NGPUS 19

Make it new How Paul Stoffels uses an entrepreneurial approach to innovation The X factor Fred Hassan’s secrets of inspirational leadership

www.ngpharma.com | Q3 2010

TOGETHERNESS

Staying power Persistence is the key to achieving operational excellence

pharmaceutical biotech academic

Why greater collaboration could be critical to solving the innovation deficit

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EDITORS NOTE 07

Getting together

Why open innovation will play a key role in shaping the industry’s future.

Y

ou could argue that anything done in a new way, however small, can be counted as an innovation. Introducing innovation at a game-changing level, however, is not so simple, and it’s only going to get harder for the pharmaceutical industry.

Twenty years ago, in the glory days of the 1990s, when pipelines were flowing and big pharma was busy chasing down and providing remedies for the more readily treatable diseases, introducing an ‘innovative’ drug was relatively easy. These were the blockbusters, the billion-dollar cash cows that gave the industry the solid financial footing that allowed it to weather the recent downturn.

But all good things must come to an end. Much of the low-hanging R&D fruit has been picked, and the remaining diseases are more difficult to design treatments for and tend to be found in smaller patient populations. On top of that, research from Sanford C. Bernstein estimates that generic erosion will knock between two percent and 40 percent off the revenues of the top 10 pharmaceutical companies between now and 2015, while only four of the 10 have pipelines containing products sufficiently valuable to offset these losses.

And according to the latest annual life sciences research from intellectual property group Marks & Clerk, more than eight in 10 (82 per cent) of those working in the drugs industry believe big pharma

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“Pharma, biotech and AMCs will work more and more in collaboration.

That’s where the innovation will come from” Mike Mentesana, Global Pharma and Life Sciences R&D Leader, PwC (Page 34)

will be unable to innovate sufficiently from within to replace blockbuster drugs going off-patent.

If companies are going to survive, they will have to look for new ways to come up with innovative compounds. This is where the idea of ‘open innovation’ comes in – the relaxing of the boundaries between a company and its environment so that they become more permeable, allowing innovations to move easily inward and outward. The concept is gaining hold within the pharmaceutical sector: giants such as Pfizer, Roche, sanofi-aventis and Bayer have programs in place to increase external collaboration and improve their R&D productivity.

In this way, the innovation deficit will spark an evolution, as companies are forced to change and adapt to the new environment in which they find themselves.

While it may be painful in the short term, in the long run it is bound to make the industry stronger, as those that get it right become more flexible and better placed to cope with change. Which can only be a good thing for our collective wellbeing.

Marie Shields Editor

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CONTENTS 9138

34

A new age of collaboration Is open innovation essential for the survival of the pharmaceutical industry?

Singled out Why Johnson & Johnson’s Paul Stoffels believes greater differentiation is the answer to the industry’s woes

Staying power Amgen’s Madhavan Balachandran on why persistence is key to implementing an operational excellence campaign

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84 Leading the way Fred Hassan opens up on what it takes to be an exceptional leader

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44 On the edge of eradication The breakthrough vaccine that could consign four deadly types of meningococcal disease to history

82

John Blakeley

Industry Insight 40 John McCarthy, Symyx Technologies Inc. 42 Warren Potts, Waters Corporation 80 Scott Boley, MPI Research 138 Caren Franzini, New Jersey Economic Development Authority

60 Imaging biomarkers: A primer Everything you ever wanted to know about the use of biomarkers in imaging and pharmaceutical research

68 New horizons Frost & Sullivan’s Sumit Sharma on the importance of emerging markets to the future success of the industry

74 Getting the numbers right Rosalind Cheetham explains why correctly forecasting clinical trial recruitment levels should be a priority

129 Michael Massari

68

104 Green medicine Why pharmaceutical companies need to clean up their act when it comes to waste management

108 Casting a wider net How Eli Lilly’s work toward a new networking structure could serve it well at the innovation table

112 Beware the Bribery Act Strategies pharmaceutical companies worldwide will need to take to avoid criminal liability

116 Jumping the regulatory hurdles Barthold Piening on the challenges of ensuring compliance in the supply chain

119 A new orbit for innovation How a shifting business environment will affect brand promotion

Executive Interview 48 Kim Shah, Thermo Fisher Scientific 50 Lars Pedersen, Visiopharm 78 Paula McHale, Perceptive Informatics 82 John Blakeley, ERT 88 Doug Hecker, Hovione 90 Robert Broeze, Laureate Pharma 122 Chris Nickum, IMS Health 129 Michael Massari, Harrah’s Entertainment

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CONTENTS

Ask the Expert

Details

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38 David Craft, BD 64 Holger Kissel, Taconic 117 Zach Henderson, Health Market Science 124 Barry O’Leary, IDA Ireland

Next Big Thing 66 Chris Moriarty, Randox 132 Denis Grant, University of Toronto, Tourism Toronto

Project Focus 58 Mehdi Adineh, ACR Image Metrix 92 Jan Rougoor, Siemens 94 Brandon Pence, Thermo Scientific HyClone Products

127 Travel: Las Vegas 134 Executive health 136 Airport lounges

141 Infographic 143 Gadgets 144 Photo finish

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NG Pharmaceutical Summit 2010 25 - 27 October 2010 The Fairmont Turnberry Isle Resort & Club, Miami

Find Out More Contact NGP 212 796 2000

The Next Generation Pharmaceutical Summit is a three-day critical information gathering of the most influential and important executives from the pharmaceutical industry.

The NGP Summit is an opportunity to debate, benchmark and learn from other industry leaders.

A Proven Format A Controlled, Professional and This inspired and professional format Focused Environment has been used by over 100 executives as a rewarding platform for discussion and learning.

“A great networking opportunity and a great chance to meet vendors in an unpressured setting. Much better venue for learning what they do” Daniel Adelman, SVP Development & CMO, Alvine Pharmaceuticals

Next Generation Pharmaceutical GDS Publishing, Queen Square House 18-21 QueenSquare, Bristol, BS1 4NH Tel: +44 117 9214000 E-mail: info@gdsinternational.com Legal Information The advertising and articles appearing within this publication reflect the opinions and attitudes of their respective authors and not necessarily those of the publisher or editors. We are not to be held accountable for unsolicited manuscripts, transparencies or photographs. All material within this magazine is ©2010 NGP.

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Innovation inspiration With pipelines drying up and companies looking outside their traditional areas to conjure up new innovation ideas, NGP thought it would be a good idea to inspire you with some of the best – and worst – innovations and inventions of the 20th century.

The pill Currently used by more than 100 million women worldwide, the combined oral contraceptive pill, or COCP, was originally approved for public use in 1957 by the Food and Drug Administration (FDA) under the name Envoid. Despite this approval, contraceptives were not available to married women until 1965 – with unmarried women having to wait a further seven years before they were able to use it – as the original Envoid had not been marketed as a contraceptive. Today’s standard dose ‘pill’ contains a third less estrogen than its rudimentary counterpart and has revolutionized choices for women worldwide.

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The polio vaccine There are in fact two polio vaccines used throughout the world to combat poliovirus. The first was announced to the world by Jonas Salk in 1955 and consisted of an injected dose of the dead poliovirus, followed closely by an oral vaccine tested by Albert Sabin and approved in 1962. The key to stamping out polio, as was realized soon after the vaccines were created, was to interrupt the person-to-person transmission of the virus through vaccination, as its chances of survival outside of non-primate environments was found to be remote. With the help of Salk and Sabin, poliovirus has been reduced from an estimated 350,000 cases worldwide in 1988 to roughly 1600 in 2007. Good job gentlemen.

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GPS

Automated sequencing machine Perhaps one of the more difficult innovations to pin down in terms of credit, the first fully automated sequencing machine was produced by Applied Biosystems in 1987 in collaboration with Leroy Hood and Lloyd Smith – who had also pioneered the first semi-automated sequencing machine the previous year. For the first time ever, it allowed for DNA sequencing to be performed with both speed and accuracy on a commercial scale. Where a person could produce a finished sequence of around 20,000 to 50,000 bases in roughly a year by hand, the new sequencing machines could reproduce the same results in a few hours – even the technique for sequencing stayed largely the same. It mapped the future for genome research and allowed scientists into areas previously thought to be untouchable.

Established in 1973 to overcome the limitations of previous navigation systems, the Global Positioning System (GPS) was created by the American Department of Defence. The system works through a space-based, global system of satellites that, provided there is an unobstructed line of sight to four or more GPS satellites, can transmit reliable time and location information in all weather conditions and at any time to a remote GPS device anywhere in the world. While the majority of us now use GPS in our cars to avoid having to wrestle with road maps, the original inspiration was – believe it or not – the Sputnik launch in 1957. A team of US scientists realized that the frequency of the signal being transmitted by Sputnik adhered to the Doppler effect, allowing them to pinpoint where the satellite was along its orbit by measuring the Doppler distortion. Makes pushing that button on your sat-nav seem that much easier.

E=mc2 If E is energy, m is mass and c is the speed of light in a vacuum – then Albert Einstein is a very clever man. And while he may not have been the first person to propose a mass – energy relationship, he was indeed the first scientist to interpret the mass – energy equivalence as a fundamental principle that follows from the symmetries of space and time. Essentially, the equation indicates that energy will always exhibit mass in whatever form the energy takes.

Einstein proposed his equation in 1905, and modern theory holds true to the cause by stating mass nor energy can be that from this, neither mas destroyed, destroye only moved from one location to another. l It has h served the progression of countless gre theories and provided the practical applications pra that th will continue to fuel the fires of innovation for years to come.

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Aerogel Widely used in commercial circles, but perhaps bestknown for its use by NASA’s aerogel is a manufactured material with several remarkable properties: most notably as a thermal insulator and as the world’s lowest bulk density material of any known porous solid. Born out of a bet between Samuel Kistler and Charles Learned in 1931 to see who could replace the liquid in ‘jellies’ with gas without causing shrinkage, aerogels today are used for a variety of appliancations throughout many industries. NASA, for example, uses aerogels to trap space-dust particles aboard the Stardust spacecraft and also as a thermal insulator for the Mars Rover and their spacesuits. The material is produced by extracting the liquid component of a gel through supercritical drying, allowing the liquid to be slowly drawn off without causing the solid matrix in the gel to collapse. Simple.

The World Wide Web What has now become the standardized entrance portal into the alternate reality we call the internet, started life as a proposal by Sir Tim Berners Lee in 1989. A few years later, and with all the necessary programs up to speed with Lee’s intentions, the World Wide Web was floated into the public domain in 1991. It is of interest to note here that while the terms World Wide Web and Internet are bandied around in everyday speech without much distinction, they are in fact completely separate in definition. The internet refers to a global system of interconnected computer networks, while the Web is an application that runs on the Internet.

Remember that next time you’re rummaging through one of the 109.5 million currently operating websites.

Bionic contacts Still in the development stage, the extremely sci-fi ‘bionic contacts’ hope to provide a virtual display that could one day be used for any number of uses – from helping the visually impaired to working within the video game industry. The lenses require organic materials that are biologically safe, while the electronic circuits are built from a layer of metal a few nanometers thick and light-emitting diodes a third of a millimeter across. Babak Parviz, Assistant Professor of Electrical Engineering at the University of Washington, said: “Looking through a completed lens, you would see what the display is generating superimposed on the world outside.” Indeed, wireless communication, radio frequency power transmission and solar cells are all expected to be seen in future developments – quite literally.

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Keep thinking Motorized surfboard: Those pesky ponds getting in the way of your commute again? No problem, just get yourself a motorized surfboard and stand proud in your bowler hat and suit while everybody else looks across with envy. Or at least that’s what Joe Gilpin thought would happen in 1948.

Phone-answering robot: You may be thinking, ‘we already have one of these – it’s called an answering machine’ – but you’d be wrong. Because the only thing the robot that Claus Scholz of Vienna invented in 1964 could do was to pick up the phone. It couldn’t speak, deliver messages or pass the phone to anybody else. And it was life-size.

Baby cage: If you’re having space problems at home with a new addition to the family, then this is sure to add to them.

An inventor from the 1930s thought it might be a good idea to hand out what were referred to as ‘baby cages’ to members of the Chelsea Baby Club in London, England. Essentially, it consisted of a wire cage that could be attached to the windows of high-rise apartments in order to give your little loved-ones time in the freshest of air, without any sense of worry about having your child dangling over a busy street.

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A cancer-beating alliance Why three of pharma’s biggest companies are heading to Asia to join forces for the greater good.

T

his February was witness to three of pharma’s biggest players, Pfizer, Merck and Eli Lilly, as they collaborated to form the Asian Cancer Research Group, Inc. (ACRG). The fully independent, not-for-profit company was established to accelerate research and ultimately improve treatment for patients affected with the most commonly diagnosed cancers in Asia.

With a growing trend in pre-competitive collaborations between pharmaceutical companies being noted in recent months, the ACRG’s formation is a prime example of how companies are combining their resources and expertise to rapidly increase their knowledge base of disease and diseases processes.

The heart of the ACRG is to improve the available knowledge of cancers prevalent in Asia and to accelerate drug discovery efforts by freely sharing the resulting data with the scientific community.

Gary Gilliland, SVP and Franchise Head for Oncology at Merck, confirmed: “Through its work and the subsequent sharing of information, the ACRG hopes to empower researchers, foster innovation and improve the prognosis and treatment of patients with cancer.” Initially, the ACRG will focus on the two most common cancers in Asia – lung and gastric cancers. As many as 40 percent of patients with lung cancer in Asia demonstrate a mutation known as an epidermal growth factor receptor, or EGFR, that seems to remain relatively uncommon in the Western population.

However, while it’s clear that EGFR mutations are indeed a larger concern for Asian patients, it is of specific interest to note that they are not ‘rare’ in Western patients, and as such should be part of a paradigm shift to change the mentality and understanding of the patient pharmacogenomics in order for clinicians to be able to treat each patient appropriately based on their mutation status in both Eastern and Western populations. In addition, the mutation responds differently to certain types of agents, suggesting that an alternative approach is needed in developing treatments for certain patient populations.

The flipside of the coin will see the ACRG dealing

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40% OF ASIAN LUNG CANCER PATIENTS HAVE EGFR

GASTRIC CANCER KILLS

630,000 A YEAR

WHO PREDICTS

12 MILLION DEATHS IN 2030

“We’ve done a very good job as an industry and that’s where the innovation defecit comes from” For more on innovation, check out our cover story on P.34

with gastric cancer, which has reached near epidemic proportions in China, Japan and Korea, making it the second largest cause of cancer death worldwide, killing more than 630,000 patients per year – more people than all cancers combined in the US. Neil Gibson, Chief Scientific Officer of Pfizer’s Oncology Research Unit, stated: “Environmental and genetic factors are believed to underlie the dramatic differences in the molecular subtypes and incidence of cancer in Asia and other parts of the world. Although some progress has been achieved in the last few years in understanding and treating these cancers, they remain a huge unmet need and a disproportionate health burden to Asian patients.”

Over the next two years, the three pharmaceutical giants have committed to create one of the most extensive pharmacogenomic cancer databases ever witnessed. It will be composed of data from approximately 2000 tissue samples from patients with lung and gastric cancers, which will be made publicly available to researchers and, over time, further populated with clinical data from analysis of patient data. It is hoped that conducting such comparisons of the contrasting genomic signatures of these cancers could inform new approaches to treatment that are sorely needed.

In terms of dividing up responsibility, Eli Lilly has dedicated itself to taking on providing the data to the research public through an open-source concept managed by its Singapore research site, with all three companies throwing all they have in terms of technical and intellectual expertise into the project.

Kerry Blanchard, VP and Leader of Drug Development in China for Eli Lilly, was extremely positive about the project, saying: “The ACRG is about sharing information for the common good. This company will aid researchers around the world to develop diagnostics, tailor current treatments and develop novel therapies to improve outcomes for affected patients with lung, gastric and perhaps other forms of cancer.”

For the pharmaceutical industry and healthcare alike, the ACRG could `prove to be the ignition point in combating cancers in the Asia-Pacific region; considering the current state of the pharmaceutical pipeline, it could also turn out to be some good reconnaissance for the future of emerging markets within the industry.

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Best of the web Here are the top recent stories from the NGP website, www.ngpharma.com GSK settles Avandia lawsuits GlaxoSmithKline (GSK) announced that it has settled thousands more lawsuits brought against the pharmaceutical company by patients who alleged that its anti-diabetic agent Avandia causes heart attacks.

A spokeswoman for GSK, Claire Brough, revealed that the company has settled consolidated cases that were due to appear in court in Philadelphia – approximately 5000 cases, it is estimated. Brough refrained from giving any additional details, including the number of cases settled, or the financial terms agreed in the settlements.

FDA may approve female Viagra Women’s sexual libido has long been something of an enigma and the pharmaceutical industry has so far struggled to find a female equivalent to the hugely successful Viagra. The German pharmaceutical company, Boehringer Ingelheim, is, however, optimistic it has have found the answer and will be seeking approval from an FDA committee next month for Flibanserin, a drug that has been shown to increase women’s elusive sexual desire.

Flibanserin was originally developed as an anti-depressant but, during three separate trials, it was discovered that the drug did nothing to elevate mood and instead had a significant effect on female libido. Following this discovery, Boehringer Ingelheim decided to trial the drug’s effectiveness for hypoactive sexual desire disorder (HSDD), which is characterized by a lack or absence of sexual desire and marked distress.

Humira will be world’s best-selling drug Humira, the anti-inflammatory blockbuster produced by Abbott Labs, will be the top selling drug by 2016, according to a report by EvaluatePharma.

EvaluatePharma claims that revenues for Humira will grow by nine percent annually for the next five years, meaning that its overall value will reach $10.1 billion in 2016, good enough for top spot. The report say that Roche’s cancer treatment Avastin (bevacizumab) would likely have been number one had it not been for some ‘clinical setbacks’ recently. As a result, Avastin will likely record sales of around $8.9 billion in 2016.

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High court confirms lawsuits can proceed The Supreme Court have confirmed that investors who lost millions when Merck pulled its blockbuster pain drug Vioxx off the market, can go ahead with a lawsuit against the pharmaceutical giant.

Merck confirmed in a statement that it is disappointed with the decision. The ruling means the case will return to the federal district court in New Jersey for further proceedings.

“Merck is disappointed in today’s decision, but believes that the allegations in the complaint are unfounded and will continue to defend itself vigorously,” said Bruce Kuhlik, Merck Executive Vice President and General Counsel. “The company has already made a motion to dismiss the operative complaint on numerous other grounds, and will renew that motion in the district court.”

Crisis for cancer drug testing According to a new report, cancer clinical trials are ‘in crisis’ in the US and are falling short of their potential to conduct the timely, large-scale, innovative clinical trials needed to improve patient care.

The report was released from the Institute of Medicine, commissioned by the US National Cancer Institute in line with the Clinical Trials Cooperative Group after a number of stakeholders grew concerned, according to PharmaTimes.

The report suggested that unless systems are looked at and changes carried out across the board, improved treatments for cancer will be delayed and patient lives will be lost unnecessarily.

For more of the lastest pharma news, visit www.ngphama.com

And now for something completely different…

Ever wondered how an architect could ergonomically lly design sand dunes as living spaces? Think you know all there is to know about synthetic life? Enjoy being inspired by the spoken word? Even if you don’t need any of these questions answering, an amazing website that is sure to fuel your inspirational juices is only a click away. Originally a travelling seminar showcase, TED opened itself up to the masses a few years ago and ever since has been informing, intriguing and fascinating audiences worldwide through airing its seminars online for free.

Simply visit www.ted.com and expand your think tank.

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International news

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1. The boycott begins Danish drug companies Novo Nordisk and Leo Pharma have announced that they will both be withdrawing medicines from the Greek market following the Greek government’s decision to slash drug prices by 25 percent. The first to reject Greece’s price cuts was Novo Nordisk, which announced it would be ceasing supplies of 17 of its most advanced products on a temporary basis. Not far behind, Leo Pharma confirmed that it had issued a Notification Letter of Discontinuation outlining the potential withdrawal of 18 of its 29 medical products.

The price cuts form part of the Greek government’s attempts to curb the country’s enormous debt crisis. In order to return the $135 billion, threeyear bail-out package agreed by the International Monetary Fund (IMF) and eurozone members, Greece has had to begin a series of wide-ranging price cuts.

According to the BBC, Greece was one of the three most expensive countries in Europe for medicines and as such, pharmaceutical companies had an obligation to accept price reductions. In addition, it is alleged that Novo Nordisk is owed $30 million, with Leo Pharma claiming an even larger $45 million.

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To read more, visit: www.ngpharma.eu.com

2. Supermarket sweep UK supermarket giant Asda has announced that it will begin selling cancer drugs on a ‘not-for-profit’ basis following the success of an earlier scheme selling IVF treatments. Currently, many of the cancer drugs are deemed too expensive to be available on the National Health Service (NHS), with Asda calling for the entire industry to follow suit and for privately prescribed cancer drugs to be made cheaper.

Research conducted by the supermarket chain revealed mark-ups of up to 76 percent on seven of the most commonly privately prescribed drugs in British pharmacies and claimed that 63 percent of people are unaware that private prescription prices vary between pharmacies. Tesco, Sainsburys and Superdrug – all in direct competition – have responded quickly to the announcements, stating that they will at least match Asda’s prices.

