom,and ensure complete confidence that they are running a much more efficient data center – helping them drive towards a more adaptive infrastructure.

Ingo Juraske leads the Public Sector, Health & Life Sciences (PSHLS) segment in EMEA for Hewlett Packard. He is responsible for driving profitable growth and customer satisfaction of HP’s PSHLS business, focusing on eGovernment transformation, border security, shared services and digital health solutions, as well as solutions for pharmaceutical industries and life sciences, education and research.

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ASK THE EXPERT

Safety first Werner Bennek, of Bürkert Fluid Control Systems on on how to control complex processes even in explosion-hazard atmospheres.

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ntil some years ago, combining electrical and pneumatic devices in zone 1/21 environment control cabinets was hazardous due to the wet and oily compressed air, which caused corrosion and short circuits.

Today’s compressed air systems usually work with air qualities with a pressure dew point

bride solution for the installation in zone 1 combining modules of the SIMATIC ET 200iSP system from Siemens with their modular pneumatic automation system AirLINE Ex 8650.

With its integrated pneumatic functions, process and productions sequences and being ATEX certified in a whole, it is designed for de-

“The quality of the exhausted compressed air is so excellent that it can be led into the control cabinets in order to avoid humid, aggressive or dust-containing ambient air entering the cabinet”

below -20°C (residual moisture of 0,88 g/m³) and an oil concentration of less than 1 mg/m³.

Especially in the pharmaceutical, as well as in the food and beverage industry, one can expect compressed air qualities even better by several orders of magnitude. The quality of the exhausted compressed air is in fact so excellent that it can be led into the control cabinets in order to avoid humid, aggressive or dust-containing ambient air entering the cabinet. Thus working with dry and oil-free air reduces the problem of corrosion and short circuits. The detonation risk still remains due to the process conditions.

In explosion-hazard areas of zone 1 the pneumatic control of cylinders and pneumatic actuators is done generally by either explosionproof single valves, directly mounted to the actuator, or ex-proof valve banks wired to a remote-IO-system. Installing the pilot valves in a safe area is a further option, although it is often not possible as the large distances between valves and actuators lead to unacceptably long switching times. Hybrid solutions combining electrical IO-systems with optional pneumatic outputs like our successful 8644 AirLINE system are state of the art for installations in save environments and in zone 2.

Bürkert wanted to make the advantages of this technology available for applications in hazardous environments and developed a hy-

centralized operations in an explosive environment. It can be used in explosion-hazard areas with a gas or dust atmosphere and therefore is most valuable for users in the process control worlds found in fine chemicals,

ible and modular design guarantee a fast and easy system-setup and allow pneumatic, electric and electronic modules with different functions to be combined with one another. The components are connected together by screwing or latching, thereby establishing both the electrical and pneumatic connections. The pilot valves integrated in the pneumatic modules allow a wide range of different pneumatic actuators to be controlled in the field; for example, process valves or pneumatic cylinders. The explosion protection is guaranteed through electronic limitation of voltage and current.

Engineers and users of ex-proof IO-systems welcome integrated pneumatics for their outstanding advantages: the close-to-the-process installation, a significantly reduced wiring and compact design as well as the simplified documentation, proven intrinsic safety and the little power consumption and therefore only

Werner Bennek With a background and experience in electronics and physics, Werner joined Bürkert in 1991 as an internal technical sales assistant for Germany, later on overtaking functions in international sales support and application management. Today he is part of the Segment Hygienic Processing team and responsible for products and applications related to hazardous atmospheres

pharmaceuticals, cosmetics and everywhere where solvents, alcohol or lacquers are employed.

It even can be installed in factory automation; for example, for autofilling of solvents, alcohol or lacquers. In these application areas, the new system is so far the only compact electro-pneumatic automation solution allowing the integration of EExi pneumatic valves without additional wiring.

Connecting sensors and actuators to bus systems substantially reduces the wiring effort. Standardized interfaces and a highly flex-

little waste heat not to speak of the cost savings. Besides less wiring, less planning and less documentation, the new ex-proof electropneumatic automation system offers another important advantage – as all elements, valves etc. are harmonized and certified. All devices and elements are consistent to EN 60079 part 0/1/7/11/26 and EN 60529. This helps engineers, contractors and users to concentrate on their main business, exempted from engineering control cabinets.

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“When I consider what the industry has an opportunity to do with drug safety in the next five to 10 years, I find it very exciting”

Amrit Ray of Bristol-Myers Squibb discusses the changing drug safety landscape.