To read more, visit: www.ngpharma.eu.com

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3. A helping hand Ageless Italian Prime Minister Silvio Berlusconi has lent a small but helping hand to the pharmaceutical world by becoming the main shareholder of Molmed, a company currently in the advanced stages of testing two cancer drugs, through his holding company Fininvest. The 73-year-old, who has previously overcome prostate cancer and a heart condition, recently stated at a political rally that he and his government wanted “to win the battle against cancer”.

Berlusconi now owns 24 percent of the company and has named his youngest son Luigi, 21, on to the company’s board of administrators.

4. Innovation denied According to a group of European drugmakers, Chinese patients are being denied innovative new medicines because of continued problems with the country’s clinical trial process. Compared to a 60-day approval timeline for clinical trials in Europe, China has an excessive nine to 12-month waiting period before approval is even sniffed at, with a lag of at least two years between drug registration when comparing the two regions, as reported by the European Chamber of Commerce in China (EUCCC) in Beijing this year.

For drugmakers operating in China, the most important development of 2009 was the update of the National Reimbursement Drug List (NRDL), which increased the number of Western drugs that Chinese patients can access through the healthcare system. However, according to the EUCCC, the list – which should be updated every two years – further restricts Chinese patients’ access to innovative medicines if it is not updated.

Combined with this is the fact that hospital financing levels have remained low, with bidding policies based mostly on pricing rather than quality. The EUCCC concluded that China’s goal of becoming an innovative society by 2020 is being jeopardized by the long and unnecessary approval processes for clinical trials that continue to be endured by its population.

05

5. Diabetes approval Danish pharmaceutical company Novo Nordisk has recently announced that it has received approval of the price of its once-daily human GLP-1 analogue drug, Victoza, for the treatment of type 2 diabetes from Japan’s Central Social Insurance Medical Council – the advisory committee to the Minister of Health, Labour and Welfare.

The price approval will allow Novo Nordisk to commercially launch the drug in Japan shortly after it’s officially posted on the National Health Insurance price list in June. Originally approved in January, Victoza had a specific clinical development program set up to be specifically tailored to the needs of people with type 2 diabetes in the country, and is the first GLP-1 to achieve regulatory approval and commercial availability in Japan.

6. The new brain

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A German research team have reported a major step forward in discovering a therapy for neurodegenerative conditions such as Alzheimer’s and strokes. The researchers, from the German Research Center for Environmental Health, were able to convert glial cells of the brain into two different functional classes of neurons.

In the study, the team showed how astroglia could be directly converted into the two main classes of cortical neurons, made possible by the selective transduction of specific proteins that regulate the transcription of DNA. From these encouraging results, the researchers intend to pursue this avenue further to gain new neurons from the glial cells present in the brain in order to find therapies for neurodegenerative diseases such as Alzheimer’s.

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New ways to innovate

I

Deciding which projects to fund

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any important problems faced by decision-makers involve multiple conflicting objectives. When faced with truly difficult decisions involving high stakes, and risky and conflicting objectives, this transparent approach will help to guide decision-makers toward better, more defensible choices.

Question: What do the following have in common: military base closure candidates, new technologies for radioactive waste remediation, IT projects within a medical devices company, and new drug candidates?

Answer: All of these situations involve prioritizing alternatives in an environment that had multiple objectives.

In such situations, many experienced decision-makers move directly to the alternatives at hand and start working on which project is the least or the most ‘important’. Senior management often do not agree on what is important – making agreement on prioritization nearly impossible.

Ralph Keeney affirms in Value-Focused Thinking: A Path to Creative Decisionmaking that, “Values are what we care about…[they] should be the driving force for our decision-making….” The value-focused thinking (VFT) method does just that.

The emphasis is on uncovering and discussing the driving values of the company, then quantifying the alignment of projects with these values.

Once the company develops a structured view of its own objectives, projects can be compared against these objectives to reveal value gaps. Modified or hybrid projects are often developed that help eliminate the value gaps. The method we use is consistent with VFT and works well in building a valuation model.

The ultimate goal is to add clarity to the decision at hand and encourage higher value alternatives to be selected. The decision-makers should be confident that the valuation results have captured the key areas of concern, have captured them consistently, and the results represent a more holistic view of the project’s value to the company.

For more information, please visit www.kromite.com

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n tough economic times, innovation can be challenging. Direct and indirect costs hover over all businesses in the pharmaceutical industry and the contract research laboratory. Progress cannot come to a grinding halt because of difficult times.

Instead, it is time to become creative with what you have. Many pharmaceutical companies have the same or more goals to do with fewer resources.

Regulatory agencies are not changing policy because of economic times, so the same quality results still have to be obtained.

A creative way to accomplish these goals is to outsource more parts of the study to qualified laboratories that have the resources, instrumentation and drive to meet your requirements. Outsourcing assay development, genotyping, nucleic acid purification, bioinformatics, microarray analysis, tumor profilng, sample management and biostorage, to name a few, can relieve internal strains and be cost effective.

Re-examination of the clinical trial design is another way of being innovative during challenging times. In a pharmacogenomic trial, the study design team should analyze the cost of running single assays or performing microarray analysis. If there is not a pharmacogenomic component in the trial, it is also smart and innovative to draw a pharmacogenomic sample at entry to the trial. If any unexpected event arises in the trials, there is a sample to come back to and analyze, thus saving time and money needed to re-recruit, re-draw, re-consent and analyze those subjects.

If a company is considering outsourcing part of the clinical trial, it is imperative that the organization that it is outsourced to has a sound history, sound scientific staff, quality results, and good customer service.

For more information, please visit www.gentris.com

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Dosen’t seem to be a heart beat. This new stethoscope needs work.

Company index Q3 2010 Companies in this issue are indexed to the first page of the article in which each is mentioned.

454 Roche Life Sciences 47 ACR image Metrix 58, 59, OBC Aerotek 115 Astellas Pharma Europe 34 Bayer 34 BD 38, 39 Bio-Rad 15, 73 Chemistry Logic KFT 6 Definiens 63 ERT 21, 82, 83 Gentris 24, 27 Grace Davison 2 Harrah’s Entertainment 32, 129, 131 Harvard University 34 Health Market Science 117 Hovione 88, 89 IDA Ireland 124, 125, IBC

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IMS Health 122 Johnson & Johnson Group 52 Kromite 24, 25 Laureate Pharma 90, 91 Marks & Clerk 34 Massachusetts General Hospital 34 Medici Global 77 Metastorm 111 MIT 34 Motorola 102 MPI Research 8, 80, 81 NNIT 4 New Jersey Economic Development Authority 138, 139 Olympus America 10, 50, 51 Perceptive Informatics 78, 79 Pfizer 34

PricewaterhouseCoopers 34 Puerto Rico Convention Bureau 140 sanofi-aventis 34 Siemens TS 92, 93 Symyx 40, 41 Randox 66, 67 Taconic 64, 65 Thermo Fisher Scientific 48, 49 Thermo Scientific Hyclone Products 94, 95 Toronto Convention & Visitors Association 132, 133 Trialcard 13, 118 Ubichem IFC University of Toronto 132 Visiopharm 50 Waters 42, 43 Wynn Las Vegas 126

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UPFRONT

Top executive salaries

Head of the pack

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ver the past three decades, executive compensation has risen dramatically, far surpassing the wage of the average American worker. With this in mind, NGP takes a sneak peak at the country’s top earning executives to find out how the pharmaceutical industry measures up.

In a modern US corporation, the CEO and other top executives are paid a salary plus short-term incentives or bonuses. This combination is referred to as ‘total cash compensation’ (TCC). Short-term incentives are usually formula-driven and have some performance criteria attached depending on the role of the executive. For example, a CEO’s criteria could be based on incremental profitability and revenue growth.

Comparison

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eading-up the pharmaceutical industry’s CEO counter attack is Ronald Williams, CEO of Aetna – a diversified healthcare benefits company. Having been with the company for a total of eight years, Williams has undoubtedly left a lasting impression as head of the company for the last three years as his total take-home compensation was an astonishing $38 million. Astonishing in the sense that, when compared to Ellison, it seems as though Williams takes home mere pennies.

Next in line is Thomas Ryan, CEO of CVS Caremark, one of the nation’s largest chains of pharmaceutical providers. Having been CEO for the past 11 years, he currently owns $84 million in company shares, with a total compensation package of $36 million. In at number three is Miles White, CEO of Abbot Laboratories, who nets a total compensation of $27 million for being in charge of heading up the development of many popular drugs over the past 10 years for the company.

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eading the way on the executive salaries list is Oracle Corporation, a multinational computer technology corporation, which by 2007 had the third-largest software revenue after Microsoft and IBM. It gave its CEO Lawrence J. Ellison a total compensation package of $56.8 million.

Ellison founded Oracle in 1977, putting up a mere $1400 of his own money under the name Software Development Laboratories (SDL). Indeed, it pushed through its tough times – 1990 saw it laying off 10 percent of its staff and having a near miss with bankruptcy – but within the year, Ellison had turned his company round. This year has seen the European Union approve the acquisition by Oracle of Sun Microsystems by agreeing that “Oracle’s acquisition of Sun has the potential to revitalize important assets and create new and innovative products.”

Next, you have the likes of Proctor & Gamble, a multinational company that manufactures a wide range of consumer goods, which in early 2010 became the fourth-largest corporation in the US by market capitalization, surpassed only by Exxon Mobil, Microsoft and Walmart. It paid its former CEO, A. G. Lafley, a total of $23.6 million in 2009 – his last year before retirement. Lafley is largely credited with turning around P&G during his tenure under the mantra ‘Consumer is Boss’.

During his leadership, sales doubled, profits quadrupled, and P&G’s market value increased by more than $100 billion dollars.

Only woman

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he only woman to feature on the top salaries list is Brenda C. Barnes, CEO of Sara Lee, and previously the first CEO of PepsiCo North America. Barnes has been making a name for herself for a number of years now, having been ranked in Forbes list of ‘The World’s 100 Most Powerful Women’ since 2004. Then in 2009 she appeared at number 29 on the Forbes list.’

Barnes has shown that after taking time out to raise a family, you can also achieve a career – and a very successful career at that. In 2009, Barnes raked in $15,231,519 in total compensation. By comparison, the average worker made $40,690 – so Barnes made 374 times the average worker’s pay.

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A CEO’s first 100 days

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or every incoming executive in corporate America – as well as in politics – the first 100 days is considered crucial. It’s a period during which opinions are formed and long-term judgements are made – and for this reason, the first 100 days is usually seen as a pretty good indicator as to how successful a new CEO is going to be.

There are ways for an incoming CEO to prepare for a new role, but one of the most important is to research the company in order to understand and appreciate the culture of the organization they’re going to be heading up. Only based on this understanding can a new leader begin to think about the changes that need to be made.

Ron Culp, a partner and director at Ketchum Inc., one of the world’s leading public relations and communications firms, has overseen the first 100 days of CEOs at some of the world’s largest companies. He believes that before even taking up the role, a new CEO must “find ways of getting the culture to buy their leadership and then launch into the change or transformation effort” once in the role. “An incoming CEO must then make the necessary cultural, strategic and structural changes,” he says.

Of course, the nature of a new appointment – whether the previous CEO was dismissed or whether they left voluntarily – is important when it comes to how the new boss approaches his new position. Culp gives the following advice: “You need to spend time understanding the culture of the organization, and appreciate how critically important it is to come in and learn from the past. Even if you’re not embracing the current culture philosophically or operationally, you have to know where the troops are coming from and how they’ve operated previously, because if you object and just say ‘Nope, we’re doing a total shift in the way this organization is going to be run’, then there is a real potential for conflict.”

A CEO can also make life easier by taking into account even the smallest details, such as the nuances in word choice that they use. By understanding the language and terms specific to the company, the process of making changes can be facilitated. Indeed, Culp says that not neglecting the minor details within a company’s culture is his “number one piece of advice”.

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Appointments

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t the end of May, AstraZeneca announced that it in turn had hired Martin Mackay to the newly created post of President of R&D, effective July 1.

Mackay was Head of Pharmatherapeutics R&D at Pfizer, and his resignation leaves Mikael Dolsten, Senior Vice President and President, BioTherapeutics R&D, in charge. Dolsten was previously research head at Wyeth, which Pfizer acquired in October for $67 billion.

Jan Lundberg has joined Eli Lilly as Executive Vice President, Science and Technology and President, Lilly Research Laboratories, following the retirement of previous R&D chief Steven Paul. Lundberg was snatched from AstraZeneca, where he was Executive Vice President, Global Discovery Research, underscoring yet again the current battle for top talent in the industry.

Meanwhile, the chief financial officer of Ark Therapeutics Group Plc, Martyn Williams, has become the Chief Executive following the resignation of the previous incumbent, Nigel Parker, in the aftermath of the withdrawal of Ark’s marketing application for its lead drug, Cerepro.

Archimedes Pharma has announced the appointment of a new President and Chief Executive Officer, Jeffrey H. Buchalter, who has 20 years’ experience in the pharmaceutical industry and has held senior positions at a number of multinational pharmaceutical companies.

And Christopher Perkin has been named as Algorithme Pharma’s President and Chief Executive Officer. After holding several key positions at Huntingdon Research Center and Beecham Pharmaceuticals, Perkin joined the Charles River Laboratories in Quebec, Canada, where he rose through the ranks to Corporate Senior Vice President, Global Preclinical Services.

Jan Lundberg

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Managing change Eight years after stepping into the world of pharmaceuticals, Joe Jimenez struck his most important milestone in January and officially accepted the position of CEO for Novartis Pharma AG. Prior to his latest role, Jimenez headed up Novartis’ Consumer Health Division and successfully oversaw the progression of several promising new medicines – including multiple sclerosis pill Givenia and cancer drug Afinator.

His appointment at the head of a slimmed down executive board come as the company reported a 54 percent rise in fourth-quarter net profits to $2.3 billion, and just after his long-serving Swiss predecessor Daniel Vasella completed the acquisition of US eye-care group Alcon Inc. “One thing we are aligned on is the strategy of the company, which is one of focused diversification,” Jimenez told Reuters. “We believe that the portfolio now is broadly right to help us grow into the future so I don’t anticipate seeing significant changes there.”

This idea of successful diversification will, without doubt, be one of Jimenez’s biggest challenges in his new role as CEO. Indeed, Novartis’ acquisition of Alcon will be used to both spread the business into such areas as emerging markets and eye-care, but also to insulate against losing exclusivity on treatments such as its top-selling blood pressure drug Diovan when it loses patent protection in 2012.

Yet this is nothing new to Jimenez, who built and ran the ‘Project Forward’ strategy back in October 2007 to ensure Novartis would not only survive in a tougher environment – through tackling issues of development, productivity and dealing with commercial models – but also gain a competitive edge by shifting from an internally focused culture to one that is focused externally on the patients, customers, payers and providers.

“The pharmaceutical industry is a good industry,” he told NGP back in 2008, “but it is going through some tough times. The longterm prospects for the industry are very positive. With an aging population and with the cost of chronic illness accelerating, the capability of discovering and developing new and innovative medicines that meet unmet medical needs is going to position us very well for the future.”

His experience as President and Chief Executive of HJ Heinz will also be key: “In the consumer packaged goods world, cost savings and doing things more efficiently are very important because margins are not as high as they are in the pharmaceutical industry.

You’re always trying to become more and more efficient.”

Fast-forward to the present, and Jimenez’ mission now includes the need to focus on his shareholders’ attitudes towards redefining salaries by giving them the opportunity to vote on executive pay – a hot topic given the tight economic times, and particularly for Novartis with Vasella’s salary of over $19 million drawing criticism from both the press and investors alike. However, thus far he seems to be hitting all the right notes.

Watch for the next issue of NGP, in which Marie Shields travels to Basel to talk to Jimenez in person about his plans for Novartis.

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The pharmaceutical industry desperately needs to evolve in order to survive.

Is open innovation the answer? By Marie Shields

A NEW AGE OF COLLABORATION

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wenty years ago, in the glory days of the 1990s, when pipelines were flowing and big pharma was busy chasing down and providing remedies for the more readily treatable diseases, introducing an ‘innovative’ drug was relatively easy. These were the blockbusters, the billion-dollar cash cows that gave the industry the solid financial footing that allowed it to weather the recent downturn.

But all good things must come to an end. The days of blockbusters are over, and the industry is facing threats on several fronts. Treatments exist for most common conditions, pipelines are drying up and many of the patents still in force on big-earning drugs are due to expire soon.

According to the latest annual life sciences research from intellectual property group Marks & Clerk, more than eight in 10 (82 percent) of those working in the drugs industry believe big pharma will be unable to innovate

sufficiently from within to replace blockbuster drugs going off-patent.

The same research found that 97 percent expect patent life extensions to continue to grow in importance as companies seek to squeeze out revenue streams as blockbusters come up against the patent cliff, and that 67 percent predict substantial acquisition activity within the next two years.

The fi ndings, based on a survey of 381 executives across the pharmaceutical and biotechnology sectors, show that big pharma is becoming increasingly reliant on patent term extensions to safeguard essential blockbuster revenue. The gains from small molecule – based drug discovery have largely run their course, and the picture for pharmaceutical R&D has become much more challenging.

Faced with what many observers are calling an ‘innovation deficit’, companies are casting about for a

“I personally don’t feel there’s a major deficit in innovation. I believe it’s an evolution of the industry and of how we will develop drugs in the future” Mike Mentesana, PricewaterhouseCoopers

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different angle – something to keep them afloat in this new, blockbuster-free world.

Looking outside For some, the answer lies in open innovation; yet it isn’t always clear what this term means. Mike Mentesana, Global Pharma and Life Sciences R&D Leader for PricewaterhouseCoopers, gives the following defi nition: “The way I like to defi ne open innovation is collaboration. It’s about making sure there’s an inflow and outflow of knowledge that expands the market so collaboration or information exchange creates new opportunities. If we look holistically at the pain our industry is going through, it’s a combination of not enough collaboration, and the fact that the science is a lot harder.

“Over the last 10 to 15 years, the industry has done an amazing job in bringing new medicine to market,” Mentesana continues. “The drugs that are on the market now have turned many illnesses that were previously death sentences into treatable conditions.

“You can look at several examples – HIV, diabetes, even some forms of leukemia – there are drugs on the market now that have transformed that care pathway from ‘You will take it until you die,’ to ‘You will be able to live a lot longer and have a much better quality of life.’

“We’ve done a very good job as an industry and that’s where the innovation deficit comes from. A lot of the low-hanging fruit in terms of drug development is over. There will still be blockbusters, but they will be fewer and fewer.

“That’s why people are asking for innovation. And that’s why I term it as collaboration, because as we are aging as a population and living longer thanks to our drugs, the cost of care is going up, and how we pay for that is going to be a challenge. Combine that with the fact that drugs are under more scrutiny from a regulatory perspective, and that creates a bottleneck.”

Ken Jones, COO of Astellas Pharma Europe, has seen the trend toward collaboration developing worldwide. “What you’re seeing more and more now is a huge network of collaboration, be it with biotech companies or academic institutions, and even with sometimes key thinkers in some of the disease areas. There’s a lot of collaboration going on.

“Given the current fi nancial environment, some of the venture capital money that’s supporting these companies has been cut back, and we as an industry have been able to tap into that as well in order to get access to technology. Going forward, those collaborations will become increasingly important.”

Astellas – formed from the merger of Fujisawa and Yamanouchi in 2005 – has put this idea into practice with a cross-functional, cross-regional team called

STAR (Strategy Team for Therapeutic Area Reinforcement). “The whole idea,” says Jones, “is to look at everything from greater collaboration and dialogue to the clinical and commercial sectors of the business. At the same time, we moved our global development out of Japan to the US, to leverage global talent, recognizing that to be successful globally you need to be successful in the US and Europe.

“The real dilemma companies have is making sure that their research is working,” he continues. “You need to make sure it’s giving you potential compounds, but it’s also the speed in which you decide to kill a project or the speed at which you decide to move the project along and put resources against it and start bolstering the support for a molecule that you think has a higher chance of survival.

“Th is is where a lot of companies have struggled. In our case what we’re trying to focus on is to make sure that we make those decisions at the right time as quickly and efficiently as possible.”

Need for speed What else does the industry need to do to save itself?

PwC’s Mentesana believes the problem is being tackled, but perhaps not as quickly as it should be. “Maybe we’re not fi xing it fast enough. I think there are things that both pharma and biotechnology companies can do to improve their operational efficiency. It’s well known what some of the large pharmaceutical companies have been doing to attack their internal cost structure with respect to reducing costs. There are defi nitely some organizations that have cracked the code on this and there are some that are still working on tackling operational efficiencies.

“It’s my contention that the operational issues don’t mean anything if the science is there. And the fact that we spend a majority of our research and development dollars in the development space is important, because we need to make sure that we have efficacy and that we follow the protocols properly.”

He believes that what is needed is a more holistic approach: “We need to understand as an industry more around the pathophysiology of drugs. We need to understand how drugs flow through the body and how they interconnect; for example with kidney disease, I need to be able to look at the entire renal system as opposed to just focusing on the kidneys and how to fi x them.

“The challenge is operational and scientific. The scientific side can be divided into two parts: the balance of where we spend our money, and the collaborative piece.