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t BMS, I oversee three areas of focus relating to pharmacovigilance. First, medical safety, concerning the safety and risk/benefit of all compounds going through the research and development process and all marketed medicines; second, the increasingly emphasized pharmacoepidemiology function; and third, the management of medical affairs for Bristol-Myers Squibb’s mature products.

Drug safety is of paramount importance in the pharmaceutical industry and it’s very clear that today, pharmacovigilance has become a CEO-level agenda item for most major companies. In terms of where companies focus their efforts, pharmacovigilance is clearly a sensitive lever for businesses – it can make a vast difference to both drugs undergoing research and to marketed medicines.

I believe that Bristol-Myers Squibb is setting new industry standards in the areas of pharmacovigilance. We’ve recently completed a comprehensive transformation of our pharmacovigilance AMRIT RAY organization, including the structure, processes and operating model. This reflects the re-emphasis of the importance of patient safety and an evolution to increasingly productive, innovative and impactful pharmacovigilance – what some have described as ‘next generation pharmacovigilance’.

Quantum leap The increasing focus on drug safety across the industry relates to a variety of factors. The environment has changed around us but in addition,

for example, we also now have capabilities and innovations that were not there just a few years ago. The combination of innovation and a receptive environment presents us with an opportunity to make a quantum leap – to understand medicines in a more thoughtful way, to set new standards for transparency and communication of that new understanding, and ultimately to offer a better quality set of options for patients. When I consider what the industry has an opportunity to do with drug safety in the next five to 10 years, I find it very exciting.

The majority of pharma and biotech companies will encounter a very similar set of challenges in the next few years – including the need to truly optimize the way they address benefit/risk for their products, and pharmacovigilance is central to that. Looking at the future, there is no question in my mind that pharmacovigilance will continue to transform in the next five to 10 years.

When you look at the parties that are involved – patients, prescribers, biopharmaceutical companies, health authorities, payers – all of them have a strong interest in drug safety. There will be new opportunities to harness science, examine new data and develop new collaborations. This includes, for example, examining data that we previously haven’t been able to bring together and operating via collaborations such as industry-government, industry-academia and cross-industry. New partners will have an opportunity to work together – including academic institutes, governmental entities such as Reagan-Udall, and new technology providers. My feeling is that these new collaborations will present us with new opportunities in the next few years – all with the goal of bringing new insights that benefit patients.

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EXECUTIVE INTERVIEW

Logistical challenges Richard Beeny of LifeScience Logistics on meeting the challenges of logistics and supply chain in the pharmaceutical industry.

NGP. Inefficient logistics and supply-chain networks contribute significantly to rising costs and compromised quality of care and patient safety. What can pharmaceutical companies do to meet these challenges?

RB. For a variety of reasons, pharmaceutical companies have tended to focus more on R&D than on the efficiency of their supply chain.

Given today’s market demands, however, an inefficient supply chain is no longer an acceptable cost of doing business. In order to Lean out inventories, enhance regulatory compliance and respond to market demands for greater safety and lower cost, most manufacturers are now turning to outsourcing.

Third-party logistics providers offer the pharmaceutical industry a scalable, lower-cost solution. Since they must meet the requirements of multiple clients, they bring a set of best practices to operations while maintaining regulatory compliance. More and more, pharmaceutical companies are realizing that by outsourcing their supply chain, they can concentrate on their primary business of developing and manufacturing life-enhancing and life-saving products without compromising quality or safety.

NGP. The pharmaceutical industry is facing the same problems regarding temperature-controlled transport as the food industry. Can you outline what some of the problems are in the cold chain and how they could be overcome?

RB. The growth in cold-chain products within the pharmaceutical industry has been dramatic.

Such products tend to be high dollar and the margin for error in their supply chains is therefore relatively narrow. In addition, development has lagged in the transportation infrastructure for these products. While refrigerated and frozen trailers are common in the food industry they are not well suited for dual assignments. The major parcel carriers have been reluctant to modify their operations to accommodate such products, and the limitations of packaging forces costly overnight or two-day air transport.

Richard Beeny is co-founder and Chief Executive Officer of LifeScience Logistics. He has more than 15 years of supply chain experience and has held a variety of operations, marketing and business development roles. Beeny most recently held leadership positions at United Parcel Service and has served in both the US Navy and US Coast Guard.

There are also gaps at the wholesaler level.