Pharma, biotech and academic medical centers [AMCs] will work more and more in collaboration. That’s where the innovation will come from. It’s going to stop being a serendipitous event – a lot of drugs over the last two de-

Open innovation Open innovation is a term coined by Henry Chesbrough in his book Open Innovation: The new imperative for creating and profiting from technology.

Chesbrough is a professor and executive director at the Center for Open Innovation at UC Berkeley.

Open innovation assumes that the boundaries between a firm and its environment will become more permeable, thereby allowing innovations to transfer easily both inward and outward.

The concept’s central idea is that in a world of widely distributed knowledge, companies can no longer afford to rely entirely on their own research. Instead, they must buy or license processes or inventions (for example, patents) from other companies.

The flipside is that products invented internally that are not needed by the business can be taken outside the company, through licensing, joint ventures and spin-offs.

Continued on Page 37

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Innovation in pharma’s top 10

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What are the big pharma companies doing on open innovation and external collaboration? Do they have specific point of entry platforms/portals for external collaboration in the pharma industry, or other initiatives?

Below are the results of an online survey on the 10 largest pharma companies by revenue carried out by Viehbacher Stefan Lindegaard of Chris 15inno.

Lindegaard looked at the companies’ point of entry platforms/portals for open innovation or external collaboration (if they had any), the number of Google hits related to open innovation and the number of current employees having open innovation in their titles.

02 This is what he found (companies are listed in order of revenue): 6. Sanofi-Aventis 1. Johnson & Johnson Point of entry: Did not find any. Standard R&D site Point of entry: Did not find any. Standard R&D site Google hits (Sanofi-Aventis + “open innovation”): Google hits (J&J, open innovation): 19,800 2000 Number of employees with open innovation in their Number of employees with open innovation in their title (LinkedIn search): 0 title (LinkedIn search): 0 2. Pfizer Point of entry: Standard site on Licensing & Alliances Google hits (Pfizer, open innovation): 7670 Number of employees with open innovation in their title (LinkedIn search): 0 3. Roche Point of entry: Did not find any. Standard Partnering site Google hits (Roche + “open innovation”): 14,000 Number of employees with open innovation in their title (LinkedIn search): 0

03

04 7. AstraZeneca Point of entry: Did not find any. Standard R&D site Google hits (AstraZeneca + “open innovation”): 3530 Number of employees with open innovation in their title (LinkedIn search): 0

8. Abbott Laboratories Point of entry: Standard site on Global Licensing

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06

Google hits (Abott Laboraties, open innovation): 6450 Number of employees with open innovation in their title (LinkedIn search): 0 07

4. GlaxoSmithKline Point of entry: Innovation at GSK – a well-developed site Google hits (GSK + “open innovation”): 10,100 Number of employees with open innovation in their title (LinkedIn search): 4

5. Novartis Point of entry: Did not find any. Standard R&D site Google hits (Novartis + “open innovation”): 24,100 Number of employees with open innovation in their title (LinkedIn search): 0

9. Merck & Co. Point of entry: Did not find any. Standard R&D site Google hits (Merck, open innovation): 7640 Number of employees with open innovation in their title (LinkedIn search): 0

08

10. Bristol-Myers Squibb Point of entry: Did not find any. Standard R&D site Google hits (Bristol-Myers, open innovation): 2440 Number of employees with open innovation in their title (LinkedIn search): 0

While Novartis and Johnson & Johnson scored highest in number of hits, only GSK had employees with the term ‘open innovation’ in their titles.

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10

Used with the permission of Stefan Lindegaard, www.15inno.com, stefanlindegaard@me.com

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“You have to bring down the silos and make sure that you have the holistic view of what has potential” Ken Jones, Astellas Pharma Europe

Sanofi steps up

Continued from Page 35

In June of last year, sanofi-aventis presented a new R&D model aimed at increasing innovation, as the first pillar of its new strategy under recently arrived CEO Chris Viehbacher.

“The objective of this new R&D model is to propose innovative solutions that respond to specific, unmet needs of patients and continue our success in a very competitive international environment,” Viehbacher said at the time. “It is centered on the real needs of patients, the development of scientific networks and openness toward outside entities to strengthen creativity, and a flexible and entrepreneurial approach to research.”

Sanofi gave as its ambitious goal to have in place the most effective R&D organization in the pharmaceutical industry by 2013, as a way of anticipating the consequences of the “rapid evolution of the scientific environment”.

Under the new model, researchers will be grouped in more productive structures and engage in recruiting and training to adapt the profiles and skills of collaborators to the demands of these mutations. The model also includes strengthening (exploratory structures) that work in close collaboration with outside entities and deploying reactive entrepreneurial units to encourage the emergence of innovation and accelerate the marketing of innovative products.

Marc Cluzel, sanofi’s SVP of R&D, points out that, “We are living through radical times of change for research. Given the increasing complexity of the world of science, we need to change our approach to the patient, make use of novel technologies and create new concepts.

Tomorrow’s research will be carried out through networks. We will be open to knowledge from outside sources, becoming a key partner. We need to reinvent R&D.” As a step in this direction, sanofi has initiated a strategic alliance agreement with the Massachusetts Institute of Technology Center for Biomedical Innovation, known as the Sanofi-Aventis Biomedical Innovation Program (SABIP).

cades have been fueled by serendipity in terms of how they have been formed.

“I personally don’t feel there’s a major deficit in innovation. I believe it’s an evolution of the industry and it’s an evolution of how we will start to develop drugs in the future.”

New model What does all this grand talk of far-reaching change boil down to in practical terms? In the case of Astellas, says Ken Jones, it’s based on project teams being globally and functionally integrated, so that the right people are making key decisions.

“You have to bring down the silos and make sure that you have the holistic view of what has potential, and of the risks, and just being more efficient and effective in making those decisions. The biggest challenge is knowing when to cut projects; sometimes R&D projects seem to linger on longer and longer and finally they get killed. But if you think about it, you’ve wasted five years and millions of dollars trying to keep some of these projects alive when they should have been killed earlier.

“What we’re trying to do is make sure that we’re being more ruthless in identifying those molecules that we should continue to support and those that we should cut.”

Mike Mentesana points out that companies themselves will change shape so that in the future the industry will look vastly different from the current model of huge organizations carrying out a range of functions – research, development, marketing, sales, manufacturing – across the globe. While big companies will still exist, they will need to pursue different business models and try new methods to achieve the right balance.

“I don’t think we’re going to see one model anymore,” he says. “I don’t think there will be one way to do it. Some companies will be looking at becoming more research-based organizations, some will be focusing on their experts in development, and some will have expertise in marketing.

“You’re going to see an increasing level of the fragmentation that will drive the evolution of the industry’s business model. And the final element in the interconnectivity is technology, specifically with AMCs and hospitals and within the pharma companies with the biotech companies. There’s talk about having a Google for the health space; Google is working on it right now, and so are Microsoft and other big players. Whoever cracks the code on information sharing, that will be one of the catalysts that will inform this evolution.”

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ASK THE EXPERT

Understanding and controlling preanalytical variables

The importance of insuring the accuracy of analysis for various proteomics biomarkers.

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he field of proteomics has made tremendous strides over the past decade, driven by advancements in mass spectrometry and bioinformatics. The increased sensitivity and throughput of mass spectrometers, coupled with high-powered soft ware algorithms, has enabled the ability to identify thousands of proteins from very complex mixtures and perform quantitation between different sample types.

A wide variety of body fluids, such as blood, plasma, serum, bone marrow, urine, saliva, sputum, synovial fluid and cerebrospinal fluid, can be used for biomarker discovery activities. Nevertheless, blood has been the biospecimen of choice because it is easily collected and readily availability in sufficient quantities. The use of blood specimens may create several analytical challenges related to proteomic studies, such as the large dynamic range of plasma protein concentration, lipid concentration variability, intrinsic enzymatic activity, and many preanalytical variations in how blood is collected and handled. These challenges limit overall reproducibility, sensitivity and resolution in proteomics biomarker discovery efforts, and are even more critical for translating biomarker discovery into clinical application.

In the past several years, a broad scientific effort has been expended on biomarker discovery research, resulting in an abundance of potential biomarker candidates. Typically, researchers are taking a broad, shotgun approach using mass spectrometry to identify and quantitate potential protein biomarkers from different sample types. This approach has the advantage of quantitatively looking at a large subset of proteins. Once a subset of proteins has been identified as either up or down regulated, the next common approach is to perform either MRM (multiple reaction monitoring), ELISA (enzyme-linked immunosorbent assay), or a hybrid of the two techniques.

Further, these promising new biomarkers require investigation before advancing into the clinical setting for any diagnostic application. They must be subjected to verification and validation phases. One of the major hurdles hindering the transition from laboratory bench to the clinic laboratory is controlling preanalytical variability. It is most important to understand the significant impact of variable time and temperature on blood enzymes, which can degrade specific analytes.

David Craft earned his PhD degree in chemistry from the University of Alberta in Canada, where he studied under the mentorship of Professor Liang Li. He has been working in the field of proteomics for over 12 years, developing mass spectrometry applications towards the detection of biological molecules.

There are many preanalytical variables that impact every clinical study, and it is important to understand and control these variables to insure the accuracy of analysis for various proteomics biomarkers. Common variables during blood sample collection, processing and analysis including the choice of processing plasma or serum, the addition of protease inhibitors or other additives, and the processing and handling conditions for blood specimens.

Only with an understanding of the challenges associated with developing a reproducible proteomics measurement system can one begin to understand the complexity involved in selecting, studying and optimizing a serum or plasma sample. To this end, a detailed preanalytical strategy for sample handling is essential.

Our research has focused on the potential impact sample handling can have on protein and peptide stability and how this variability can be controlled through the use of protease inhibitors. Specifically, we have focused on the stabilization of GLP-1, GIP, glucagon and ghrelin.

These four peptides are of particular interest within the field of metabolic disorder research, especially related to diabetes drug research.

Using time-course mass spectrometry, we have characterized the kinetic digestion of each incretin peptide caused by active plasma endogenous enzymes. We further developed a cocktail of inhibitors to minimize this variability and instability in the blood collection tube.

The BD P800* Blood Collection System has a proprietary cocktail that includes multiple protease inhibitors (i.e., DPP-IV, esterase, etc.) whose performance have been optimized for acting in whole blood while minimizing hemolysis. The plasma obtained from the P800 tube can be used immediately, transported or stored frozen. Stabilization of plasma peptides, such as GLP-1, GIP, glucogan, and ghrelin, enable them to be used in pharmacokinetic and pharmacodynamic studies.

As the field of biomarker research continues to expand, there will be a growing need for a preanalytical system that effectively stabilizes proteins and peptides and ultimately enables the transition of these biomarker candidates from the research environment to the clinical laboratory. „ For research use only – not for use in diagnostic procedures.

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INDUSTRY INSIGHT

Faster, smarter science in a convergent lab environment These adaptable systems support an electronic lab environment that is not merely paperless, but increasingly convergent, more collaborative and information-driven. he latest generation of electronic Such an environment connects scientists lab notebooks (ELNs) is helping with the techniques, instruments and soft ware scientists turn the crank faster they use every day to capture, analyze, and in today’s increasingly paperless share information. It also improves informa– and rapidly converging – election access and analysis, enabling scientists to tronic laboratory environment. ask the questions and get the answers they need As pharmaceutical R&D labs complete to make better decisions. In addition, it helps more experiments supporting diverse prodto link the ‘supply chain’ of materials, samples uct development pipelines, they are producand work requests into the ELN, streamlining ing vast amounts of complex data and huge experimentation across laboratories, departrepositories of supporting information. To ments and external partners. further complicate matters, pharmaceutical Two-way linking between the ELN and R&D encompasses a wide variety of scienlaboratory information management systems tific disciplines ranging from basic research (LIMS) or chromatography data systems (CDS) through applied research to clinical studies. enables scientists to capture the entire context Sometimes scientists can walk down the hall of what they do in the lab – data and process and discuss their fi ndings with colleagues together – all in a single place, which is then over coffee. More often than readily sharable with colleagues. not, however, collaborators are Linking laboratory instruments geographically far-flung, worksuch as balances with the ELN ing in contract research orgaaccelerates experimentation, nizations, partner companies or as scientists are able to send academic labs in different time sample mass or animal weight zones and countries. directly to the ELN. Likewise, These disparate groups all technicians can now retrieve have their favorite techniques, up-to-date calibration informainstruments and soft ware. tion and, if necessary, run daily While many of these systems balance checks without leaving John McCarthy is VP of help to automate and accelerate Product Management their notebooks. with Symyx laboratory throughput, they also Strategy Linking the notebook with Technologies, Inc. He has tend to create silos of structured worked in life sciences familiar soft ware applications research and informatics for and unstructured information 20 years. His areas of interest such as spreadsheets, statistical capturing, managing that impede collaboration and are analysis packages and kinetic and integrating information within the discovery productivity. modeling/data visualization process with a focus on how Today’s next-generation this information can be tools drives further convergence, into knowledge ELNs are essential tools for ef- transformed consistency and efficiency in the by scientists in various ficiently managing the flow of disciplines and roles. lab. In addition, powerful ininformation, tasks and materials formation exploration and data among scientists, soft ware and instruments mining tools are evolving to help scientists within and between labs. ELNs are configufully leverage structured and unstructured rable for use by interdisciplinary project teams information captured by LIMS and ELNs. and ready to plug-and-play with supporting Using these tools, scientists can fi lter, informatics systems and instrumentation. mine and correlate data captured across mul-

By John McCarthy

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tiple experiments by different labs, quickly analyzing chemical structures, chromatograms, spectra and images in spreadsheets.

With a single click, they can send their latest results to powerful data analytics programs and return summary analyses back into the notebook to drive better decisions or new approaches to a problem.

“Such an environment connects scientists with the techniques, instruments and software they use every day to capture, analyze and share information”

Routing tasks, samples, methods and results to colleagues directly from the notebook drives compliance and consistency, eliminates workflow bottlenecks, reduces cycle times and improves project team communication. The same supply chain techniques used to make manufacturing more efficient also speed the efficient hand-off of physical materials and tasks in the lab. Th is means process chemists, analytical chemists, formulators and PK groups can work together more efficiently, even when collaborating in ‘virtual’ teams that span geographical and business boundaries.

Today’s next-generation ELN is much more than just a tool for recording, reporting and reusing experiments in a paperless world.

By efficiently managing the flow of information and tasks among scientists, soft ware and instruments, the ELN is moving research organizations of all sizes to a more convergent, information-driven and efficient electronic lab environment.

For further discussion, see Symyx’s online article on the convergent analytical lab at www.ngpharma.com.

For more information, visit www.symyx.com/notebook6 and www.symyx.com/hosted-informatics, or contact info@symyx.com.

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INDUSTRY INSIGHT

Facilitating continuous improvement How quality by design eases method transfer to more efficient analytical instrumentation in the pharmaceutical laboratory. By Warren Potts

A

mid increasing interest by pharmaceutical manufacturers and regulatory bodies to apply quality by design (QbD) principles to processes and product, organizations are beginning to recognize that QbD can be a catalyst to facilitate continuous improvement, not only of manufacturing processes and product quality, but also productivity.

One area where this multi-faceted opportunity presents itself is in the area of laboratory analyses by liquid chromatography (LC), the gold standard in pharmaceutical analysis. Th is technique has recently undergone vast technological improvements that positively impact many areas, from development to manufacturing.

The International Conference on Harmonization (ICH) recognizes analytical procedures as key to demonstrating a deep scientific understanding of these products and processes. Adopting a QbD approach may create an impetus to transfer higher quality LC methods to reduce compliance risks, and increase regulatory flexibility for greater productivity and fi nancial benefits.

Method transfer can be difficult due to the analysts’ experience levels in the transferring as well as the receiving laboratories, the LC instrumentation that the method is being transferred to, and the depth of knowledge about the method and the variables that can impact performance. The risk of failure on transfer is real and the result, having to re-work and re-validate the method, can be very expensive − especially if it delays a drug getting to market.

How can companies attenuate the difficulties of method transfer? A lack of robustness (ensuring that a method remains reliable under normal conditions of use) is often the cause of transfer failures. By adopting a QbD approach during method development, companies can reduce the risk of method transfer issues later in the development process by building robustness into the development approach. This approach is in alignment with ICH

2Q8 Validation of Analytical Procedures: Methodology, which states “…the evaluation of robustness should be considered during the development phase…”. By evaluating robustness up front, quality is built into the method rather than tested for at the end during validation.

Potential impact There are two key areas of potential impact for the company that adopts a QbD-based approach to method development. The fi rst relates to flexibility: The ICH Q8 guideline on Pharmaceutical Development states “…the demonstration of greater understanding of pharmaceutical and manufacturing sciences can create the basis for flexible regulatory approaches”. The second is the direct impact of reducing method transfer failures. By following a QbD approach, method robustness is considered during development and an in-depth knowledge of the method is gained − allowing the key risk factors to be known and subsequently controlled.

As the industry focuses on shortening time to market and reducing operating costs, technologies that facilitate LC method transfer and QbD must do so seamlessly and efficiently.

Waters has addressed this need by developing the ACQUITY UPLC® H-Class System for method development.

Adopting a QbD workflow and building robustness into methods during development is facilitated by Fusion Method Development™ Soft ware, which automates experimentation according to QbD principles.

These products combine for an integrated and efficient QbD LC method development solution that dramatically reduces the amount of time required to develop a robust method the first time, while also reducing the likelihood of issues upon method transfer. This convergence of technologies allows companies to easily put QbD principles and benefits into practice for greater efficiency, quality, and flexibility.

Warren Potts received his MS at the University of Medicine and Dentistry of New Jersey in 1998. Today, he is the Director of Pharmaceutical Business Operations at Waters Corporation, where he and his team focus on identifying and commercializing new approaches and technologies to help pharmaceutical companies increase the productivity of their business with respect to laboratory practices.

For more information, visit www.waters.com/methods.

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VACCINES

On the edge of

eradication

NGP talks to Rino Rappuoli about the breakthrough vaccine that could consign four deadly types of meningococcal disease to history.

W

hile meningococcal disease appears relatively rare in Western countries, with a frequency of around one person per 100,000 population, the disease does disproportionately affect certain populations, such as infants under nine months of age. The disease is more deadly in developing areas: in the 2009 epidemic season, for example, 14 African countries implementing enhanced surveillance reported a total of 78,416 suspected cases, including 4053 deaths.

Even in those countries where incidence of the disease is lower, it is still devastating, because it preys on the young and healthy and its effects are so swift. A typical case could involve a young healthy teenager playing football in the afternoon, who comes home at 6 p.m. with a bit of a headache. By 10 p.m., the headache gets worse; he goes to the hospital and is put in intensive care. His condition continues to deteriorate, and within 48 hours, he could be dead.

Combine that with the fact that before the antibiotic era, the mortality of meningococcal disease was 80 percent, and the amount of fear inspired by the disease is understandable.

Although treatment has improved enormously in the last 100 years, as Rino Rappuoli, Global Head of Research for Novartis Vaccines and Diagnostics, points out, five to 10 percent of people who get meningococcal disease in Western countries still die.

“And between 20 and 25 percent of those who get the disease will have permanent sequelae,” he continues. “This means they will have to live for their entire lives with the consequences of the disease. It’s not uncommon for people to have arms or legs amputated; there are many cases where that has happened. The more modest cases of permanent sequelae will be hearing loss and learning difficulties. If you put the two things together, the number of people who either die or have permanent sequelae is pretty high.”

Global effects According to the World Health Organization, meningococcal meningitis is a bacterial form of meningitis, a serious infection of the meninges, the system of membranes that surrounds the central nervous system. It can cause severe brain damage and is fatal in 50 percent of cases if untreated.

Several different bacteria can cause meningitis; of these, Neisseria meningitidis has the potential to cause large epidemics. Twelve serogroups of N. meningitidis have been identified, five of which (A, B, C, W135, and X) can cause epidemics. Geographic distribution and epidemic capabilities differ according to the serogroup.

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As Rappuoli explains, from a disease standpoint, there’s no difference between the groups. “From an epidemiological point of view, the reason they’re different is because these bacteria all have a capsule of polysaccharides. That means they are surrounded by a kind of gelatin made by sugar. The chemical composition of this sugar changes, and, therefore, depending on the chemical composition, they are recognized by different antibodies.

“In different geographical areas, you can have several groups. Although, regardless of that geography, whatever picture you have is a snapshot of today.

In the same geographical area, things change over time, so these bacteria have changed in different areas over different times.

“Today, globally, meningococcal B is a major cause of disease in the developed world. But in Africa, the most potent is A, and A is not present in Europe and the US, it is only present in Africa, Asia and Russia. In Europe, it is mostly B, although there are others coming up, including Y and W.” “In the US, it’s more or less equal 30/30/30 for B C, and Y. But, for instance, 15 years ago in the US it was almost exclusively B and C. Y came out over the last 10 years. So you cannot say the US has only Y and B, because it changes.”

“Treatment is always too late, so the only way to win with this disease is to prevent it” Prevention One of the obstacles to successful treatment of meningococcal meningitis is the speed at which it strikes. As Rappuoli says, “By the time you recognize it, it’s too late.” This being the case, the only way to win against the disease is to prevent it, which is why Rappuoli is so excited about Menveo, which was approved earlier this year by the FDA for administration in the US for people aged between 11 and 55, and was granted a marketing authorization by the European Commission for all 27 member states in March for use in people 11 years of age and older. It is the first conjugate vaccine commercially available in Europe that helps protect against four major groups of meningococcal disease: A, C, W135 and Y. The vaccine has also been tested extensively on lower age groups, including infants starting from two months of age. Rappuoli calls the data “beautiful” and says the company plans to submit license applications for all ages down to two months.

The launch of Menveo is even more of an achievement when you consider that researchers have been working on the development of vaccines for meningococcus for more than 20 years. The first conjugate vaccine developed was in the 1990s for meningococcus C, which had a high incidence in the UK at the time.

Rappuoli tells the story: “Between 1999 and 2000, public health in the UK licensed vaccines for meningococcus C from several companies, and together we vaccinated the entire country. From one month of age to 18 years of age, one year, an entire country. And the result was that in one year, the disease practically disappeared. Previously, every year in the UK they used to have 1500 cases per year, resulting in more or less 150 dead and 300 permanent sequelaes. Now that’s largely gone.”

Epidemic in the southern hemisphere Rino Rappuoli was able to use his expertise to advise the New Zealand government, which had been suffering from a decade-long epidemic of serotype B meningitis during the 1990s.

Unlike its counterparts in the UK and the US, the New Zealand epidemic was caused by a single bacterial strain.

Despite the fact that this single strain could be overcome using currently available technology, the country was struggling to come up with a vaccine. In 2000, Rappuoli gave a talk in Sydney about the first result using the genome sequencing technology, which had just been published in Science.

“In my presentation I said we would probably solve the problem of meningococcus B,” Rappuoli says. “Someone came to me and said, ‘I’m from New Zealand and I hope you’re right, because we have a big problem there.’

“And I said, ‘I hope you don’t have to wait for my new approach because you have an epidemic and children are dying every day, and my new vaccine is going to take 10 years. You have an epidemic caused only by one strain: you don’t need this sophisticated approach, you can use conventional technology.’”

“He asked me if I thought the epidemic could be ended right then, and I said yes. I told him the reason they did not have a vaccine was not because it was not technically possible, but because it was a problem that existed only in New Zealand.

“I told him that his government had to convince vaccine manufacturers to develop a vaccine only for New Zealand. We had some conversations and they came to spend a few days with me, and we made a plan. Six months later, the New Zealand government decided to develop the vaccine. By 2004, the vaccine had been developed and phase I and phase II had started. Then we could start vaccinating using the same approach that we had used in the UK. We vaccinated every single person from two months upwards, and by 2005, the epidemic had disappeared.”

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Menveo Menveo was developed using conjugate technology, which was pioneered by Novartis Vaccines in the development of its meningococcal group C conjugate vaccine, Menjugate. A conjugate vaccine is developed by attaching a polysaccharide antigen – the key component of a vaccine that prompts the body to respond to infection – to a carrier protein in order to enhance the body’s immune response to the vaccine.

When utilized in a national immunization program, conjugate vaccines (such as those designed to help protect against Hib, pneumococcal and meningococcal group C disease) have reduced the number of people (both vaccinated and unvaccinated) who carry the bacteria that cause the disease. Novartis is currently studying the longterm safety and immunogenicity of Menveo, and is considering clinical studies on carriage.

Menveo has been administered to more than 18,500 people and is currently in multiple phase III clinical studies in infants and toddlers worldwide. The FDA recently approved Menveo for use in 11-55 year olds, and the European Commission approved Menveo for use in adolescents and adults from 11 years of age.

“In 10 years we prevented 15,000 cases and 1500 deaths. That’s why I’m so confident that Menveo will work, because one component has already done its job. Because of these very good results with meningococcus C, we decided to use the same technology to do Menveo, which works against four of the five types.”

After the success of the meningococcus C vaccine, Rappuoli was determined to find a vaccine that would cover the five main serogroups: A, B, C, W135 and Y. Menveo represents the culmination of 10 years of successful work on a conjugate vaccine for A, C, W135 and Y, using the same technology that was used to develop the C-only vaccine in the 1990s. But as Rappuoli explains, this technology could not be used for B. “The reason is pretty simple: B also has a gelatin that surrounds the bacteria, like the others. But unfortunately the chemical composition of this sugar is identical to a sugar that we have in our bodies.

“Our immune system does not recognize this is a foreign piece of bacteria, but as our internal material, so it’s not able to provoke a response. Because of this, the Menveo technology could not be applied to B. And since this very successful technology could not be applied, many people tried in the 1990s to solve the problem of B, and it was one failure after another.”

“I also tried in the mid-1990s, and I reached the conclusion that with the technologies we had at that time, making a vaccine for B was impossible. So I shut down the project in my lab because I felt it was useless to work on something where there was no hope because the technology was not there.”

Rappuoli did not forget the idea, however, and was always looking for new technologies that might help solve the problem. In 1995, when Craig

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Venter of Celera Genomics published the sequence of the first bacterial genome, its potential for the development of a meningococcus B vaccine came to Rappuoli’s mind immediately.

“That was a new power for technology, with information that nobody had seen before,” he recalls. “I jumped on the idea that maybe this could help us to solve the problem. I went to talk to Craig Venter, and asked him whether he would sequence the genome of meningococcus B, so we could use that information on the genome to try to come up with new solutions.

“He agreed to sequence the genome, and in the first few months of collaboration I immediately felt that we had a new revolutionary technology and we were going to find a solution. Just to give you an idea of the situation we found ourselves in when we started, with the old technology, the people who had been working on meningococcus for a century had found maybe 10, certainly no more than 15 possible antigens for a vaccine. Now we could predict at least 600. It was very exciting because it was like we had discovered a new world that we never new existed.

“And among the 600, eventually, we found antigens that could solve the meningococcus B problem. After a lot of work, we are at the end of phase III in infants in the European trial. Ten years later, we are positioned where we believe we have a vaccine.” Novartis plans to submit a file for its meningococcus B vaccine with EU regulatory authorities by the end of 2010.

Adjuvant needed In addition to his work on meningococcus, Rappuoli has also been carrying out extensive research in the influenza space. He explains that while the existing influenza vaccine is very good if given to healthy adults, in the elderly and those with weaker immune systems, it works less well.

Rappuoli and his team began working on a new vaccine that would respond better in those whose immune systems were less robust.

“We did a number of trials and finally in 1997, we licensed our first adjuvant, and then in 2000, it was licensed all across Europe and then in 50 different countries worldwide,” Rappuoli says. “To give you an idea of the importance of this, in the previous century from 1900 to 2000, only one other adjuvant was licensed, in 1924. So our licensing a new adjuvant for human use was something that happened once in a century. We licensed it to improve the efficacy of the vaccine, which we did, and it worked.

“Then in 1997, when the first H5N1 avian influenza strain came along, we were the first ones who were able to make a vaccine out of that strain. It was difficult to make, but we made it and tested it in people, in phase I. And we decided to test it with or without an adjuvant.

“To our great surprise, we found that the H5N1 vaccine without the adjuvant did not work at all in humans. At that time, H5N1 had disappeared, and no one noticed. But then in 2004-2005, when H5N1 came back and started to travel worldwide, the vaccine was needed immediately. They made the conventional vaccine, and found it didn’t work.

“Eventually, everybody agreed that for H5N1 you need an adjuvant.

There’s no way you can get a good vaccine without it. Now everybody has developed emulsions that are very similar to ours.” n Rino Rappuoli is Global Head of Research for Novartis Vaccines and Diagnostics.

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EXECUTIVE INTERVIEW

Hosted LIMS for the pharmaceutical environment Kim Shah tells NGP about the benefits that LIMS-on-Demand can offer to the pharmaceutical industry.

Why is LIMS-on-Demand beneficial to the pharmaceutical industry and which companies benefit most from a web-based LIMS hosted by Thermo Fisher?

Kim Shah. Thermo Scientific LIMS-on-Demand (www.limsondemand.com) is an affordable lab management solution allowing small to medium sized labs, for the first time, to have the benefits of a full-featured LIMS without the expense and time of installing and maintaining an enterprise client server application. LIMS-on-Demand provides the reliability and security benefits of a full featured enterprise LIMS over the internet.

Traditional LIMS often require a capital investment of anywhere from $50,000 to well over $100,000, making this important laboratory functionality simply not available to smaller labs. With LIMS-on-Demand, the costs associated with having this functionality is now within reach since companies only pay for a monthly subscription fee for each user.

As an operating expense instead of a capital expenditure, this subscription-based monthly fee now brings a fully featured LIMS within reach for those labs that have up to now been forced to design their own systems or rely on paper based methods. With LIMSon-Demand, scientists can access, manage and support the lab from anywhere, any time, and from any web browser.

I expect that small to medium-sized laboratories doing routine testing, with three to five scientists and typically no IT resources, will benefit most from this solution. Laboratories involved in research and development, nutraceuticals, cosmetic manufacturing, environmental monitoring, pathology, water safety and bio-banking will be taking a good look at LIMS-on-Demand.

For those larger companies that have

highly customized workflows or must conform to GLP guidelines, a hosted solution is available which essentially offers the same on-demand LIMS, but also completely takes care of the back-end client server management. Many large companies are realizing that this is a time and cost item that can be successful outsourced, along with many other parts of the drug development process.

Are there any limitations with an on-demand LIMS solution compared with a traditional installed LIMS? KS. Thermo Scientific LIMS-on-Demand is as robust as an enterpriseclass LIMS. Working with a SAS 70 certified hosting partner, we ensure that our clients have reliable access to their application and that data will be secure. Customers can create workflows, map simple lifecycles and generate automatic updates while having rapid access to up-to-the-minute data and information that impacts every phase of the laboratory process. Companies needing to conform with specific GLP validation requirements should consider Thermo Scientific’s purpose-built LIMS with GLP and validation already built in.

How is LIMS-on-Demand suited to meeting the changing needs of pharmaceutical organizations?

KS. More and more pharmaceutical companies are consolidating resources and processes. Outsourcing is now a common occurrence which has brought cost savings and efficiencies to the life cycle process.

LIMS-on-Demand has been developed in

tandem with this trend to offer a true enterprise-level LIMS for those providers now being tasked with the work previously done by only the largest labs with onsite IT departments, large capital budgets and teams of many scientists.

Our solutions have been built on the latest technologies and we partner with companies like Microsoft and Oracle to ensure that we bring our customers the most innovative and easy-to-use solutions on the market. Our breadth and depth of expertise and solutions for the life sciences and pharmaceutical industry demonstrates our commitment to serving the needs of our customers and we have been recognized by Microsoft Corporation for the past two years by receiving their Life Science Innovation Awards for providing next generation solutions that enable our customers to advance science.

No other LIMS vendor has the breadth and depth of offerings we can provide any lab – from reagents, to consumables to high end instrumentation and soft ware solutions – we have the expertise and solutions for the entire lab operation. Now with LIMS-on-Demand, scientists in small to medium-sized labs can access, manage and support the lab from anywhere, any time, from any web browser, and at a price that is affordable. ■ Kim Shah has more than 20 years’ experience in high tech marketing and management. Prior to joining Thermo Fisher Scientific in November 2006, he served as Vice President of Marketing and Channel Development at Convoq. Shah has held leadership roles at Inso Corporation, Lotus Development and Micrografx. He also co-founded e-tractions, Inc., a provider of strategy and implementations of online marketing campaigns.

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EXECUTIVE INTERVIEW

Stereology going mainstream Lars Pedersen discusses how whole slide stereology is beginning to make an impact on the biopharmaceutical industry.

What was the main reason for pharmaceutical companies not to employ stereology based methods in their pre-clinical research?

Lars Pedersen. From a position as an esoteric discipline in the hinterlands of purely academic research, stereology has become a recognized best-practice approach to obtain critical histomorphometric information about tissues. Applications range from efficacy pharmacology to toxicological pathology, and in some cases, even clinical studies. Increasingly, scientific societies, biopharmaceutical companies and even the regulatory authorities are adopting stereological principles whenever data are used as a basis for critical business or scientific decisions.

Decision-makers in the biopharmaceutical industry, and with regulatory authorities, are increasingly aware of the limitations of manual scoring, ranking, grading and 2-D image analysis approaches. But the load of manual labor, as well as the complexity of the stereological approach, has made the proposition of stereology unrealistic in an environment with relentless demands for data and throughput.

Robust, high-quality whole slide imaging devices and novel technology for automating stereology are rapidly changing both adoption and regulatory awareness.

What other factors inuence the penetration of whole slide stereology into the pharmaceutical pre-clinical research market?

LP. Whole slide stereology is a powerful research tool, allowing a researcher to ask critical questions, such as fx number of dopaminergic neurons in substantia nigra, number of proliferating hepatocytes, number of alveoli in a lung, etc. – and get a statistically unbiased answer, with a known precision. Additionally, whole slide stereology is substantially reducing or eliminating bottlenecks associated with manual labor.

Slides from whole slide imaging systems, like the Olympus VS110 (for research and educational purposes only), can be used with the patent protected soft ware tools from Visiopharm, and demonstrate improvements in efficiency between 20 and 40 times, compared to the traditional methods.

Whole slide stereology is efficiently addressing other critical issues as well. The stereological sampling approach at every level provides better precision in estimates of tissue properties at study unit level, which is typically translated into the ability to detect smaller group differences with the same number of study units.

By virtue of being whole slide based, all endpoints are fully traceable from study unit, down to the individual structures that formed the basis for quantification; and based on thin sections, a whole range of time-consuming and expensive issues with tissue preparation (shrinkage, penetration of staining reagents, etc.) can be eliminated.

How does your partnership with Olympus America Inc. bring increased value to your customers?

LP. The results delivered by image analysis soft ware rely on highquality images. Olympus is a recognized leader in optical technologies and has had many years of experience bringing microscopic imaging and image analysis to the pharmaceutical industry. This expertise has allowed Olympus to develop high-resolution whole slide imaging systems like its VS110 scanner.

Working together to bring our knowledge of advanced image analysis and histo-informatics with the Olympus whole slide scanning technology, we can offer our customers imaging solutions today, like automated whole slide

stereology, that were not previously possible, giving them tools that deliver better quality results, easier and faster. For pharmaceutical drug discovery and development, this can mean significant reductions in time to market, which potentially can lead to decreased costs and increased revenue.

What do you see the future holding for whole slide stereology?

LP. An increasing number of scientific societies are adopting guidelines requiring the use of stereology whenever reporting findings are based on quantitative morphometry. Examples are neuroscience and nephrology, where leading scientific journals impose such requirements for publications. Recently, the field of respiratory research agreed on an official statement on quantitative assessment of lung structure using stereology published as a joint statement from the American Thoracic Society and the European Respiratory Society.

Also, regulatory authorities are familiarizing themselves with and educating themselves on methods and technological advances in the field. Although this is not likely to result in immediate changes in regulatory guidelines, there is little doubt that companies engaged in pharmaceutical R&D will be faced with new types of questions and expectations from regulatory reviewers. These types of questions can be efficiently addressed with whole slide stereology. â– Lars Pedersen, PhD, Director of Professional Services, joined Visiopharm in 2002 after completing his doctoral training in Informatics and Mathematical Modeling at the Technical University of Denmark. His strong academic background in digital image analysis and statistical pattern recognition, combined with several years of experience in stereology, allows Pedersen to master and teach the complete range of Visiopharm software products.

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Singled out

NGP caught up with Johnson & Johnson’s Paul Stoffels at the recent Pharma Summit in London, UK. Below he gives us his insight into the need for greater differentiation between new clinical entities, the move towards more open innovation, and his personal experience ďŹ ghting HIV in Africa.

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O

ne of the most striking things that comes through when you meet Dr. Paul Stoffels is passion – for his work, for the future of healthcare, even for the wellbeing of his close friends. In his speech to a packed conference room at the recent Pharma Summit in London, he held the audience rapt with his description of the effects of advances in HIV treatment on his friend Jens.

His focus on the need for new strategies to cope with the pharmaceutical marketplace of the future is also worthy of note. When asked to expand on this point, he specifies two strategies that J&J is committed to: working on real medical needs, and differentiation. “It’s a combination of transformational research and making the fields we are in better. For example, we have a lot of knowhow today on HIV, but I know that we can make a better drug still. So there we have an evolution.

“On the other hand, we did a discovery on a completely new target for TB, and that was the start of a new area that we now are looking at, to determine if we can use that target for antibiotic research. It’s an ATP synthase and we should be able to also fi nd an ATP-synthase inhibitor, so it’s transformational, it’s not incremental. It’s like using similar targets to fi nd better drugs.

“We went from HIV to hepatitis C, because we knew that we had mastered that chemistry very well. A lot of our strategy is building on what you know, taking significant risks in new areas, but always on medical needs.”

“If you’re in this industry it is such a challenge to work and to commit yourself for so long to a project that you have to do it because you love it, to make a difference in the world”

On access to treatment

Lagging behind As pipelines dry up and the so-called innovation deficit increases, the need for greater collaboration with both traditional and new partners has become ever more obvious – yet the pharmaceutical industry seems to lag behind other sectors in this regard. Stoffels points out that while the industry has always collaborated well with academia, big pharma companies have traditionally shied away from collaborating with each other.

“That is where we are far behind, on figuring out how we can do better collaboration amongst ourselves and not inventing the same thing twice,” he underlines. It’s not in our genes in the pharma industry. We have grown up as very individual companies, and with big houses you think you know everything yourself.”

Stoffels’ early experiences on HIV in Africa, which have proved fairly seminal in terms of his later work, began by chance. As a student training in Africa, he found his ability to perform surgery restricted by the rise of HIV. He became fascinated by this new disease, and began looking into it as a research area.

Could you give an example of healthcare technology that might be deliverable at a cheaper price point in developing countries?

PS. If you look at HIV drugs in the West, for general therapy, you easily reach $8000-$10,000 per year, while a lot of patients in Africa get access at around $100-$200 a year. But, in that field, there is a general acceptance that, because of the healthcare problem, we are not going to look at the prices as for other drugs, where governments from the West would come back and say, “You give this for $100 in Africa, and therefore we also want it in France for $100.” There’s the respect for the fact that industry put it into that use at a low price. The European Commission has special rules around that where you cannot re-import drugs which are delivered at a lower cost for HIV in Africa. It’s a crime.

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During that time, he met the influential Dr. Paul Janssen, one of the most productive pharmaceutical researchers of the 20th century – he and his team were responsible for the discovery of over 80 drugs, including 25 antipsychotic medicines.

“I met Dr. Janssen,” Stoffels says, “and he wanted to make it a vision in life, a passion in life to make a difference there, and that’s how things evolved. I had never planned to be in the pharmaceutical industry.”

True dedication Th is lack of a planned career trajectory applies to many of those who start off in medicine and end up in pharma. They don’t go into it for the money; they follow their passion, and a true desire to do something worthwhile for humanity. Where then, does the often negative public perception of the industry come from Stoffels puts it down to a combination of factors.

“We have had an exaggerated commercial model for a long time, and that with the profits that are published and some of the challenges we’ve had, like Merck and Vioxx – things like that are spread widely in the press, and put us in a very negative light. I regret that, because if you come into our organization with our scientists, with the physicians we have, they are all committed to making a difference. If you’re in this industry it is such a challenge to work and to commit yourself for so long to a project that you have to do it because you love it, to make a difference in the world.

“Why does the industry have such a bad name? Often, you have a bad name for a football team, because you have a few bad players, and you don’t control them all. At J&J, we have a very good name. We are a company that is very highly respected; we have a very high ethical standard everywhere. I’m very, very proud of what we do, whatever people think. I brought several new drugs to patients which, today, are keeping thousands of people alive, which is not a small thing.

“Of course, we have to make an income because we have to pay for it. We use money from the capital market, so we have to give a return on the investment. But the economics of our business are very challenging. If you look at most of the big pharmaceutical companies, their stock value is not growing much. And we pay a dividend of two percent a year.

“If you put your money in the bank, it’s safer today than putting it out in industry.

That’s where people say, ‘Th ink of the shareholders.’ The shareholders are all of us; our pension funds are the investors in J&J, and they want a return on investment. They push us to be profitable in that model. We invest a lot in R&D, and we get a very decent return on that, but that decent return is two percent or three percent a year for the shareholder, which is not huge. I think there are a lot of wrong perceptions about what is happening in this industry.”

On global pricing What challenges has today’s instant access to information posed for the worldwide availability of drugs?

PS. The global pricing of products has held back a lot of availability, and there is no simple solution to that. If a drug is priced more cheaply in Asia than it is in the US or Europe, it’s known worldwide very quickly through the internet, and people will start fighting to get the low price. And the whole model crashes. I don’t have a solution, but there should be much more thought put into how innovations can become available to patients worldwide, while still being able to pay back the huge development cost.

Paul Stoffels is Global Head of Research and Development for Johnson & Johnson Pharmaceuticals Group.

First person Paul Stoffels’ views on the state of the industry.

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worked for several years in Africa as a physician researcher in the area of HIV, where I met Dr. Paul Janssen, who was one of the greatest innovators in our industry, and learned that a long-term vision is the most critical in getting to innovation.

It’s not about the next crisis in the economic or financial environment. It’s all about your long-term view, because innovations in our field do not come about in the next two years, they happen over the next 20 years. If you want to make a difference in healthcare with innovation, it’s long-term.

I’m convinced, as a physician, that running a large pharmaceutical R&D organization is not that different than being a doctor in a clinic. I consider myself as a partner in healthcare. It’s all about the patient; if we do good work the economics will follow. The focus is relentless on how to make patients better. You can’t get through times like these and the ones to come if you don’t have a vision on how to make healthcare better.