Manufacturers can document transit conditions to the wholesaler, but lose visibility once it hits their docks. As a result, patients cannot be assured that their medications have been strictly maintained to the manufacturer’s guidelines. I believe we’ll begin to see greater oversight, with respect not only to refrigerated and frozen products, but to controlled-ambient products as well.

NGP. Can you outline some of the supply chain trends for the US healthcare sector, including those associated with the changing relationships between suppliers, physicians and hospitals?

RB. Both manufacturers and healthcare providers seek greater transparency and collaboration in their supply chain. By sharing information, they will improve patient care while driving down costs. Demands for greater security, pending and current pedigree legislation, and consumer demands for lower costs seem to be at odds. While a direct-to-consumer model is promising, it is separated by a wide gulf from today’s wholesaler-dominated supply chain.

Specialty pharmaceutical companies have made some progress in narrowing that gap, but the rest of the industry is far behind. The current trend in the US healthcare sector resembles that in the high-tech sector of 15 or 20 years ago.

We’re doing a lot of work on direct to consumer and vendor managed inventory projects. I think that trend will only increase as the power in the supply chains shifts away from wholesalers and toward consumers.

NGP. What are the technical innovations that are currently improving the pharmaceutical supply chain?

RB. There is little doubt that RFID has grabbed the lion’s share of attention over the last few years. Security and pedigree issues are driving more and more pilot operations, but most pharmaceutical companies are reluctant to be on the bleeding edge of adoption rates.

Once the standards and expectations have been clearly defined, we’ll see much more progress in that area.

From my perspective, some of the more intriguing projects that we’re working on are vendor-managed inventory (VMI) initiatives, which enable manufacturers to eliminate or significantly reduce the carrying costs for raw materials. This approach is beginning to gain traction in the pharmaceutical industry. I believe an adoption of VMI may prove to be the most effective tool a manufacturer can utilize to reduce the cost of bringing products to market.

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SAFETY

Early

warnings

William Kluwe of Novartis Pharmaceuticals on the increasing focus on preclinical safety and the looming threat of counterfeit drugs.

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hat we’re currently trying to accomplish in early development is to quickly advance the new candidates coming out of our research operations into clinical decision-making. Then, if we know we have a good therapeutic agent, we can start investing more confidently in it. Our major concern is with translatability. We do some very elegant experiments in the preclinical stage, but we need to see how that will translate into both clinical efficacy and clinical safety. We’re always searching for tools that will enable us to do that more quickly.

Drug safety is of paramount importance in the pharmaceutical industry and it raises a number of challenges for us. I think a principal challenge now is fundamentally changing the way we look at the concept of safety.

We used to focus our efforts preclinically on identifying the major safety issues that

could prevent us from going forward with a new experimental medicine. We’ve done a pretty good job of that, quite frankly, and we don’t see a lot of toxicity in our early clinical trials. But now we’re increasingly expected

sociated with use in particularly susceptible patients. That is, can we provide a scientific basis for why a defined safety risk is acceptable for the therapeutic drug class that we’re trying to develop and the patient population

“We don’t want to be in a situation where we’re promoting the safety of a new drug candidate and the regulator is looking for possible inadequacies in our development program” to characterize a risk/benefit equation in the preclinical stage.

We’re not highlighting just the overt toxicities associated with excessive doses, but what might be more subtle adverse events as-

targeted? We also have to consider how we would effectively communicate that safety risk to a patient thinking about participation in a clinical study, or to a clinical investigator considering whether the patients that they

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Faking it A major problem facing the pharmaceutical industry is counterfeit medicines. The problem is much more widespread than most consumers realize and can emerge in several different forms. There is a risk of subtherapeutic treatment because a counterfeit product doesn’t meet the strict specifications of the genuine product, so the patient may be getting effectively a much lower dose than needed to derive medical benefit. Conversely, the consumer may overdose because of poor manufacturing quality control or contamination. Non-therapeutic materials might get into a counterfeit drug because it’s less expensive to make it that way, or the illegitimate producer doesn’t have the technical capabilities to produce high grade material.

Often such contamination is what leads to product toxicity. But since the person who’s seeing the outcome has no idea whether or not the victim has received a legitimate drug or the counterfeit, the assumption is that the drug itself is causing the problem. As a result, our attempts to monitor for subtle drug toxicity are being put at risk by the use of counterfeits.

Counterfeit drugs: It all adds up Sales are predicted to reach $75 billion by 2010, a 90 percent increase from 2005 Estimates say between one and 10 percent of drugs sold in developed countries are counterfeit In developing countries that figure is between 10 and 30 percent 50 percent of drugs bought over the internet from vendors who conceal their address are counterfeit Source: World Health Organization

have access to are good candidates for a specific clinical trial.