The other thing I’ve learned relates to technology.

When I was in Africa 20 years ago, in the 1980s, in the whole of Kinshasa there were probably 20 phone lines.

Today every second person has a telephone. How is that possible? It’s possible because significant advances in technology have made it so simple that it can be applied to everybody. I’m a believer that we should continue in healthcare research to be so advanced that, ultimately, we get to solutions that are simple and applicable to everybody.

Being on the leading edge of technology, combined with a passion for patients and making sure we see our-

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On cost How can we make it cheaper to make drugs?

PS. That’s a technology story. If you can inject an antibody once every second day, or once every three months, if you make it more potent, with better PK and better tolerability, and it works over a long time period, it becomes much cheaper. I’m a believer that very good technology and very good delivery will give us much cheaper healthcare.

selves as a partner in healthcare, and not just as a business: those are the fundamentals to being successful in this industry in the future.

As an industry, we have made a significant contribution to healthcare over the last 100 years. If you look at the gain in life expectancy, a very significant part comes from the industry offering better tools for physicians to cure and to care for patients. If you look at penicillin and what happened with small pox, and even with HIV over the last 20 years, where it went from being a disease with a two-year life expectancy to today having a 20- to 30-year life expectancy. There’s only one group of organizations responsible for it: it’s the pharmaceutical industry that discovered the new drugs that made the virus disappear from the body, and allowed patients to survive.

Now that all the simple diseases have been solved, the challenge of the diseases we have to solve today is dramatic. If you look at where the vision for tomorrow is, we should be able to delay the onset of Alzheimer’s disease by three to five years, and eventually prevent it.

Hepatitis C should be cured – we are not that far from it. Schizophrenia should be totally controlled, with no relapses. Prostate and breast cancer should be cured. Th is is the vision for the next 20-30 years.

In the 1970s and 1980s, a number of reasonably good targets were discovered, and the majority of major pharmaceutical products came out these few targets with fi rst, second and third in class.

Most of that is exhausted now, so we need transformational science in order to get to the new therapies for the future. There are tremendous medical needs to be solved. Me-too’s are over; high medical need and differentiation are key. Products also need to be more effective and safe today, with the requirements from the regulatory agencies and from society. Everyone wants to have a perfect drug that is safe and effective, with no risk for society or the patient.

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On innovation Is there any argument for greater government involvement in funding drug development?

PS. I think the better way to think about it is that we need more respect and understanding on the environment we need in which to innovate. We are partners in healthcare. If we, as an industry, disappeared, innovation in healthcare would struggle.

Today the ultimate driver for all innovation happening in healthcare is the product in the market. Whether you are in academia, biotech or pharma, academia does research, it goes into biotech, it goes into pharma, and gets into the market, and that’s where the value is created. The decreasing value of what is paid for drugs has an impact on the entire innovation chain. One of the biggest fears I have is that, if this continues, innovation will suffer very significantly.

The cost of that is huge, so it’s a big challenge to develop the perfect drug, to solve high medical need with differentiation. That’s why only a few drugs are approved Developing a every year. new drug might I believe very strongly that the solution for the future take 10 years is going to be an integrated solution. Developing a new drug might take 10 years of diagnostics, and you might get approved in three years. How do you bring that together as transformation over the years? It will be through be partnerships, collaborations and significant new ways of The return on working in the pharmaceutical industry.

R&D is only Let me get very personal. Jens, a good friend of mine, 2-3% for the got HIV in 1986 when we worked together in Africa. He shareholder had a life expectancy of two years. He had been on all the drugs you can imagine, and five years ago he was terminally ill, with a three-month life expectancy. We were able, with the new technologies, to figure out what drugs he was sensitive to and what drugs he was resistant to, People with what we should do on his PK, and how we should bring HIV now have several drugs together in a new way. a 20-30 year What we did over the last few years, as a company, life expectancy is measure the viruses of 350,000 patients across the world. We genotyped on the left and in the vertical axis; there were 400 patients on this slide. Only on the horizontal axis did we see the mutations of all these patients in their protease gene; massive diverse mutations.

It took us five to 10 years to get a really good feel on it, but we were able to figure out which patients should get what drug. We went to phenotyping; from genotyping we took out certain pieces and learned. Then we went to the clinic, took 25,000 patient records and combined the phenotyping with the genotyping in the patient records. And we could perfectly predict which patient was going to respond to which drugs.

As a proof of concept, taking information, genotype and phenotype, pulling that all together and figuring out which patient responds. Jens has now been alive five years, his

disease is undetectable and his life expectancy is at least 10 years – it’s probably 20 years today. He’s never felt so good; he’s back at work. And all because we were able to depict what his future was going to be based on information.

Today there are about 100,000 patients on this therapy. That’s a football stadium full of people who have survived because we are able to bring new drugs in a better way to patients, now. Th is took us 20 years from the first step in HIV to where we are today. What is the next step?

We could go from one pill once a day to one injection once a month. And we’ll eventually, hopefully, keep HIV under control with 12 injections a year.

What we need to do now in our business is identify the medical need we want to solve and figure out what science we need for that. For certain diseases, it’s genetic material. For others, like neurology, it’s imaging. Bring that together, medical need matching with the best science, and you get differentiated medicines.

The real challenge in our business is creating the vision for the future. If you do market research today it doesn’t tell you anything on where you have to target your product in 10-15 years. The challenge is that, over time, market expectations go up, because certain drugs become generic, competition comes in, safety and regulatory requirements go up. You need to continuously think about what should be the level of innovation you need to tackle when you start your research.

When you have a great idea, over time you always lose some of the features. If you don’t start high enough, over a 10-year timeframe you hit a wall. A lot of that is happening at this moment in this industry, where market expectations have gone up significantly, and productassociated research was initiated 10 years ago so that now we can’t change it, and you hit the wall. The market expectations are already higher than the drug you’ve got.

Add to that the lack of capital for biotechs today and the lack of funding for academic research, and getting to transformation and innovation will be very, very challenging.

I’m a big believer that much more cooperation should happen in large pharma. Other industries have been doing that for a long time already, where they get together in a pre-competitive consortium to figure out significant problems. Validation of biomarkers to accelerate the R&D in new products for Alzheimer’s, for cancer; typically, those things should be in collaborations together, and that’s happening at this moment, but it’s going far too slowly. We should have collaborations where we bring our forces together to accelerate the platforms we work on.

Today, more than half of our products come from external collaborations and innovations, and it’s a matter of creating a swell of research, development and scientific

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capabilities, whether it’s diagnostics, safety or clinical operations. It’s all about partnership, and learning to work together in a different world.

“You can’t get Sharing the value with other players is also a new through times world for a lot of pharmaceutical companies, and it’s like these and a real challenge if you have to develop an imaging, a the ones to come diagnostic and a drug in one indication, together with three partners, where the drug is reimbursed in a differif you don’t ent way and by a different authority than the diagnostic, have a vision the information and the imaging. How do you get to one on how to make integrated solution? healthcare We’re working hard in our company on Alzheimer’s.

It will be three different approaches: a combination of better” small molecules, large molecules and antibodies, and hopefully, eventually, into vaccines. We are hopeful that we will be able to diagnose Alzheimer’s early and provide a vaccine that will delay onset for several years. Th is will go together with significant information and imaging to follow up patients and to see what risk factors they have.

In the future, I doubt that a lot of individual drugs will still get to the market without some kind of diagnostic. We need to learn to work in industry to make sure that a value point for the US and Europe is totally different for any other area, but the needs of the patients are the same. It’s the same as with the cellphone; how it is possible that we all pay a few hundred pounds for a cellphone with nice tricks, whereas in somewhere like Tanzania, the majority of people also have a cellphone? It’s the same technology at a different price point.

We need to continue to be agile and drive an entrepreneurial spirit in the innovation world. And then there’s globalization: the cost of development and the cost of what we do in R&D is so huge that you cannot afford to bring in a new drug if you can’t bring it in globally.

For me, the mission, the vision, the passion is: Stay with focus on the patient. Economies go up and down. I have seen the biotech crisis. I have seen a lot of fi nancial crises. One thing always stays on track: the medical need in patients doesn’t go away. If we solve a significant need, the business will follow.

Excerpted from a speech given at the Economist’s Pharma Summit, February 24, 2010, Renaissance Chancery Court, London, UK.

On value to society How do you put a value on the benefit of a drug to society?

PS. It’s a difficult balance, because very few people appreciate what the risks and the challenges are in developing a drug. People should try to understand how our world is organized. In the end, we are owned as a public company by society, which puts pressure on a company like us to be profitable. We use a lot of capital to develop new drugs. We have to have good return on investment, plus we have to have a good benefit to society. People need to understand the mechanism and appreciate it, because otherwise it will disappear.

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PROJECT FOCUS

The right PET How the correct imaging modality can streamline your clinical trials.

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ffi liated with the American College of Radiology (ACR), ACR Image Metrix is an imaging contract research organization (CRO) that improves the efficiency of drug and medical device development programs through the inclusion of appropriate imaging modalities.

Working with Avid Radiopharmaceuticals, a clinical-stage, product-oriented company, ACR Image Metrix is concentrated on protocol requirements, including site qualification, procedures for image acquisition and reconstruction, quality assurance, quality control and centralized interpretation. Critical to streamlining Avid’s clinical trials was the integration of the most appropriate functional imaging modality available − positron emission tomography (PET) − to evaluate target molecular compounds. Th is article will discuss how ACR Image Metrix implemented PET imaging into a late-stage clinical trial involving one of Avid’s molecular compounds.

PET is an excellent imaging modality to showcase the benefits of molecular biomarkers. The presence of amyloid plaques in the brain is one of the pathologic hallmarks of Alzheimer’s diseases (AD). Because PET scanning effectively highlights amyloid plaques, ACR Image Metrix integrated PET imaging into a late-stage clinical trial utilizing one of Avid’s target agents to detect indicators of AD. Implementation began with ensuring study design regarded PET imaging results as a reliable endpoint. ACR Image Metrix’s expertise was applied in other preliminary aspects of the trial, including site qualification and training. In addition to the subspecialty imaging expertise offered in its imaging core laboratories, ACR Image Metrix provided comprehensive data management, from image acquisition to archival to analysis.

Many of the typical challenges encountered in the implementation of PET imaging in a late-phase clinical trial were averted. Historically, it has been difficult to

integrate PET imaging in multicenter trials due to inconsistent site preparation and a lack of standardized operating procedures. Yet in this case, all participating sites were well prepared and qualified due to standardized site training and uniformity in operational protocol. ACR Image Metrix requires standardized imaging protocols across study sites to ensure consistent acquisition techniques, accurate quantitation, reliable interpretation and uniform reporting.

Th is standardized approach promotes the normalization of quantitative data across vendors and platforms in a multicenter trial.

Avid Radiopharmaceuticals has benefited tremendously from its relationship with ACR Image Metrix.

Providing comprehensive imaging services and data management, ACR Image Metrix seamlessly incorporated PET imaging into a late-stage clinical trial involving one of Avid’s molecular compounds. Th is allowed researchers to assess the efficacy of Avid’s proprietary target agent in the detection of amyloid plaques in AD. PET imaging produced functional imaging data that could either stand alone as an exploratory endpoint or be integrated with anatomic imaging results. Thus, PET technology in this late-stage clinical trial provided valuable information to guide decision-making about the molecular agent’s future.

As imaging technology advances, ACR Image Metrix will strive to remain at the forefront with stateof-the-art molecular imaging modalities capable of monitoring the action of therapeutic candidates in the human body. An industry leader in trial design, imaging techniques and data analysis, ACR Image Metrix has proven experience using cutting-edge technology to provide comprehensive imaging services that streamline clinical trials. The successful implementation of PET imaging in this late-stage clinical trial for Avid Radiopharmaceuticals is yet another success story for ACR Image Metrix.

Mehdi Adineh is the Scientific Director of the core laboratory of the American College of Radiology (ACR). He has more than 15 years of experience in the applications of multi-modality image acquisition and processing for various stages of clinical trials. He is a PhD level imaging physicist who has contributed significantly in developing novel imaging techniques for biomarker investigations, as well as verification of imaging instrument performance and standardization of image acquisition protocols across sites.

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BIOMARKERS

Everything you ever wanted to know about the use of biomarkers in imaging and pharmaceutical research.

IMAGING

BIOMARKERS: A PRIMER

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iomarker. The word is often used in the way we would have once said ‘magic’ or ‘miracle’ – as though biomarkers are supernatural keys that will allow us to solve our most difficult medical problems.

At their simplest level, biomarkers are not new, nor are they mysterious. A biomarker is any detectable biologic feature that provides information about its source; for example, body temperature to indicate a fever.

However, biomarkers have come into increasing prominence in pharmaceutical R&D in the last few years, thanks in part to the spiralling cost of drug development. They can be used to obtain early indications of drug effectiveness and safety, assisting both research and regulatory approval purposes, reducing both cost and time for development.

There is increasing evidence that biomarkers pinpointed through various types of medical imaging, such as magnetic resonance imaging, computed tomography and positron emission tomography, can help answer some important raised during the drug development process.

On these pages, we present key facts about the use of imaging biomarkers in pharmaceutical R&D.

What are biomarkers? A characteristic, or marker, that can be measured objectively (rather than subjectively) as an indicator of a body’s normal biological processes or pharmacological responses to therapeutic interventions; that is – a flicker, a response that is easy and quick to identify and which proffers some insight into potential clinical problems.

What is an example of an imaging biomarker? The most obvious example is the imaging of a tumor in a brain CT scan. The first and most simple biomarkers to be imaged were X-rays – the image provides a picture of what the problem is. This is a simple example of what imaging biomarkers are, but the extent of their value to medicine has not yet been fully explored.

20% of American Society of Clinical Oncology phase I abstracts from 1991-2002 included biomarkers (503 out of a total 2,458)

How are biomarkers discovered? The identification of biomarkers was previously an observational side product of clinical practice, but is increasingly becoming an industrialized process.

Biomarkers can be detected and measured by a variety of methods including physical examination, laboratory assays and medical imaging.

How are they used? Imaging biomarkers are most commonly used in clinical trials as ‘surrogate endpoints’; they are increasingly recognized as valid resolutions to trial problems.

Rather than researchers waiting for traditional clinical endpoints of morbidity or mortality as indicators as to the efficacy of their clinical interventions, imaging biomarkers occur far sooner, and are often more accurate.

Surrogate endpoints are findings or measurements that may be used in clinical trials to evaluate the safety or effectiveness of a medical therapy for treating disease. They serve as an alternative to traditional trial endpoints (such as morbidity and mortality) and often may be gathered in a shorter timeframe or evaluated with higher confidence. Biomarkers in imaging may serve as such nontraditional endpoints, though many

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if not most surrogate endpoints do not involve the imaging of biomarkers, and the concepts are not synonymous.

changes that might be missed with traditional approaches.

Timeframe: Imaging findings are often apparent long before long-leadtime parameters such as mortality can be accurately assessed, allowing a compressed evaluation time frame.

Biomarkers supported dose selection for phase II studies in 11 of 87 of the trials (13%). However, the primary determinants of phase II dose and schedule were toxicity and/or efficacy in all but one of these 87 trials (1%).

Why are they useful?

Speed: In the preclinical setting, imaging biomarkers allow researchers to potentially identify promising new therapies more quickly, and demonstrate that other products hold no such promise.

Choice: A large number of candidate therapies are often available for any given condition, meaning developers must choose among many competing compounds or devices. Imaging biomarkers can provide valuable early informationis particularly valuable to assist in this process.

Validation: Imaging provides (perhaps uniquely) the ability to validate in humans the results identified in successful animal model experiments, allowing early feedback about questions ranging from presumed biologic mechanism of action to dose effectiveness.

Accuracy: Advancement against disease in modern medicine tends to be incremental. Imaging has the potential to reveal smaller and more subtle

Objectivity: Findings acquired with morbidity evaluations as currently conducted may be more subjective than those achieved through imaging modalities. For example, the functional MR imaging evaluation of pain holds the promise of a more objective determination than the patient-determination method presently used.

Ethics: Imaging biomarkers also have the potential to address many of the technical and ethical issues that surround prospective, randomized, double-blind, placebo-controlled studies.

Their creative use may allow patients to be their own controls in certain settings, reducing the number of patients required to achieve statistical significance and therefore saving both time and resources.

results. A few such failures could reduce confidence in the concept of biomarkers within the research community.

For example, a chemotherapy trial designed around an imaging biomarker, such as CT measurement of tumor volume, could accurately demonstrate a meaningful therapeutic effect while completely missing serious cardiotoxicity. The fact that so many new drugs fail clinical development due to safety issues means that imaging biomarkers that can provide insight into toxicity would be valuable in their own right.

Ultimately, scientists and regulators are most likely to accept surrogate endpoints that have been well studied and characterized in large groups of patients, because such large studies are likely to minimize the possibility of unexpected and inaccurate results that might reflect limited experience with a given surrogate endpoint.

26%

Biomarker studies provided evidence supporting the proposed mechanism of action in 34 of 87 of the published trials (39%).

14%

1992

2002

The proportion of phase I abstracts including biomarkers increased over time.

A warning: Imaging biomarkers hold out tremendous promise, but should not be considered a solution to all preclinical or clinical questions. If biomarkers are applied hastily or in a way that is not full considered, they could provide incomplete or inaccurate

“Imaging biomarkers are most commonly used in clinical trials as ‘surrogate endpoints’; they are increasingly recognized as valid resolutions to trial problems”

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INDUSTRY INSIGHT

BIOMARKER

With Aiden Flynn, Director of Statistical Support for Clinical Biomarker Studies, GlaxoSmithKline.

What challenges are pharmaceutical companies likely to encounter when using biomarkers in drug development?

There are a number of issues with biomarkers in drug development. In some cases, biomarkers may have been collected as part of a study that was designed for another purpose. So the analysis relating to the biomarker is exploratory or hypothesis generating. In this case, the study can involve the evaluation of a large number of biomarkers and it can be problematic to efficiently identify biomarkers that are clinically meaningful. Whilst these exploratory analyses are a much needed part of finding new biomarkers, they can be costly, resource intensive, time consuming and yet have a low probability of success.

How can these challenges be overcome?

One of the key areas that can help overcome some of these challenges is a clear biomarker strategy to be used in the early planning and integration of biomarkers in the clinical development plan. Where possible, biomarkers should not be an add-on to a study. Rather, study designs should be scrutinized to ensure they provide a reasonable chance of success for biomarker research. In addition, biomarkers should be considered as an integral part of the entire development program.

However, we should accept that there may also be scenarios where biomarkers have little or no impact, such as the use of biomarkers to explain variability in drug response when there is no evidence of unexpected variability. We should try to focus our efforts relating to the use of biomarkers by using existing knowledge of disease, drug and current biomarker technology to identify realistic opportunities where biomarkers can make a difference. With regard to data reproducibility, quality and standards there is no easy solution other than to say that the entire biomarker research community needs to work together to ensure that biomarker data are fit for purpose.

What specific methods and tools can companies use to increase the successful application of biomarkers in the evaluation of drug therapies?

It is hard to specify methods or tools that can generally improve the successful use of biomarkers across all the potential clinical applications. One approach is the use of modeling, simulation and decision trees to estimate the probability of success for the range of development options and study designs where biomarkers are being considered. This approach helps project teams focus on what they are trying to achieve and to

understand the options and implications. It is also important to have access to a biomarker knowledge base that includes disease and drug specific information, scientific and regulatory developments in biomarker research and case studies describing biomarker applications. Such a tool would be a very valuable resource.

How do you see the use of biomarkers in the pharmaceutical industry developing over the next fi ve to 10 years?

A lot of biomarker research in recent years has been driven by the ability of biomarker platforms to generate increasingly large volumes of biomarker data. However, we are still developing the capabilities to perform the best analysis of these data. These analysis methods need to go beyond the traditional statistical

Detect disease

Monitor progression/ recurrence

Stage disease

Sentinel principle disease specific biomarkers Predict response to treatment

Monitor treatment compliance

Determine treatment efficacy

approaches used in clinical trials. They need to account for the biological relationships in the biomarker data as well as the statistical associations with the clinical data.

Over the next few years, statisticians, bioinformaticians, computer scientists and others will be working together more to develop methods for use in clinical biomarker research.

These methods will open up many opportunities such the use of a combination of biomarkers, clinical information and environmental variables for predictive modeling. When we develop these tools, we’re going to see a more integrated, informed and pragmatic approach to the use of biomarkers.

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ASK THE EXPERT

Building kinase switches The design and development of small molecule kinase inhibitors is a challenging task. A chemical genetics approach modulating kinase function is finding its way into pharma drug discovery programs via the use of innovative new mouse models.

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rotein kinase drug discovery is a major area in the pharmaceutical industry, with an estimated one-fourth to one-third of drug discovery programs targeting protein kinases. Identification of the relevant kinase targets of small molecule inhibitors is still a significant challenge in order to analyse their therapeutic potential for a given disease. Non-specific binding of small molecule drugs to other kinases does not allow assessing the biological role of the target kinase and hampers the identification of the actual on-target effect of the inhibitor.