My expertise is not in pharmacovigilance, or monitoring the safety of currently available drugs; it’s more in the preclinical phase attempting to predict human safety.

We try to identify not just the specific toxic events that may occur in patients based on the results of safety testing in the laboratory, but more specifically the hazardous molecular pathways that are being affected.

From that understanding we can make a better prediction of how an undesired response might manifest itself in a clinical population. If we see toxic effect ‘A’ in our animal species, it doesn’t necessarily mean we’ll see the same exact response in humans, but with a complete understanding of how toxic effect ‘A’ occurred we can

better predict what a similar response would look like in humans and how likely it is to occur. Then we can provide better guidance on what should be monitored in the clinical trials to optimize human safety.

From this point forward the concept of ensuring the safety of therapeutic drugs is going to become more important as drug developers become full partners in the drug approval process. We’re looking to achieve consensus on what the safety implications of new drugs are, and to ensure that when we do carefully controlled clinical testing we fully explore all potential safety issues.

When ultimately we submit a new product to worldwide regulatory authorities for review and approval, our intent is to engage in a frank and open dialogue concerning risks as well as benefits.

William Kluwe is VP and Global Head of Safety assessment for Novartis Institutes for Biomedical research. He is responsible for the planning, interpretation and integration of preclinical safety information into the drug discovery and development functions. Prior to joining Novartis, he was with Pfizer Pharmaceuticals’ Global r&D, where he was most recently VP, Strategic alliances, focusing on collaborations with emerging biomedical companies, applied academic researchers and venture capital organizations.

We don’t want to be in a situation where we’re promoting the safety of a new drug candidate and the regulator is looking for possible inadequacies in our development program. Rather we need to be seen by each other as full partners in considering appropriate conditions of use. Do we fully understand the safety implications of a new drug? Have we characterized them appropriately? Are we able to come to a joint agreement on approval? And, perhaps most importantly, how do we communicate risks along with benefits? How do we make sure patients using the drugs and their prescribers are able to recognize the early symptoms of possible adverse response, take appropriate action and thereby become full partners in minimizing drug toxicity? 

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INDUSTRY INSIGHT

All-in-one solution K

VP Pharma and Veterinär Produkte GmbH (Germany) is a central production and logistics arm of Bayer HealthCare AG. The 450-strong company manufactures some 50 percent of all veterinary medicines sold by Bayer in a wide variety of forms across the world. This diversity is being exported to 100 countries across the world, and thus places high demands on the flexibility of plant, machinery and technology. KVP has decided to rely on the intelligent technology of KBA-Metronic AG for its package labeling.

Thorsten Schnatz is Director, Sales and Marketing (Coding and Marking Division) at KBAMetronic. He studied Economies at the University Würzburg, where he was awarded the academic degree of a Diplom-Kaufmann. Schnatz started his career at KBA-Metronic in 1998, where since 2004,he has been responsible for International Sales and Marketing.

The practical requirement

The complete solution

To allow small and medium runs to be handled quickly and efficiently, folding boxes in a variety of sizes were to be separated, printed, labeled and checked. Where possible, the solution for all these tasks was to be provided by one supplier. “The precision and reliability of the inkjet printer are of critical importance for the finishing process and the entire quality assurance procedure. The codes on the boxes must be absolutely identifiable in the optical inspection,” says Christian Riediger, the engineer in charge of the project.

KBA-Metronic AG designed an all-in-one solution for KVP. This solution is based on the UDA 150-S, which allows the folding boxes to be separated in an infinitely adjustable range from 80 x 40mm up to 600 x 550mm and precisely be led to the various labeling systems. It all starts with an alphaJET C inkjet printer with two print heads that codes and prints the folding boxes precisely, both portrait and landscape. The alphaJET C’s unique vertical resolution of 48 dots is particularly suitable for the encryption of data with 2D codes.

The inkjet printer receives printing data such as the 2D code, GTIN no., MHD and batch number from a production line computer and transmits this information to a downstream camera with which the unit is in constant two-way communication. The electronic control system cross-checks the printed data for content and quality against the data received and reports a fault in the event of errors or discrepancies at any time. In addition, faulty data is fed back to the production line computer. Thus, no data are lost.

The ttPRINT 53-i, an intermittently operating thermal transfer printer, was integrated into the UDA to meet the special font requirements of the Asian and Arabic markets. Sharp print quality at a resolution of 300dpi is achieved at speeds of up to 800mm/s (continuous mode).

The ttPRINT too, was linked with a camera system for reliable and efficientl data-check.

“The precision and reliability of the inkjet printer are of critical importance” This is where the continuous inkjet technology of Germany-based KBA-Metronic AG came into its own: the alphaJET C printed all the necessary pharmaceutical and data matrix codes in top quality, proven by a variety of inspection systems. “Another challenge to the flexibility of the system engineering are the folding boxes with automatic folding bases that have to be handled in a wide variety of sizes,” adds Riedinger. Here too, KBA-Metronic was able to hit the mark, with its UDA 150-S separating line.

As an additional safety feature, the UDA is equipped with a double-layer control to prevent unprinted copies from getting into the packaging process should folding boxes become jammed or glued together. This ensures optimum production reliability from the start to the end of the labeling process.

KVP is now operating with 18 alphaJET C printers, four ttPRINT printers and one UDA system – and the trend is upward.

Implementation of the KBA-Metronic technology enables KVP to achieve almost just-in-time manufacturing, delivering significant savings in stock management and planning. The solvent recovery facility of the alphaJET C units also saves KVP a not inconsiderable quantity of solvent. Not only is this good news when it comes to the bottom line, but this recovery system also means that the emissions produced in the processes are kept remarkably low.

The ttPRINT is similarly equipped with an automatic film-saving facility that sets image directly to image, avoiding costly voids in the thermal film. “It is our job to meet the international principles of good manufacturing practice for medicinal products, the requirements of the FDA and the high quality standards of Bayer HealthCare AG. By being optimized to our own particular needs, the system solution from KBA-Metronic is playing its part in ensuring that we can meet these high requirements,” Christian Riediger concludes.

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COMMENT

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Beyond blockbusters

Uncovering specialized therapies worthy of investment,

by Mike Burke.

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s many pharmaceutical companies struggle with their pipelines, success may no longer be defined by blockbuster drugs alone. Rather, some of the most promising pipeline products today are focused on specialty therapeutics, suggesting an alternative pathway for success in the industry. Regardless of how complex or challenging targeted therapies are to develop, there is significant opportunity – and need – for companies to champion medicines for much smaller patient populations.

Recent failures of late-stage pipeline drugs, the increasing number of patent expirations and drug safety issues have underscored the industry’s vulnerability when companies rely too heavily on a few billion dollar products.

Specifically: • From 2002-2006, the pharmaceutical industry brought to market 43 percent fewer new chemical-based products than in the last half of the 1990s.

• Drugs with US sales totaling $17 billion lost exclusivity in 2007, with generics replacing brand-named drugs in key therapeutic areas, and this number is expected to grow to a loss of $67 billion in sales for pharmaceutical companies between now and 2012.

• The US market sales growth for pharmaceutical and biotech products slowed to 3.8 percent in 2007 (from 8.3 percent in 2006), according to IMS Health.

• As safety controversies brew around a number of drugs, the FDA is issuing more refuse-to-file letters (11 were issued in 2007 alone), black box warnings, precautionary labeling changes and requiring larger studies of new drugs than ever before.

While companies have historically shifted their attention away from medicines that serve specialized patient groups to focus on larger populations, ‘me-too’s’ or only slightly differentiated products, a growing number of companies have found great opportunity in targeting therapies for smaller patient populations with unmet medical needs. With more than 25 million Americans and millions more throughout the world suffering from more than one of 6000 rare conditions, there is considerable opportunity for the industry to look at how and why therapies targeting specialized patient groups are not only good for patients but also good for business.

The following learnings may help pharmaceutical executives better identify areas of unmet medical need, which specialty drugs

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to pursue, and how to overcome challenges to successfully bring more targeted therapies to market.

Uncover unmet needs The initial step to shifting from large-scale to specialized markets is to identify critical voids where populations of severely-ill patients lack access to effective drugs, and then focus on medicines with the potential to help these groups. Companies can do this by cultivating strong advocacy relationships with patient and professional groups, as well as by listening to physicians about the needs in their practices.

For example, more than fi ve years ago, several leading child epilepsy thought leaders urged OVATION to acquire a highly promising drug for infantile spasms (IS) that was available in more than 50 countries around the world (although the clinical work needed to obtain approval in the US had never been completed).

We listened to the physicians and advocacy groups who were eager to have an approved treatment for this rare and devastating type of childhood epilepsy. In 2004, the company acquired the North American rights to a novel epilepsy drug and began working with pediatric neurologists to complete the development program for US approval.