Taconic is now commercializing an innovative tool that addresses some of the current challenges in kinase target selection and compound profi ling. This technology platform is called KinaseSwitchT. Use of the KinaseSwitchT technology allows the specific inhibition and pharmacological regulation of only one kinase. Thereby, KinaseSwitch provides insights into the biological function of the target kinase and can be used to assess specificity of pre-clinical drug candidates.

This innovative technology is using chemical genetics and has been developed in the laboratory of Prof. Kevan Shokat (UCSF; Senior Scientific Consultant to TaconicArtemis). The approach utilizes genetics to insert silent active site mutations into the target kinase, creating an ATP analog-sensitive kinase allele (ASKA). The mutation in the kinase active site will cause a slight conformational change of the ATP binding pocket.

This unique, active site structure has been used by Prof. Shokat to develop a novel class of orthogonal ATP competitive inhibitors. These inhibitors will not recognize or bind to WT kinases, but specifically bind and inhibit the genetically mutated target kinase. Insertion of ASKA mutations will dramatically increase the sensitivity of the kinase to the orthogonal inhibitor, lowering the IC50 value of the ASKA up to several thousand folds compared to the WT kinase. This leads to the inducible and specific pharmacological inhibition of the mutant kinase.

Importantly, any kinase that will be modified with KinaseSwitch technology will be sensitive to one of

three orthogonal inhibitors (typically Na-PP1, NM-PP1 or MB-PP1). This eliminates the need for specific drugs in order to study the pharmacological inhibition of the target kinase. KinaseSwitch alleles have been published for many kinases.

At TaconicArtemis, KinaseSwitch technology is now being used to generate innovative mouse models in which the WT function of the kinase is eliminated and replaced

by ASKA mutations. In contrast to classic methods of gene modification in mice, KinaseSwitch uses the orthogonal compounds to inhibit kinase activity at any selected time during animal development, leaving the protein intact.

This inhibition is inducible and reversible.

The kinase protein can still serve its function in protein complexes. It is therefore not surprising that a comparison of kinase knockout and KinaseSwitch phenotypes revealed interesting differences, alluding to the multiple and independent roles of the kinase protein itself and its associated enzymatic activity (reviewed in Knight and Shokat; Cell. 2007 Feb 9;128(3):425-30) During the drug discovery process, KinaseSwitch can provide useful reference points to better understand the inhibition profile of small molecule drugs. Taconic believes that this technology will not only be used for the generation and analysis of mouse models but should also find its way for in vitro applications to profi le drugs, e.g. via the generation of mutant ES cells that could be used for differentiation studies. Kinases could be inhibited in differentiated cardiomyocytes or neurons to provide insights into toxic side effects associated with kinase inhibition in these cell types. Such in vitro applications would allow ES cell lines to be integrated in the drug discovery process and become a tool during compound screening activities.

At Taconic, KinaseSwitch represents the latest technology to modify gene function not only at the DNA and RNA level by using knockouts and transgenic RNAi models, but also providing access to the latest tools to modify the protein itself. We look forward to further developing and applying this technology with our customers. ■

“Taconic is now commercializing an innovative tool that addresses some of the current challenges in kinase target selection and compound profiling”

Holger Kissel conducted his PhD at MSKCC in New York and did his postdoctoral work at Rockefeller University.

He joined TaconicArtemis in 2005 and is part of the Global Business Development team at Taconic. He is actively involved identifying new business opportunities aligned with Taconic’s long-term strategic vision.

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NEXT BIG THING

Companion diagnostics and pharmaceuticals

Chris Moriarty highlights the need for flexible diagnostic partners in pushing personalized medicine.

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ersonalized medicine is not new. Where possible, physicians have always tried to tailor a treatment to a patient’s specific requirement, but in many instances a ‘one size fits all’ approach was the only option available. Since the genomic revolution however, the power of molecular genetics has enabled a much deeper understanding of what is affl icting a patient and how they will respond to particular therapies, providing a much more targeted approach to medicine. Molecular diagnostics may now enable detection of a disease earlier, even at the asymptomatic stage, and can determine a patient’s response to specific therapies and estimate the optimal dose.

These new advances, whilst opening up unprecedented opportunities to revolutionize healthcare, have thrown up a range of new issues that can only be met by the most flexible diagnostic partners.

One such issue is the clear requirement to co-develop and bring to clinical utility a companion diagnostic assay at the earliest possible stage in the development cycle of the drug itself. Th is is essential, as the assay must go through the mid-late stage of clinical trials and regulatory submissions in tandem with the drug to gain regulatory acceptance as a companion diagnostic by bodies such as the FDA. So, what is required? Firstly, the diagnostic company must have the in-house R&D expertise, flexibility and ‘band-width’ to allocate resources rapidly to the development of a companion diagnostic. There must be the ability to rapidly raise and screen antibodies in-house if it is to be an immunoassay-based diagnostic, to ensure reliability and consistency of supply. Alternatively, if it is a molecular-based assay, robust and flexible development protocols are required, especially for SNP or gene expression arrays where specific and sensitive genetic biomarker detection is required in combination with algorithm-based decision-making.

Ideally, the diagnostic partner will have a proprietary multiplex platform enabling rapid validation and

standardization of both the assay and the platform in combination to meet regulations such as FDA 510k.

No matter which format the assay takes, the diagnostic results should be easy to interpret; ideally a lowdensity protein or molecular array, as adoption in non-specialized laboratories, is a proven key to rapid roll-out of a companion diagnostic. The diagnostic partner should have an extensive track record of obtaining IVD and FDA regulatory approval for its own proprietary assays and associated technology (analytically validated device) as a proof point for successful clinical validation and regulatory approval of the companion diagnostic.

Finally, the diagnostic partner should have reference laboratories and/or CROs utilising their technology to speed up roll-out and adoption of the companion diagnostic globally.

With over 27 years experience in biomarker assay development, Randox Pharma Services is one of a limited number of diagnostic companies able to respond quickly to the demands of this new paradigm, capable of developing customized molecular or protein biomarker arrays for its award-winning Biochip Array Technology. Th is expertise is now being offered to large pharma partners to develop companion diagnostics and bring them to a clinical setting rapidly, thus ensuring personalized medicine is a reality.

“Molecular diagnostics may now enable detection of a disease earlier, even at the asymptomatic stage”

Chris Moriarty obtained a BSc (Hons) degree in biochemistry from The Queen’s University of Belfast, and following a 12 year career in business development and marketing, was recently appointed Global Business Manager for Randox Pharma Services, a dedicated division within Randox Laboratories focused on the specific requirements of the pharmaceutical and CRO industries.

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INDUSTRY INSIGHT

Newhorizons

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With emerging markets set to overtake more developed countries as areas of unexplored pharmaceutical potential, Frost & Sullivan’s Sumit Sharma offers a commentary on their importance to the industry’s future success.

I

n the past 10 years, the pharmaceutical industry has witnessed a vast change in its landscape. Where the Western market once thrived in top position, fueled by continuous innovation and rising prices, it now fi nds itself contending with colossal amounts of expense and risk. Conversely, less economically developed countries have been pushed up the grid with the introduction of higher standards of infrastructure – which in turn is attracting multinational companies. It seems as though the race to enter the emerging markets is well and truly on.

One of those best placed to comment on this situation is Sumit Sharma, Senior Vice President for Emerging Markets and New Business at Frost & Sullivan.

“Traditionally in the 1970s and 1980s,” begins Sharma, “pharmaceuticals as an industry were primarily driven by North America and Western Europe. Most of the drugs were designed to meet the needs of the more developed part of the world, dealing with diseases that were more common in North America or Western Europe because that’s where the money was.

“As we moved into the 1990s, there was an emergence of new economies where the likes of China, India and West Asia Pacific started to take off. The pharmaceutical industry saw the population of these economies and one of the things that they started doing was taking a lot of their existing products there. When it started to work, many of the new products were designed around these economies and diseases. Excluding the drying of pipelines that we see now, that was a huge paradigm shift .”

Running dry Indeed, there is no escaping that 20, even 30 years ago there was an abundance of drugs in the pipeline that upped the valuation of pharmaceutical companies and their share prices: everything was upbeat and there was plenty of innovation and constant demand. In the last five years, however, all of this has significantly reduced due to the cost of and effort involved in R&D and bringing out new drugs, getting approval from the FDA and registering in different markets. Nowadays, it’s far

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“I strongly feel that the companies that already have a strong strategy in the emerging markets will be more successful than others in future years”

more difficult for pharmaceutical companies to continue to produce blockbuster drugs, which is unquestionably having an impact on their current valuations.

“These kind of changes are having a massive impact on consumers and within the pharmaceutical space,” continues Sharma. “The generics, which have dropped in price, can compete far more openly now – and far more smartly. They’re hiring people from the ethical side to brand their drugs and make it big in the lower set of the so-called ‘weaker economies’. A lot is happening, so it’s changed significantly.”

Th is significant change has come from a simple fact: pipelines are running dry and new markets are naturally attractive. Going one further, Sharma outlines that there are three major issues: the emergence of generics, the growth of new economies and the indisputable fact that the pipelines are indeed drying up. All of this is driven by the economy and the way that consumers in emerging markets are increasing significantly. Diseases such as diabetes, cancer, cardiovascular disorders and even asthma get far more investment today in China, Russia and India than in any of the emerged markets. In addition, the relevant governments aren’t too concerned whether a patient consumes a drug made by a multinational or a local company, as the relative allocated budgets allows generics to easily meet the needs of patients.

However, the presumptive grouping of all emerging markets together can be a dangerous one. The term ‘pharmerging’ that has recently been bandied around suggests that there is in fact one blanket strategy to cover all emerging nations. Th is is simply not true.

Of course, some of the bigger pharmaceutical companies might have an input in the majority of emerging markets, but judging which ones will work within their respective portfolios comes down to a combination of history and fit.

“As we speak today, China is up there,” asserts Sharma. “It pretty much functions as some of the companies function in North America in terms of their depth and breadth of operating and reach of distribution. China is a far more developed emerging market in the respect that you have a greater focus in terms of human resources, products being launched and marketing activities. I would still put China outside the others – basically the bricks and mortar – of Turkey, Indonesia and Mexico; then you put the bricks up and complete it with a ‘K’ and call it Korea.

“China is by far the biggest emerging market. You have the major ethical players who make it big in the urban part of China with their regular blockbuster drugs and maintain a very good uptake rate. Then you have the generics, which are benefiting the tier 3 cities whilst the tier 1 and tier 2 cities are with the big multinationals. It’s the sheer size of the market that is helping China accommodate pretty much everyone.

“Personally, I see China as emerged. It’s not at the same level yet as you’ve seen in North America where everything is much more regularized and far more legalized. Regardless, it’s far beyond the likes of India, Russia, Brazil and Turkey, simply because the market is big; they’ve accepted every type of company plus they have their own generics and a great healthcare program in place, which is ensuring that everyone has a piece of the pie.”

Characteristics Sharma predicts that in the next 10 years, India will be where China is now – simply because of its sheer size and the fact that it has the unique advantage of being a completely self-producing market. In addition, India has benefited from its history of maintaining a quasi-colonial healthcare system; these kinds of characteristics help companies penetrate a bit faster. In two to three years time, according to Sharma, India could potentially become the second or third biggest global market.

“After these two,” predicts Sharma, “I would put Korea. Again, it’s a massive market and very developed.

It’s smaller than Japan, but it competes in terms of its similar demographic characteristics and a highly sophisticated healthcare system that has witnessed a lot of expensive investment in patients. Many expensive

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drugs, such as ones focused on obesity, have become big in Korea. While it may not be sustainable as it’s not as big as Brazil or Russia, it has a sophistication about it that has seen companies focus more on it than Japan.

In fact, Japan is dying out because of the downturn in the economy.

“Turning the focus on Turkey and Russia – Russia is an extremely tough market, as they have to deal with exterior control factors and politics to get drugs approved and to build distribution networks. Distribution is a massive hassle in Russia, which makes it difficult for multinationals. I’ve had conversations with GSK, sanofi, Novartis and others trying to do business in Russia and they feel that they will face roadblocks simply because they’re of European or North American origin.

“What’s more, Russia’s infrastructure is not improving. There’s a huge health deficit there and their disease programs are not in order. A lot of people are not treated, and as a result they die. The mortality rate in Russia has risen significantly, with life expectancy rates in the 50s and early 60s. Worryingly, a big chunk of the problems relate to mental disorders, hepatitis and liver issues because of alcoholism and cardiovascular disorders that aren’t addressed because no disease program are in place to control them.”

It becomes clear that companies look at where the biggest opportunities are in terms of size, ease of doing business and how regulated the market is. Today, although China and India are not 100 percent there yet, if companies decide to ignore them, they may as well “shut up shop” as Sharma puts it. However, with a multitude of other challenges and potential issues relating to culture and political health, companies will have to be astute in their considerations.

“One of the biggest issues in China and India is

fi nding the right people to work for you. American, UK or German field representatives are slightly different people to those you will fi nd or hire in China or India. Here, you want people who are much stronger on the drug side in terms of the science behind it. In China and India, you want to hire people who have rooted relationships – so it’s difficult to fi nd people. You have to be very ‘local’ in these places and many companies are missing this opportunity simply by being extremely multinational or globalized in their approach and not being flexible. Being local is an opportunity but also the biggest challenge facing companies.

“Even getting your human resources right – marketing managers to salespeople – is pivotal, as these are the most important people who will go out, sell and detail the drugs. If these people are not well trained, or they’re not the ideal ones for a local market, then it’s certainly going to be a struggle. HR challenges are large and many.

“Secondly, I would say that these places are becoming more expensive to operate out of. Every multinational is trying to get into India and China, so there is a huge demand for real estate; if you want to set up factories and distribution networks and you’re not doing it right now, it’s going to be a massive challenge to do so in the future purely because of the expense.

“Besides the pharmaceutical standpoint, getting the local sales infrastructure in place with local skills and relationships is key. In addition, fighting the government at times and being a lobbying agent for price and reimbursement is a massive challenge because you’re an outsider and have no say. The trick is to partner with a local company or agency and hire some powerful local people who could be part of your organization.”

There seems to be a vicious cycle of wants versus challenges; for some of the least emerging nations, political instability has shut down any hint of an opportunity for multinational companies. “If you look at some of the emerging markets – let’s leave out Western Europe, North America and Japan – and consider the rest of the world as still emerging and plot it on a curve, you will see that the ones that are not even on the curve yet are the nations that face huge political crisis: Africa, Latin America and certain parts of the Middle East.

“These are big markets with huge opportunities because people are extremely sick, as a generalization, because they live in unhygienic environments. The problem arises from the fact that governments don’t focus on healthcare because they tend to spend the majority of their budgets on defense. Remember every government that spends a dollar on defense spends 50 cents less on education and 50 cents less on healthcare.

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“One of the Every government spending a dollar more on defense is leading to lesser healthcare spends, which is not helping biggest issues Africa or places like Brazil. in China and “Brazil’s biggest problem is that they don’t have the India is finding infrastructure on the healthcare side; they don’t have the right people the skills, so it’s a massive challenge to build a health infrastructure. It’s not like a service industry where you to work for you” just set up shop and you’re done. Hospitals need to be built and skills need to be acquired. I don’t think there are political problems in Brazil as such, but Brazil is not a safe place and the government spends a lot more money on security and law and order, which doesn’t help because it means they’ll spend less on healthcare. Making this problem worse is the huge aging population in Brazil.

“If you want to work with such nations successfully, you should always have the government on your side and keep the Department of Health happy, because if they don’t approve any of your drugs, millions of dollars could be lost. To give an example, GSK has been in Asia in all those tough markets like the Philippines, Indonesia and Vietnam – and they’re doing quite well. One of their greatest strengths has been working very closely with the government and helping during the political challenges they faced in the 1980s.

“How did they help? By saying that they would be in a position to drop prices, conduct forms of social marketing and run some disease program. Those kinds of things help, and today, any drug that GSK tries to launch in these markets gets registered, approved and to market faster.”

Current climate One would have thought that the recent worldwide economic downturn would have stopped movement into emerging markets, but Sharma is keen to assert that the exact opposite is true: companies are entering emerging markets because of the economic downturn, and if anything, emerging markets have saved pharmaceutical companies as they have their own domestic economies to consume the majority of products. Underpinning this is the view that the global economic crisis has had very little impact on the healthcare industry because it has been battling its own recession for the last 10 years, with fewer products coming out, more expensive price tags and governments cutting back on spending.

“Companies have gone to emerging markets a bit more aggressively,” continues Sharma, “because they realize that in the US, the government’s not going to spend much more on healthcare, while emerging markets such as India and China have not changed their economic strategies, so healthcare has continued to grow. In addition, if you take certain disease areas such as obesity or asthma that are traditionally common in North America, you soon realize that they are just as common, if not more, in China because of the smoking and food habits.

“What these pharmaceutical companies are trying to do is get there at an early stage where they can go in with the right products and get in on preventative healthcare – where drugs are produced or launched with the intention of controlling such factors at an early life stage. Because of the affluent Chinese and Indian societies we see today, there are plenty of drugs coming out that control obesity and glucose levels – drugs like Abbott’s Reductil in China. We’re currently doing some work where we’re trying to understand the psychology of the people who take these drugs and what it comes down to is wanting to be thinner than the next person.

“It’s this consumer psychology that these pharmaceutical companies are picking up. They’re launching these products because younger, 20-something women go to doctors asking for a prescription for Reductil and then begin a three month dose just

to maintain their waistline – and they’re willing to pay for it. In years to come, targeted, personalized drugs for these types of demographics, and I would even include Africa a few more years down the line, will prevail.”

The next question to be answered is, who is better geared up to deal with working outside of their own home markets? For European-based companies, who have more of a history of thinking about markets outside of their own, there really is no competition. Sharma even goes as far to say that in 10 years time he doubts that many of the current North American companies will still exist.

“It’s a bold statement,” admits Sharma, “but with drugs not getting approved, the US government might have to bail the industry out; it’s one of the flagship industries in the US. The pharmaceutical business originated from here and France. My view is that there will be far more consolidation and this will make the European companies stronger. What I normally see is that the companies who are doing well in China are the non-American companies; they have worked out that it is largely about cultural adaptation and an ability to think on the local scale. It’s also the fact that a lot of the French and British companies have been there for a very long time due to colonial history.

“I strongly feel that the companies that already have a strong strategy in the emerging markets will be more successful than others in future years. The population isn’t growing much in Western Europe and North America but a lot of untapped population still exists in China, India and even Brazil and Russia.

Then, of course, you have Turkey, Indonesia, Malaysia and Korea, to name a few. However, the companies who will do the best will not only be involved with emerging markets, but will also be the ones who don’t ignore their home markets. That would be suicidal as those are the more mature, bread-and-butter markets.”

To return to specifics, Sharma analogises where China will be in 10 years time by putting it like this: “China did the best modern-day Olympics in 2008. No other country will come close to that in the next 10 to 15 years, so China could surprise everyone and emerge in the next one to two years.” It may seem slightly tenuous, but Sharma’s message carries validity. With the right companies being attracted to a sustainable infrastructure that can also provide a massive population base, Sharma predicts that in roughly 20 years’ time India will be as big as the US, and China will be the biggest emerged market to date. With such a prediction, it’s no wonder that big pharma’s explorers continue to head off to far-flung shores.

Sumit Sharma is Senior Vice President of Emerging Markets and New Global Business for Frost & Sullivan.

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CLINICAL TRIALS

GETTING THE NUMBERS RIGHT GSK’s Rosalind Cheetham tells Nick Pryke why pharmaceutical companies need to ensure that correctly forecasting clinical trial recruitment levels is among their top priorities.

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ver since James Lind’s demonstration in 1747 showing that citrus fruits could cure scurvy in sailors, clinical trials have been part and parcel of understanding how external substances – drugs or otherwise – can be applied to affect the biological state. In fact, the only thing that has significantly changed since then is who the facts need to be proven to; from the individual to the commercial, the citrus fruits of the 18th century have become today’s blockbuster drugs.

Yet with pipelines drying up and innovation sorely needed, the pharmaceutical industry is having to contend with rising costs, patent battles and a plethora of rights and welfare red tape just to reach the stage of clinical trials. Someone who knows the contour of this land better than most is Ros Cheetham, VP of Neurosciences MDC and Medicine Development Leader for GlaxoSmithKline (GSK).

“First and foremost,” begins Cheetham, “whenever we think about anything to do with recruiting participants into clinical trials, everything that we do has to be primarily focused on protecting the rights and welfare of potential trial participants and everything that we do must be grounded in that fact.

“Taking that into account, in terms of sites being overly optimistic about their ability to recruit, I think conducting clinical trials is a very complex issue and there are multiple factors that impact both a site’s ability to successfully conduct a trial, as well as trial participants’ willingness and eligibility to participate in one.

“As a sponsor of a study, we often seek study feasibility information from sites using protocols that are in a fairly early draft format, so they may not be complete at that time in terms of their inclusion and exclusion criteria. We do find that those initial recruitment estimates that sites make can be very heavily affected by later, additional or changed inclusion criteria in the protocol. As such, we sometimes go with incomplete information or information that is later changed that makes it more difficult for sites.”

Appreciation However, the list of reasons for a participant’s willingness to enroll is often exhaustive and unpredictable.

A change in the number of visits a group might have to make could have a significant impact on people, as could the length of a visit. For example, if visits were initially little less than an hour, and then rose with the inclusion of tests and examinations to two or three hours, that could also act as a deterrent to people participating in the trial.

When companies initially go to sites, they can fi nd themselves with issues caused by not managing to access the most appropriate site personnel to make those recruitment estimates. By contrast, some sites may have different inclusion criteria that make participants easier to recruit. All of these can, and often do, lead to inaccurate forecasts.

“There are plenty of variables,” continues Cheetham, “and one of the things that we are starting to do is to hold an investigative meeting before the protocol is fi nal.

Traditionally, we would fi nalize the protocol, get sites to commit and then we would hold an investigative meeting. Th is either means that they have to live with the protocol the way it is or we’re forced to make amendments, which are very expensive and not the most cost or time effective way of doing things.

“However, if you hold an investigative meeting before the protocol is fi nal, where the inclusion and exclusion criteria, required tests, examinations and visit frequency are discussed in detail – and where there’s peer discussion around the practicality of the trial – there’s still an opportunity for the sponsor to change that protocol and to positively impact the quality of that fi nal protocol. In doing so, it impacts the site’s ability to forecast recruitment more accurately and then deliver on those forecasts.”

If this is the case, then it raises the inevitable question of why hasn’t this been done in the past. “I think it’s a combination of things,” admits Cheetham, “but to do it this way round does require an infusion of money to cover the cost of that meeting before you’ve made your fi nal decision on participation. It could also be viewed as potentially slowing down the process of starting a trial, but I think that those are very short-term gains where you might lose in the long run by it taking longer to recruit or being more expensive to recruit because of

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the need to add additional sites or make later changes to protocol. Those upfront costs, and potentially more time, are outweighed by the potential benefits. Perhaps we haven’t always appreciated that.”

Recruitment On that note, appreciation certainly seems to be the key when looking to improve on recruitment forecasting and an ability to recruit people more efficiently. The fi rst in a long line of tools that companies feel can aid in estimating more efficiently is at the site or sponsor level; a strong, historical database that documents success in recruiting for other similar trials seems to be the most fundamental tool in this context.

“If that’s not available in-house,” offers Cheetham, “then it is possible to purchase such databases or access to databases commercially. I think we often fall into the trap of assuming that recruitment will be linear across the duration of a study – and historically that’s not the case at all. I tend to use the analogy of recruitment usually following the shape of a hockey stick. Initially sites are slow to get off the ground and, often down to a lack of familiarity with the protocol, some things need to be ironed out so the initial recruitment is usually quite slow.

“But once sites get into the recruitment phase and gain more familiarity with the protocol – in turn al-

“Traditionally, we would finalize the protocol, get sites to commit and then we would hold an investigative meeting”

lowing them to see the results of some advertising for participants – then it accelerates rapidly and you get this hockey stick type of picture. There are tools with which you can predict non-linear recruitment in that sort of paradigm. From that, you can help sites better understand what their workload is going to be at a particular point. It also helps sponsors plan for the high workload at the end of the study to get the data in-house – but a tool where you can plot variable recruitment is likely to give you a far more accurate prediction of the likely recruitment rate.

“Along a slightly different track,” continues Cheetham, “something that we have looked into on a number of occasions and I believe can be extremely helpful is getting sites to participate in a feasibility protocol.

Normally, we just ask sites to fi ll in a questionnaire about their expected recruitment, but you can do something that would require IRB and ethical committee approval whereby sites would record high-level details about potentially eligible subjects over a two- to four-week period.

For example, if you were conducting a study in bipolar disorder, you would ask them to record some very basic anonymous information for each subject with bipolar disorder that they witnessed over a four-week period.

“From that, you can make an assessment on how many of those patients would have been likely to be

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eligible for the trial and may have agreed to participate in the trial. That certainly gives you more accurate information. Again, there is a cost and time element associated with that – but it’s still undeniably more accurate than the historical side of things.”

Quality Discussing the possibility of identifying sites that will result in a higher enrolment of higher quality subjects remains a subjective area. First of all, a sponsor needs to defi ne precisely what constitutes a high quality site and quality trial patient. The problem stems from the fact that people often have different views on the subject; potential trial participants, their disease and sustainability for the trial, an ability on behalf of the investigational site to fulfi ll good clinical practice and an accurate report of their data in a timely manner are all factors that fluctuate dependent on the person in question.

Another inherent challenge a sponsor needs to consider is how high it is willing for recruitment to be at any one single site; if anything over 50 percent of trial participants emerge from one specific site then a bias sentiment could begin to prevail. What companies such as GSK are trying to avoid is sites that enter no subjects at all. Surprisingly, sites that enter just one or two participants are also a problem because they have the potential to introduce variability into the results.

“I think that to identify excellent sites requires indepth discussions with the appropriate site personnel and those discussions should, if possible, be face-toface. Moving away from the impersonal paper-based, or even internet-based questionnaires, to a much more personal discussion where you can really discuss their experience, their past trial performance and honestly assess their ability to participate in the trial in an extremely transparent manner. Ultimately, it comes down to a relationship.

“Those face-to-face discussions, especially with investigative sites that you haven’t worked with before, are very important. For sites that you have managed to work with in the recent past, a telephone conversation would probably suffice. There are defi nitely some variations on a theme here, but I think you need to promote some personal contact to have those honest discussions.”

Obviously there is plenty for companies to keep in mind, but all of this becomes magnified once it reaches a global scale. Without a doubt, the biggest benefit of conducting global trials is the possibility of opening up access to larger populations of potential trial participants. The biggest challenge in working on the global basis is the dealing with the different medical practices and treatment paradigms used in other countries.

“A careful discussion with the sites about whether their patient population looks the same as what you’re expecting in other countries and whether their normal standards of treatment are the same, or very similar, is important, so that you’re getting a more consistent population of patients being entered into the trials. Again, there’s plenty of scope for clear discussion with the local staff who will be speaking with sites about expectations, what the requirements for those sites are, sharing definitions around quality and encouraging them to have those face-to-face or telephone discussions with sites to truly understand their patient base, treatment practices, trial experience and ability to comply with all the trial requirements.

“Certainly, our philosophy is to conduct global trials and to use clinical sites in countries where not only are all these factors fulfi lled, but where we also don’t see barriers later on to potentially market the medicine if we get to that point. Global trials open up vast possibilities but the same issues apply, and it comes back to clear communication and a defi nition of exactly what you’re wanting, and if possible, that early opportunity to look at the protocols and give specific feedback about what will and won’t work in their country.

“It can be as simple as a rescue medication that is widely available and used in the US that a company may not have, but may have a very acceptable alternative.

Making the protocol able to accommodate both those alternatives early in the process is going to make things easier for sites to recruit successfully.”

Ros Cheetham is Vice President for Neurosciences MDC and Medicine Development Leader for Glaxosmithkline.

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PERCEPTIVE INFORMATICS_4June10 09/06/2010 16:01 Page 78

EXECUTIVE INTERVIEW

Effective data processing for clinical trials Paula McHale tells NGP why it’s important to maximize the value of clinical trial technologies.

“Sponsors can optimize the use of technologies by integrating systems that share redundant data”

Paula McHale is Senior Director of Product Management, Data Management Solutions, Perceptive Informatics. McHale helps ensure the ongoing success of the DataLabs Electronic Data Capture/Clinical Data Management System (EDC/CDMS) solution. She has over 22 years of clinical and technological experience in healthcare and drug development, including 15 years in a CRO environment.

78 www.ngpharma.com

The pharmaceutical industry is under increasing pressure to improve the productivity of drug development and streamline the clinical trial process. In your view, what are some of the factors behind this?

Paula McHale. Today’s biopharmaceutical industry is constantly growing in complexity and scope. The market has become highly competitive to improve product development processes and bring innovative compounds to market more quickly. There are also financial goals to meet as sponsors are expected to conduct their trials more efficiently and as cost effectively as possible.

The growing demands from regulatory agencies to improve patient safety have required sponsors to supervise their trials diligently, which has encouraged the use of technology throughout many aspects of clinical trials. Web-enabled technologies have provided sponsors and study personnel with the ability to monitor patient and site activity more closely than in the past, which gives them access to the information required to make decisions quickly throughout the conduct of the trial. This ability to observe study data so closely has also added another level of competition for sponsors, because early access to study data makes it possible to adjust future studies and plan accordingly.

Why is it important for companies to maximize the value of clinical trial technologies?

PM. Technology plays a vital role in the effective implementation and management of today’s clinical trials and has enabled greater trial productivity and ultimately faster product development. By maximizing clinical trial technologies to their fullest extent, sponsors can improve the visibility of their trials and possibly manage them with fewer resources, which can ultimately save time and reduce cost.

Sponsors can optimize the use of technologies by integrating systems that share redundant data. Some of the more advanced technologies converge multiple systems to streamline the data collection process for sites. This not only improves the overall site experience but eliminates the need to reconcile data from both sources at the end of the study and improves the overall data quality. Utilizing technologies in this way can also reduce the time to database lock and speed up the reporting process. Sponsor companies are using technology strategically to run their trials ef-

ficiently to achieve critical milestones and significantly reduce high development costs.

What specific solutions and tools can pharmaceutical companies use to ensure their clinical trial data is processed efficiently and effectively?

PM. The biopharmaceutical industry can select from a variety of today’s technologies to increase trial productivity and improve data processing. There’s a wide collection of solutions available to combat some of these initial market challenges, including electronic data capture (EDC), interactive voice and web response systems (IVRS/IWRS), clinical trial management systems (CTMS), medical imaging, and electronic patient-reported outcomes (ePRO) solutions.

However, the appropriateness of any particular solution is dependent upon the studies being conducted and the needs of the trial. Dashboards and portals should always be utilized because they expose study-wide metric data to sponsors and study teams without requiring them to log in to each system used in their trial. This data helps study teams to easily follow and manage the activity of the sites and shows the progress of the data cleaning process. Systems such as this provide simple access to data collected from all technologies used in the trial and can be useful in monitoring study team performance and CRO activity.

How do you see the management of clinical trial data developing in the future?

PM. Clinical trial technologies have enabled study teams to have ‘eyes’ at the site, with more visibility to the data being collected on a day-to-day basis. EDC tools are continuously advancing to provide new and flexible tools to streamline the workflow process and improve the site experience.

The desire to conduct deeper analysis of ongoing patient data will require more emphasis to be put on the ability to view, report and export patient data quickly and easily and in multiple formats. Having timely and detailed reporting for each site will allow sponsors to adjust the site monitoring needs based on how well sites perform. In addition, extracting data from electronic health record (EHR) systems will minimize the need for source document verifications (SDV) and reduce the need for frequent monitoring trips. n

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INDUSTRY INSIGHT

The impact of the growth of biopharmaceuticals on preclinical CROs

By Scott Boley

Scott E. Boley, PhD, DABT, is Senior Director of General Toxicology and Infusion Toxicology at MPI Research. He received his PhD in biochemistry and environmental toxicology from Michigan State University and did postdoctoral work at CIIT Centers for Health Research.

Contact Dr. Boley at Scott.

Boley@mpiresearch.com or +1269-668-3336, extension 1887.

T

he only thing certain is change. Th is axiom holds true for many aspects of today’s world, but it is a central tenet for drug development. Fifteen years ago, small molecules (chemically synthesized molecules designed to interact with a specific cellular receptor) represented the majority of pharmaceuticals under development. During the past 10 years, however, the number of therapies being developed that fall into the category of biopharmaceuticals has exploded, with predictions that the majority of therapies developed in the next 10 years will fall into this class.

For the purposes of this article, the term biopharmaceutical is used interchangeably with the terms biotechnology-derived pharmaceutical, large molecule, biologic or biotherapeutic. In the most general sense, the term biopharmaceutical can be used to refer to anything that was produced by a living cell (bacterial, yeast, mammalian, insect or plant) and may include antibodies, peptides, intact proteins, oligonucleotides, vaccines and stem cells.

The nonclinical safety program used to support the development of a biopharmaceutical can differ significantly from that used to support the development of traditional small molecules. Some of the key considerations include:

physiological system, stand-alone safety pharmacology studies will likely still be needed.

Study design With small molecules, general toxicology studies and reproductive toxicology studies would typically be conducted in rodent and nonrodent species based on in vitro metabolism profiles.

For biopharmaceuticals, regulatory bodies allow the animal studies to be conducted in a single species if the biopharmaceutical is pharmacologically active in only a single species.

Delivery methods The delivery of biopharmaceuticals presents its own challenges. Biopharmaceuticals cannot be administered orally, because they would be broken down in the acidic environment of the stomach before they had an opportunity to become systemically available. Therefore, the common routes of administration are parenteral (subcutaneous, intravenous, intraperitoneal, intramuscular).

Safety pharmacology studies In the case of small molecules, a standard battery of separate safety pharmacology studies is conducted, where the potential for the test article to affect the major physiological systems is examined. For biopharmaceuticals, these studies may not be conducted as stand-alone studies; rather, safety pharmacology endpoints may be included in the design of the general toxicology studies. If the biopharmaceutical has known effects on a

These are just a few of the important considerations affecting the nonclinical research industry, which, instead of being driven by small molecules as it has been over the past decade, will now have its growth largely fueled by biopharmaceuticals. It is critical that the CRO selected by pharma and biotech companies have the experience, expertise and equipment necessary to meet the nonclinical safety evaluation needs with this emerging class of compounds.

Reproductive toxicology studies For small molecules, reproductive toxicity testing is conducted in two species. If the pharmacological activity of the biopharmaceutical is limited to one species, typically nonhuman primates (NHP) reproductive toxicology studies can be conducted solely in NHP, with the rationale being that if there is no pharmacological activity of the test article in a particular species, conducting reproductive toxicology studies in that species would not provide meaningful data.

Dosing solutions The preparation of dosing solutions used for nonclinical safety studies with biopharmaceuticals also differs from that used for small molecules. For example, biopharmaceuticals are more prone to “adhesion” than are small molecules and may, therefore, require specific materials during their formulation (for example, glass instead of plastic, etc.). In addition, vigorous homogenization procedures used during the preparation of small molecules are not used in the preparation of biopharmaceuticals, because of homogenization’s propensity to create bubbles that can denature a protein.

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EXECUTIVE INTERVIEW

Centralized cardiac safety How to achieve improved science at a lower cost with the most stakeholder convenience.

What are the main advantages of a centralized approach to cardiac safety against those of a more local nature?

John Blakeley. There are many advantages, such as improved consistency, cleaner data and a single point of contact for the sponsor. However, when you really boil it down to the fundamental elements you are left with improved science at a lower cost with the most stakeholder convenience. Improved science because all ECGs in a program are centrally read in a repeatable consistent fashion. Cost is lowered because the centralized approach shifts a significant part of the spend from data management and cleaning to the central read process and hence reduces the overall spend considerably.

A good core lab should perform the data management and cleaning as part of its standard contract. It is the most convenient approach because you replace disparate multiple services and people with one single source thereby eliminating a lot of needless overhead. The standardization of equipment and process ensures waste is removed from many critical aspects of the process.

How does your project assurance methodology ensure the success of a client’s clinical study?

JB. Our methodology was developed over more than 6000 clinical trials across all phases of drug development. We discovered that every trial, regardless of phase, has certain elements that are crucial. Our approach allows us to drive a consistent repeatable approach to managing the crucial parts of projects, yet allows us to still recognize the subtle differences between studies and indeed amongst project teams. Th is overall standardization, allowing for small differences, has driven the consistent achievement of greater than 98 percent customer satisfaction in a business which today manages more than 700 live clinical trials at any point in time.

Why do more clinical trial sponsors not already utilize this centralized approach to cardiac safety?

JB. As an organization, we puzzled over this for a long

“A good core lab should perform the data management and cleaning as part of its standard contract”

time before we came to the conclusion that the prevailing attitude amongst sponsors was, “If it’s not broken, don’t fi x it,” and this led to the decentralized or investigatorled approach being the accepted standard. However, in the current climate of tighter regulation and of smaller market size for new more targeted drugs, and the continued rise of the average cost of developing a new drug, we strongly believe sponsors are looking for ways to improve science and lower cost at the same time.

The sponsor community’s real need to address the quality issue and still be cognizant of top and bottom line cost pressures will ultimately prevail and sponsors will realize that it is possible to have the best science, which is universally recognized as the result of employing a centralized approach, at a highly competitive price.

What direction do you see centralized cardiac safety heading in the next few years?

JB. I believe there are tremendous parallels that can be drawn between the cardiac safety industry and the central blood lab business. There are different technical reasons why each will go centralized but the overriding issues of better science and cost control are almost identical. We are already seeing an increase in centralization of ECG analysis and over time I feel we will reach 80 percent to 90 percent centralized. ■

John Blakeley has been ERT’s Executive Vice President, since 2007. He previously served as the sales and marketing company’s Senior Vice President, International Operations and Sales, beginning September 2006.

He also served as Group Vice President, International Business Development, from January 2005 to August 2006, and as Director of Business Development from May 2002 to December 2004.

Prior to joining ERT, Blakeley was Managing Director of MediServe Medical UK Limited, a medical devices specialist.

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“There could be times along the journey that will be challenging: people could get disenchanted. But those are not reasons to discontinue the journey; those are reasons to redouble your efforts�

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STAYING POWER Amgen’s Madhavan Balachandran tells Marie Shields why persistence is key to implementing an operational excellence campaign.

M

adhavan Balachandran had a great time in Puerto Rico, but he wasn’t there on vacation. Before taking up his current position as Amgen’s SVP of Manufacturing, Balachandran was based for five years at the company’s manufacturing site in Juncos.

Juncos is the company’s largest and most complex manufacturing site, representing every element of the manufacturing process, from receiving components from the far corners of the world, to warehousing them under the appropriate conditions, to making recombinant proteins. Balachandran went to Juncos to set up the bulk manufacturing operation, and he found the experience invaluable.

“The entire manufacturing supply chain is represented in Puerto Rico. What we call the formulation, fi lling and packaging operation – where we formulate for use as a human therapeutic and then fi ll it into containers for injection – has been there since 1994,” he says.

“In 2002, we decided to expand that operation to include the upstream bulk manufacturing. The bulk is formulated for use as a human therapeutic and fi lled into primary containers – vials or syringes – before being labeled and packaged.

“I was dispatched to Puerto Rico to oversee the engineering, design, construction and commissioning that would lead to the documentation and demonstration to ourselves and to regulators that what we’d engineered and constructed met operational and regulatory requirements.

“All that was done, and we set up the operation to produce commercial product.

In the meantime, we, as a company, were growing and introducing new products. We decided to expand our existing formulation, fi lling and packaging operation at the same time that we were building and licensing the bulk protein manufacturing operations.”

During this process, Balachandran was exposed intimately to all these aspects of operations – not only the different kinds of manufacturing, but also its different stages, from engineering to licensure to commercial operation. He says he feels privileged and lucky to have had that exposure and believes that it prepared him well for his current position.

Going Lean When asked about the challenges that might arise during a Lean implementation, Balachandran stresses the essential aspect of frequent communication, as well as the need to be persistent. “Out of my own experience of over 30 years, I would say that if there is one single factor that predicts success in anything a company might undertake to do that has far-reaching consequences, it would be persistence.

“That one single characteristic, along with producing strong results – more than genius, more than creativity, more than anything else – the sheer need to be persistent, dogmatic and unrelenting in what you decide to do is the ultimate predictor of success.

“It’s also a challenge. That probably applies in most endeavors, and certainly no less so in the case of operational excellence or a Lean approach. In general, there could be times along the journey that will be challenging: people could get disenchanted. But those are not reasons to discontinue the journey; those are reasons to redouble your efforts.”

Th ree years ago, Amgen developed a customized Lean deployment strategy that took into consideration the relative youth of biotechnology, Amgen’s unique culture,

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and the recommendations of Lean experts. The team achieved monetary savings in the first six months and created enough positive momentum to widen the net in its next phase.

Th is move toward greater operational efficiency did not come about completely spontaneously, but arose from the circumstances the company was facing at the time. “In some ways, it was thrust on us,” Balachandran explains. “Until late 2007 we were growing quite rapidly, as a company, and also within operations. Some of that changed in 2007, for a number of reasons.”

Those reasons included the related sales impact of the introduction of black box warnings for Amgen’s anemia drugs, the erythropoiesis stimulating agents Epogen and Aranesp. A black box warning – the strongest the FDA requires – is implemented when medical studies indicate that a drug carries a significant risk of serious adverse effects.

“Our manufacturing plans had to be adjusted,” Balachandran says, “We had to change our way of thinking. It was important for us to keep quality high, but we had to gain additional efficiencies, and we had to get faster in the way we made and supplied products to our patients.

“Some of the growth plans, behind which we were preparing our own operations plans, had to be adjusted, which, in turn, resulted in us having to modify our plans for manufacturing. We had to do it cost effectively, by introducing additional, important business dimensions into our thinking. When I say ‘our thinking’, I don’t mean the thinking of only the management team, but, in fact, through the breadth and depth of the organization.”

Balachandran explains that his team was keen to engage everyone in the enterprise in the whole endeavor, rather than have it be something that came only out of the minds of people sitting in corporate headquarters in Thousand Oaks. They wanted it to have its origins with the people making the product or fulfi lling various roles across the company, particularly in operations.

“We did this to unleash the energy and creativity of all our staff,” he says. “That was, looking back on it, a fairly significant moment, when we realized that was the way to achieve operational excellence.”