Harness innovation An alternative, technology-intensive approach to drug development gaining momentum today is the push towards finding targeted treatments for niche indications based on a person’s

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genetic makeup (often called personalized medicine). The ultimate goal of this approach is to find the right drug for the right person at the right time, thus increasing the impact of treatment and decreasing potential side effects.

Further advances in molecular medicine will likely increase the prevalence of tailor-made therapies, many of which will then qualify for orphan exclusivity. This will enable companies to benefit from the economic incentives that come with developing therapies for rare conditions. Most importantly, more adequate treatments for serious, debilitating conditions for which there have been no effective treatment options will be available for the patients who need them.

Add low-risk projects When considering which development programs to take on, companies can substantially minimize their risk by pinpointing which medicines have the greatest potential – and also the shortest regulatory pathways – for ultimately achieving approval. Two strategies for finding lower-risk investments are:

physicians already treating a specialized/rare disease, we’ve found that we can supplement traditional data sources with medical claims and/or hospital discharge data. This provides valuable insights into symptoms being treated, as well as the physicians and institutions already diagnosing specific rare diseases, thus enabling us to target our outreach efforts directly to those most in need of our therapies.

“A growing number of companies have found great opportunity in targeting therapies for smaller patient populations” Consider outsourcing

A final consideration for companies looking to develop smaller-volume therapies is determining the most effective way to manufacture products while maintaining a consistent supply for 1. Looking abroad for therapies with proven track records. Specialpatients whose lives depend on it. ty therapies on the market in other countries typically have subFor small-volume products, having flexibility in production stantial clinical data available to demonstrate their efficacy and capabilities is essential. Working with contract manufacturing orsafety. Given that the likelihood of an unexpected safety issue ganizations (CMOs) allows companies to apply their technical exemerging is lower, these therapies often make the strongest tarpertise to the process of manufacturing a broad range of complex gets for development in the United States. These programs also formulations, while benefiting from the specialized processing have a more straightforward regulatory pathway, maximizing equipment different CMOs offer. In this way, the special needs of the potential for a successful outcome. each product are more likely to be met in each production cycle.

2. Seeking new indications for already-approved products. There The benefits of using a CMO are similar to the qualities of any are often significant opportunities to explore new uses for drugs good sports team. They enable currently within a company’s pharmaceutical companies to portfolio. We regularly inveshave just the right number of tigate how proven commercial Mike Burke is Chief Commercial Officer at players, equipment, training, and products might satisfy other OVATION Pharmaceuticals, where he oversees enough games in the season (i.e., unmet medical needs and help the sales, marketing and business development manufacturing runs) to develop even more people. For example, groups who work to support and grow the the medications they need at the an approved therapy for acute company’s currently approved therapies and volumes their patients require. porphyrias is being explored who identify new therapies to acquire, develop Taking a less-traveled path for treating other hematologic and bring to market. Prior to joining OVATION in the pharmaceutical industry and oncologic disorders. in 2001, Mike Burke spent nine years at Abbott brings its own unique set of chalLaboratories’ Pharmaceutical Products Division. lenges; however, the benefits of Develop marketing not following the beaten path – creativity An inherent benefit of pursuing a more targeted approach to and giving patients suffering from rare, life-threatening illnesses drug development is the built-in demand for these products. Comaccess to effective medicines that might not otherwise be availpanies working with smaller patient populations often find their able to them – are numerous. medicines are extremely well-received, taking on blockbuster sigOne of the best ways for the industry to continue moving fornificance for the patients who have had few, if any, other treatment ward and transcending current pipeline struggles, sluggish R&D options available. Yet the challenge is identifying physicians who efforts and regulatory concerns is to consider how we all might treat these patients. approach drug development in a different way. Having successCompanies can improve their chances of successfully commercialfully built and grown our business over the last seven years by not izing medicines for smaller patient groups by ensuring their marketing pursuing the next blockbuster, we’ve found that taking a look at teams use a personalized approach: pinpointing the right physicians disease states and patient groups lacking any effective treatment who, in turn, identify the patients in need of a specialized therapy. options, and seeing where and how we can serve them, is highly For example, where traditional prescription data doesn’t uncover promising, as well as deeply fulfilling. 

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SURVEY

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Fastest growing biotechnology companies In recent years, the biopharmaceutical industry has emerged as one of the most important sectors in the healthcare industry. Advances in life sciences have resulted in the drug discovery process becoming more science-intensive, with an increasing emphasis on cross-company collaborations and the exchange of information.

rowing commercial pressures and rising R&D costs have prompted many biotech companies to seek financial support from global big pharma corporations through licensing and collaborative R&D deals. Progressive enhancements in integration have subsequently led to traditional pharma companies becoming increasingly dependent upon the technology platforms and approaches adopted by biotech companies.

Theravance, Inc. is the fastest growing biopharmaceutical company in the world with a growth rate of 12,456 percent over a five year period.

However, Theravance also has one of the highest levels of net losses within the industry, highlighting the need

to sustain more stable, predictable and stronger financial performance.

ISTA Pharmaceuticals, Inc is the world’s second fastest growing biotechnology company, with a growth rate of 11,773 percent between 2002-06.

Palatin Technologies, Inc. is in third position with a growth rate of 6928 percent during the same period. In addition, Amylin Pharmaceuticals, Inc. recorded the greatest sales gains over 2002-2006, with an increase of $497.4million during this period.

The fastest growing biotechnology companies had a total R&D expenditure of $733.991 million in 2006, compared to total revenues of $1,149.62 million. This constitutes an increase in R&D expenditure of $324.7million since 2002, and a five-year growth rate of 179 percent.

Strong investment in R&D Compared to global pharmaceutical companies, the fast growing biotechnology companies constitute significantly higher levels of R&D expenditure. Furthermore, only five of them have revenues exceeding the R&D expenditure.

In order to support the funding of R&D the biopharmaceutical industry has actively sought the support of the major pharmaceutical companies through a variety of synergistic approaches. These have included various forms of collaborations, license and royalty agreements and joint ventures.

These synergistic relationships between major pharmaceutical companies and the biopharmaceutical industry help to: • P rovide a vehicle that the biopharmaceutical industry can use to outsource their sales/marketing and distribution of approved and authorised products.

• Improve the operational efficiency of the major pharmaceutical companies by out sourcing its R&D into specific target unmet needs.

• Support research into ‘leading edge technologies’ requiring long term financial investment, assistance and support through the regulatory, manufacturing and clinical trial processes.

Unfortunately, there is a high cost of funding associated with R&D in these innovative technologies, and a high risk associated with the failure to meet the regulatory requirements required for marketing approval. In response to these market forces, biop-

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harmaceutical companies are systematically introducing a combination of methods to reduce costs, shorten the time required to bring the new drugs to market and improve the probability of developing successful drugs. There are a number of key areas in the R&D process where these strategies are applicable and where they are having the greatest impact. Given the uncertainties associated with the drug discovery process, drug development and clinical trial activities, it has become necessary to determine the type of expenditure by either labour/capital materials or technological areas such as in bioinformatics, gene/protein expression platforms etc.

An evolving model The majority of pharma companies generate high returns, thus providing them with excess cash for further rapid growth – whether organic, or through mergers and acquisitions. The leading companies in the industry have been and continue to operate a strategy of acquiring business through mergers and acquisitions (M&A), alliances, new joint ventures and focusing on core business through spin-offs of non-core operations.

Flexible or adaptive clinical trial designs and proprietary internet applications are helping to bring products to market faster by improving the efficiency of clincial trials. A prominent example of this is MetaTrial’s electronic data capture (EDC) software.

Key biopharmaceutical companies Amgen is recognized as the largest biopharmaceutical company in the world and in 2006 was also ranked as the 14th largest pharmaceutical company. Genentech, the first well-known biopharmaceutical corporation, is currently the world’s second largest biopharmaceutical company, and is also ranked the 19th largest pharmaceutical company. n

KEY ISSUES • B iotech losses. Only 11 of the world’s top 20 biotechnology companies currently attain a positive net income. This trend is a key industry-wide issue, with companies now attempting to stabilize financial performance.

• D evelopmental uncertainty. Biotherapeutic developments continue to face a high level of uncertainty. A wide array of factors can contribute to the delay or late-stage failure of promising products.

• E xternal investment. Time-consuming, risky and expensive biopharma product developments require high levels of investment and investor patience, as market-generated revenues are often late in materializing.

Investors often pursue milestone payments, joint ventures, out-licensing deals, or M&A as alternative exit strategies.

• P artnership trends. The majority of dedicated biotech companies have attempted to establish strategic alliances, joint ventures and even mergers between themselves and major pharma companies.

Overall, the biopharmaceutical industry has emerged as one of the most important sectors in the healthcare industry as the drug discovery process becomes more science intensive and biotechnology companies increasingly focus and invest in R&D activities to drive growth. The rising R&D costs and growing commercial pressures have prompted many biotech companies to seek financial support from global big pharma corporations through licensing and collaborative R&D deals.

Flexible or adaptive clinical trial designs and proprietary internet applications are helping to bring products to market faster by improving the efficiency of clincial trials and it is by focusing on this area that biotechnology companies are able to drive strong growth in sales.

Evolution of the biopharma EVOLUTION OFcorporation THE BIOPHARMA

CORPORATION

TRADITIONAL PHARMA MODEL Scientific expertise

Drug Discovery (in-house)

Drug Development (in-house)

Commercialization (in-house)

Customer & physician assests

EMERGING PHARMA MODEL

Scientific expertise

Drug Discovery

Drug Development

Support for in-house or in-licensed candidates

Trials for in-house or in-licensed drugs

Trials through CROs or co-development partners

Commercialization

Sales and marketing focused on building customer assets

Customer & physician assests

EMERGING PHARMA MODEL Customer & physician assests

Scientific expertise Drug Discovery

Drug Development

Commercialization

Please visit www.companiesandmarkets.com for more information.

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A cure for the revenue challenge

By Shailendra Poddar

ife Sciences and healthcare companies today face significant challenges, including regulatory compliance, patent expirations, pricing pressures and the ever-increasing cost of R&D/new drug development.

These challenges are forcing companies to think differently and look at different ways to improve profitability while expanding products. Successful companies are increasingly seeking out performance management and analytical solutions that are designed specifically to help them meet these challenges. The effective use of these solutions enables companies to leverage critical information to reduce operational cut costs, improve forecasts, enable speed time to market and increase profitability.

One key area that organizations target is sales and marketing and the creation of a ‘customer-centric’ relationship view. Performance management solutions for pharmaceutical and healthcare sales and marketing enable companies to redefine their budgets, forecasts and enterprise planning models. These solutions enable a sales force to leverage customer

Shailendra Poddar is a Senior Director, Solutions Development at Niteo Partners, an NEC Company. A seasoned performance management practitioner, Shailendra has provided advisory and consulting services on performance management solutions across verticals like pharma/life sciences, financial services and manufacturing, at companies like Novartis, Boehringer Ingelheim, Johnson & Johnson and Merck.

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information gathered across various channels in order to enhance the planning and execution of sales activities.

By implementing rich customer centric dashboards powered by analytical business intelligence engines, organizations can move from reporting to proactive tools to manage the business. Organizations can leverage available data for key insights that lead to positive actions for improved physician targeting, drive alignment between managed-care distribution channels and drive overall alignment in marketing and sales processes for improved customer targeting and segmentation.

Organizations have a wealth of data to leverage in systems including ERP, CRM and CTMS to deliver the scorecarding, dashboarding and analytics required to optimize performance.

The right performance management solution enables companies to: • Gain a complete view of the clinical development process to increase efficiency and optimize the cost/value relationship.

• Monitor performance against key milestones such as investigator selection, IRBs, site initiations, enrollment, drug shipments and availability.

• Integrate plans and budgets to provide visibility into clinical spending, predict clinical expenses and maximize financial capital leverage.

• Aggregate customer, channel and product data for a single view of sales volume and to drive more targeted sales deployment.

• Enable driver-based planning to make better decisions about resource allocations such as marketing programs, advertising and samples.

• Improve contracting effectiveness through better planning and analysis of key performance indicators (KPIs), historical performance and scenario analysis.

• Monitor, measure and manage key risk indicators.

• Structure data and reporting to comply with HIPAA, CFR 21, PDMA, state marketing regulations and FDA NDA processes.

To maximize ROI, companies should look at business intelligence, enterprise planning and performance management solution to directly impact an organization’s operational and financial performance. Leading organizations such as Niteo Partners offer solution blueprints and analytical applications built around strategic relationships with Performance Management solution providers, which consist of pre-built data, process, and policy models. These models are built on proven best practices in life sciences planning, budgeting, forecasting and analytics.

Aligning performance with strategic corporate goals is perhaps the most pressing challenge facing companies today.

Organizations are competing for revenue and are challenged to ensure the effectiveness of their sales and marketing organizations. With the use of performance management solutions that leverage critical data systems, to deliver the scorecarding, dashboarding and enterprise planning tools, optimized performance is achievable. Today’s advanced visualization and analytical solutions enable executives and operational managers to take the proactive steps in impacting the business and servicing the increased demands of a more sophisticated customer base. n

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