Many companies use the terms ‘Lean manufacturing’ and ‘Lean operations’ to describe the changes they introduce into their organizations, in search of efficiency and effectiveness. By contrast, Amgen uses Lean as merely one way of achieving operational excellence.

According to Balachandran, Lean is a set of tools and techniques, methods, analyses and approaches that they decided they would train themselves and their staff in. The aim was to enable the people who had ideas to improve their operations, as fully engaged staff members representing their company, to better enable them to achieve their goals and ends.

Human touch

“We like to think of it as a journey without end.

Then people understand it”

Grand plans to ratchet up operational efficiency are all very well, but the human element has the potential to make or break any improvement effort. How can companies manage the effect that people-related issues have on the implementation of operational excellence programs?

“With all such discussions on operational excellence and Lean and transformational approaches companies undertake, people are always beset with doubts about the probability of success,” Balachandran points out.

“The reason that people hesitate, in many cases, is due to their concern that with attempts to be Lean or operationally excellent, there could be a fallout regarding employment, reductions in head count, reductions on growth plans, and so on. Those are natural concerns that many organizations struggle with at the outset of such efforts.”

Balachandran admits that Amgen was not immune to these kinds of doubts, but there are a couple of principles that the company recognizes as important for the long-term success of its operational excellence journey.

One is the engagement of people who believe and act as if they are accountable for the success of the company and that the future of the company is in their hands, not just in the hands of the CEO or the senior managers.

Balachandran’s point is that all 17,000 Amgen employees collectively and actively contribute to that future success.

“That is something that needs to be repeated and repeated and repeated,” he says. “Most people get it, though there are some who don’t, who continue to be cynical and skeptical. Those are inherent challenges. But by and large, the majority of the people understand, when you communicate that the fate of the organization is in their hands.

“Having said that, we have to follow that up very quickly and in a determined fashion by giving them the tools and the training and the coaching and the patience and the communication, all of this repeated time and time and time again, in almost a never-ending way, to stress its importance.

“It’s a constant stream of life in the organization.

There literally is no end. When people think of it as a journey with an end, that journey is fated to failure. We like to think of it as a journey without end. Then people understand it.”

Balachandran is quick to underline that this is not some kind of ‘Shangri-La journey’. “Always we are confronted with people asking the question: ‘If we do this, what’s in it for me?’ Our growth opportunities will diminish if we don’t grow, if we get more efficient, if we use resources more efficiently, which means we’ll have fewer people, which, in turn, means less employment, which, in turn, means fewer promotions.’

“These are facts of organizational life in any endeavor of the kind that we’re talking about. However, on the posi-

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tive side – and that’s the communication challenge that we all face – is the intellectual and professional satisfaction that staff at all levels gain from this. They’re better prepared to deal with professional life. They’re better prepared to deal with challenges, not only at Amgen, but throughout their professional career.”

Balachandran stresses that this is a good thing for staff, as they are better prepared to cope with wherever their careers might take them. He fi nds it gratifying that the program has gone well during the three years since the beginning of its implementation.

New growth

operations in nearly 50 countries, and plans to continue expansion into underserved and fast-growing markets.

All of this has implications for the supply chain – how it is managed, who makes the product, where the product is made, how much is produced, and for which countries.

There are also issues of storage, and the amount of differentiation allowed from country to country.

As Balachandran says, “It raises a host of questions that we have to be prepared to deal with and answer in a way that’s good for patients and that’s good for the countries we do business in, as well as in a way that is costeffective and affordable, and that allows us to continue to survive as a thriving business.”

In Balachandran’s view, supply chain optimization is a contradiction in terms, because the supply chain can never be fully optimized – it is always suboptimal. “People say, ‘We are going to optimize the supply chain.’ But you cannot, because when you say you have optimized the supply chain, it suggests that you’ve reached perfection, and of course we will never reach perfection.

“For people who are professionals in the supply chain, it’s an extremely stimulating exercise. The challenges that stimulate the best minds in the company are quite significant, and are inspiring to a lot of people who work here, because of our ambitions globally.”

Balachandran believes the need for increased operational efficiency will continue to grow. He recalls the avalanche of new products that came through in the 1980s, when the priority for the industry was to get them approved, made and launched.

As we enter the second decade of the 21st century, a different set of external business circumstances prevails: there are fewer new products; it can be harder to get them approved; there is more pressure on the industry from the regulators and from government regarding safety; and the hurdles for approval are being raised.

“There’s a whole different set of dynamics today com“Supply chain pared to 10, 20 or 30 years ago,” Balachandran says. “And optimization is then there’s pressure from society to reduce the cost of a contradiction medicines, which is driving new legislation, not only in in terms. the US, but everywhere across the world.

“Out of that will come competition for us from bioWhen you similars and small molecule generics, With that context, say you have it is inevitable that we, as an industry, in addition to not optimized the taking the foot off the pedal in innovation and the search supply chain, for new products, will certainly have to step up our effort on getting operationally efficient. it suggests that “That’s part of the increasing sophistication that will you’ve reached be thrust on the industry, which has already been thrust perfection, and on other industries that have predated us. We’re going to of course we be following in the footsteps of these other industries that have gone ahead of us, and have dealt with these kinds of will never reach circumstances before.” perfection” Amgen itself faces some very specific challenges when it comes to ensuring operational e xcellence, with

Personalization There are other innovations happening that directly affect manufacturing, such as those in the world of medicine, as physicians and life science researchers come to understand human biology better through biochemistry, cell biology, molecular biology and other life science disciplines.

More directly, there are tremendous advances in making manufacturing more efficient, which Balachandran says will inevitably mean – perhaps in the next 10 or 20 years – that the size of manufacturing plants will shrink.

“It’s going to shrink because of the technological innovation that’s happening,” he explains. “It will also shrink out of necessity, because innovation in medical discovery will drive customized, personalized medicine.

“The more personalized the medicines are, the more likely it is that we’ll have to make smaller and smaller amounts of medicine to treat people in the future. And, at the same time, what’s fueling innovation in manufacturing – where we can make these smaller and smaller amounts in more and more efficient ways – will drive our plants and sites to be much smaller than they are today.

“It’s not difficult to imagine a world in which we could make approved, licensed medicine out of a plant the size of my office. It’s not possible today, of course, but it’s not inconceivable that something like that could happen in the future. As a manufacturing person, I fi nd that incredibly thrilling and exciting.”

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EXECUTIVE INTERVIEW

New enabling technology The aseptic spray drying installation acquired by Hovione is the only one known to have successfully passed an FDA Pre-Approval Inspection. Doug Hecker fill us in.

What types of dryers are used in the development and manufacture of pharmaceutical products?

Doug Hecker. In the pharma industry, focusing on active pharmaceutical ingredients (APIs), drug products (DPs) and intermediate drug products (IDPs), the drying of oral drugs typically involves fluid-bed dryers, tray dryers, spray dryers, tumble dryers and fi lter dryers.

With respect to parenteral drug products, lyophilization is the mainstay for drying. However, it should be noted that APIs used for parenterals can be isolated by any of the aforementioned techniques provided that the drug product formulation can be sterilized (i.e. via sterile fi ltration, heat or gamma irradiation). If the formulation cannot be sterilized, then the API must be made sterile during manufacture and packaged aseptically.

One item that should be noted when comparing drying processes at API manufacturers to those at drug product manufacturers, is that it is commonplace for API manufacturers to handle and recover/recycle tremendous volumes of (flammable) organic solvents during isolation and drying. It is very rare to fi nd a drug product manufacturer accustomed to handling (flammable) organic solvents at any significant level.

What are the benefits of aseptic spray drying over other types of drying?

DH. At a high level, the key advantages to aseptic spray drying are: throughput (i.e. cost reduction) and the ability to co-process API with stabilizers, solubility enhancers, etc. Additionally, it allows one to defi ne, improve and/or manipulate physical characteristics of the resulting powder.

When looking at the other types of drying technologies that aseptic spray drying directly competes with, the one that stands out is lyophilization. Unfortunately, an apples to apples direct comparison of the two technologies is difficult, due to the enabling nature of spray drying. However, on a relatively simplistic basis, and what is of concern to customers, is that if a problem arises during aseptic spray drying, we can stop the process, isolate/fi x the problem and restart, thus saving at

least a portion of the batch. If a similar problem occurs during lyophilization, the entire batch is most likely compromised and lost.

In October last year, Hovione acquired an aseptic spray-drying production line, vial filling and backup utilities from Acusphere. Why did the company choose to make this acquisition?

DH. The aseptic spray drying installation acquired by Hovione is the only one known to us that has successfully passed a FDA PAI (Pre-Approval Inspection).

During the past six years, we have seen growth in our spray-drying business for both non-potent and potent compounds and formulations, the emergence of the solid dispersions market and the great work that other companies have been doing on utilizing aseptic spray drying in vaccines to eliminate the cold supply chain and thus actually delivering therapeutic doses of vaccines to thirdworld countries. Based on all of these factors, when the opportunity to acquire this technology and additional operational capabilities became available, it was a natural fit and in alignment with our strategic growth plan.

How does the addition of this new equipment allow Hovione to solve current and future challenges?

DH. The challenges our customers face are opportunities for Hovione. A considerable fraction of the new chemical entities (NCEs) being developed have limitations in terms of solubility and bioavailability. Moreover, the percentage of NCEs with bioavailability limitations has increased over the past five years and this trend is expected to continue in the future.

With these issues and the experience we have in solving these problems using conventional spray drying for non-sterile compounds, the obvious next step was to raise the bar and solve these problems for APIs, NCEs, IDPs and DPs that needed to be manufactured aseptically. Additionally, as this is an emerging technology, utilization of Hovione’s aseptic spray drying technology does offer our customers the opportunity to develop intellectual property around their products.

“The challenges our customers face are opportunities for Hovione”

Doug Hecker is currently working as the Global Business Director for Particle Design at Hovione. He has more than two decades of experience in GMP manufacturing for APIs, novel excipients and sterile drug products. Hecker had a primary role in establishing Hovione’s contract GMP spray drying business.

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EXECUTIVE INTERVIEW

Protein-based therapeutic manufacturing

By Robert Broeze What is the current state of protein-based therapeutic manufacturing in the pharmaceutical industry?

Robert Broeze. Outsourcing of protein-based biopharmaceuticals has increased significantly over the last decade due to a number of factors.

A major industry driver has been the expansion of the market for biopharmaceutical products. Biopharmaceuticals can be highly effective and potent, can have fewer side effects and can cure diseases rather than merely treat the symptoms. These advantages, combined with the number of diseases treatable with biopharmaceuticals, are driving demand for these drugs worldwide.

In 2009, biopharmaceutical contract manufacturing revenues worldwide were forecasted to reach more than $1.5 billion, with the strongest segment of the market being GMP production. It is estimated that 700 biopharmaceutical products are in clinical trials, with another 900-1000 in pre-clinical or early clinical development. Large pharmaceutical companies are increasing their outsourcing of development, manufacturing, testing and fi lling of products in their development pipelines.

The strongest growth continues to be from the many biotechnology companies that elect to outsource pre-clinical through commercial development in order to avoid the cost and risk of establishing in-house manufacturing.

Manufacturing therapeutic proteins is an inherently expensive and time-consuming process. How do you reduce cost and time expenditure for the next generation of biotech drugs entering the pipeline?

RB. In the present economic environment, many companies outsourcing the development and manufacturing of their biopharmaceutical products are very cost conscious and are sensitive to timing issues. As we develop proposals and project timelines for our clients, we invest considerable time to determine precisely a client’s specific needs for their development program. We work very hard to tailor their program to meet their specific development and financial needs.

In order to reduce development time and keep costs down, it may be necessary to eliminate duplicate or repeat development runs and scale up directly to pilot and clinical scale manufacturing. As an example, instead of performing five runs at the 12 liter scale to demonstrate the robustness of a process, a client may choose to have us perform only one or two 12 liter runs and then move on to the pilot scale.

Th is presents a degree of risk to the client but many clients are willing to accept this risk in order to keep costs

low. In addition, clients may choose to have us produce their clinical material at the smaller scale as a way to reduce risks. Producing product to meet only their immediate needs through smaller batch size is a way that clients may choose to reduce cost significantly.

What methods look most promising for providing customers with solutions for advanced APIs? RB. Fusion proteins are an area of protein therapeutics where we are seeing an increased level of activity. Fusion proteins offer the opportunity to engineer unique targeting properties and activities into proteins by designing combination molecules that are not found naturally. These hybrid structures can be used to address specific clinical needs. We expect that there will continue to be increased interest in this area as companies develop more and more experience and expertise in working with these novel proteins.

How do you see the area of manufacturing therapeutic proteins developing within the pharmaceutical industry over the next few years?

RB. We see the use of single-use technologies increasing significantly in

the next few years and having a tremendous impact on the manufacture of therapeutic proteins. Laureate has utilized single-use technologies in our facility for many years and we view this technology as being applicable for the manufacture of clinical as well as commercial protein-based therapeutic products.

Single-use technologies have been developed for all aspects of biopharmaceutical manufacturing activities.

Several companies have developed single-use bioreactors within the past five years. Such bioreactors offer a great amount of flexibility that is not available with fi xed stainless steel bioreactors.

For example, they offer the advantage of having all Robert J. Broeze is Chief Commercial OfďŹ cer, Laureate product surfaces as disposable and discarded after use.

Pharma. Broeze has more than Th is simplifies the product changeover procedures and 20 years of experience in the biopharmaceutical industry. signifi cantly decreases the time for these activities.

His technical expertise spans research, development, In addition, single-use technologies are more porcharacterization, validation, table than fi xed stainless steel systems. A process can be testing and cGMP manufacture of biopharmaceutical developed in a pilot facility and the equipment moved to products, from pilot to phase III clinical and commercial another facility for use in clinical manufacturing. Develscale, with a strong emphasis opment of single-use technologies in other manufacturing on monoclonal antibody products for therapeutic and areas such as downstream processing, buffer preparation, diagnostic use. He is a graduate of Rensselaer Polytechnic liquid storage, handling solutions and aseptic fi lling are Institute, where he earned both having a similar impact. „ his BS and PhD degrees.

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PROJECT FOCUS

Breakthrough shrinks new plant engineering time

By Jan Rougoor

N

ormally, the engineering planning for new production facilities would have to be followed by a time-consuming round of application soft ware programming for the individual process functions. In a pilot project, the combination of Siemens’ design and engineering software Comos PT and the Simatic PCS 7 control system has made it possible to bypass a major part of this programming.

Instead, the DCS (distributed control system) application soft ware was generated directly from the specification data held in Comos PT. Additionally, subsequent changes, directly made in PCS 7, can be automatically transferred back to Comos PT. Th is bidirectional data transfer enables a continuous synchronization of specification and implementation – a perfect solution for the GMP environment.

“The new approach has obvious benefits by reducing the time needed to design production facilities”

direction of integration with this pilot project, and we were successful.”

Savings Tauchnitz identifies savings of more than 20 percent compared to what it would previously have required to get the preparation tank up and running. However, he emphasizes that the COMOS PT/PCS integration has much more ground to cover. “Now we are working with Siemens to develop the integration further. We are addressing important items that have not yet been implemented – the automatic creation of the equipment modules for PCS 7 and the bidirectionality of the automatic data exchange. The last item is especially important for us as an operator.”

The new approach has obvious benefits by reducing the time needed to design production facilities, but it also helps during the lifecycle of the plant. Each time a change needs to be made to the plant, it can be entered into the engineering system and then automatically translated into the actual operational system, or vice versa. Not only does this again save time but facility managers can be absolutely sure that the documentation on the planning side and the actual system are always synchronised and up to date.

Vision

More potential ahead

Thomas Tauchnitz, Head of Engineering of the Technology Process group at the Frankfurt pharmaceuticals site of sanofi-aventis Germany, had a vision of bridging these two critical stages in the commissioning of new plants. “I believed that both worlds could be ‘happily married’,” he recalls. The opportunity for a solution came with Siemens’ October 2008 acquisition of Innotec, whose Comos PT engineering soft ware had been used by Sanofi-Aventis for a long time.

“That was the signal for me that our idea could now be realized,” says Tauchnitz. Siemens and sanofi-aventis began looking at how their vision could become a reality and rolled out the pilot project in mid-2009. “We chose a small but typical plant for pharmaceutical production – a preparation tank with a volume of 3000 litres,” explains Tauchnitz. “We wanted to take a step in the

According to Tauchnitz, engineering savings of 20 percent are just a fraction of the benefits. “We can see the potential for enormous improvements. Project time is reduced considerably. Instead of four months for the system programming between the function clarification and commissioning, this time can now be about two weeks; in the ideal case just a few hours.”

Equally important, and in some ways more decisive, are the ongoing advantages. “The system documentation at the end of commissioning corresponds to the real plant conditions. These lifecycle aspects are extremely important,” says Tauchnitz. “Such a system provides the opportunity for us to become a learning organization.

Once we have created appropriate functions we can use them again and again. Certain modifications are always necessary but we do not start from scratch.”

Jan Rougoor is Director for Industry Solutions in Vertical Market Management Pharma at Siemens. Rougoor has been in the automation business for 15 years and has worked for Shell Oil and Hoechst. He joined Siemens in 2000.

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PROJECT FOCUS

The key to cost-effective manufacturing How Avid Bioservices used HyClone SUB systems to help meet the rising demand for its biomanufacturing services. By Brandon Pence

M

oving products to market quickly remains a challenge for any company, in particular those developing biotherapeutics and vaccines. As new biologics are developed for more specialized applications, the demand for large manufacturing plants with tens of thousands of liters in bioreactor capacity is diminishing.

The ability to quickly manufacture products in a costeffective manner, and in many cases locate the manufacturing facility in the region where the end product will be supplied, is becoming key to the commercial success of the biologic.

To accomplish this, more biopharmaceutical manufacturers are turning to single-use systems for liquid preparation and handling, cell culture manufacturing and bulk intermediate storage. The advantages of single-use systems have been widely documented over the past few years and include cost reduction, rapid production turnaround timelines and maintaining a consistent contact surface throughout the manufacturing process flow.

With the expanded range of applications for single-use systems, ease of implementation is another critical factor. We have taken a leadership position in the bioprocessing industry by integrating cell culture nutrients (sera, media and supplements) with single-use handling and production systems, including the Thermo Scientific HyClone Single-Use Bioreactor (SUB). This enables us to partner with companies in developing complete cell culture systems.

Advances in single-use technologies are enabling widespread use across the bioprocessing workflow. Whereas initial applications may have been in intermediate product storage, today disposable products can also be found in mixing, cell culture and harvest applications. As such, clients are looking to streamline and simplify the bioprocess supply chain. From complex bioprocess container designs to simplified, universal bag configurations, the market requires collaborating with companies that have expertise in understanding bioprocessing consumables and their intended applications.

Avid Bioservices has presented data from several antibody projects using the company’s recently installed SUB. In response to growing demand for its cGMP bioproduction services, Avid installed a HyClone 1000 L SUB in its manu-

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facturing suite in November 2008, complementing the HyClone 100 L SUB that was already installed in Avid’s Process Development unit at its production facilities in Tustin, California.

“We installed our HyClone SUB systems to help meet the rising demand for our biomanufacturing services,” said Rich Richieri, Senior VP of Manufacturing and BioProcess Development for Avid Bioservices. “Our experience to date with these systems has been very positive. Avid’s commitment to efficient production has led us to innovate in a number of areas, including installing our two HyClone SUB systems. These new technologies have been very successful in reducing our processing costs and shortening project timelines.”

Subject-matter experts with the right process monitoring technologies enable clients to analyze the complete cell culture process and provide customized responses to meet customer-specific needs. In many cases, these customized responses influence the type of cell culture media and supplements used, as well as the protocols for operating production bioreactors.

Through practical application of this approach, we’ve been successful in partnering with biopharmaceutical manufacturers to achieve productivity improvements greater than two-fold compared to traditional production systems.

The industry is seeing the implementation of disposable systems concurrent to the rapid expansion of cell culture applications in biotherapeutic, and most recently, vaccine manufacturing. Through this, biotech companies are able to diversify the number of products manufactured in their facilities, as well as regionalizing the manufacturing process.

And as new technologies are developed, the integration into single-use systems will further enhance the ability to control bioprocessing manufacturing and improve delivery of new biotherapeutics and vaccines.

Our open architecture design approach allows customers to select a SUB, available in working volumes from 25-1000 L, and couple it to the client’s choice of control systems, probes and fittings to enable rapid implementation.

Customers seek this flexibility to incorporate new disposable technology into their single-use bioreactor without restriction to the manufacturer of the technology. n

“More biopharmaceutical manufacturers are turning to singleuse systems for liquid preparation and handling”

Brandon Pence is the Associate Director of Market Management for Thermo Scientific Cell Culture and BioProcessing. In his current role, Pence is responsible for global strategic business efforts primarily aimed at improving the tools utilized in bioprocessing systems, biotherapeutics and vaccines manufacturing.

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Leading the way

With the pharmaceutical industry evolving at breakneck speed, having the right leader in front of you is more important now than it has ever been. Fred Hassan, former CEO and Chairman of Schering-Plough, gives NGP his take on what makes a leader exceptional.

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ig or small, local to international, a company’s long-term success is defined by the quality of its leadership. That chosen one, that metaphorical shepherd amongst sheep, must not only let his or her ideas and visions cascade through all levels with intention and definition, but must also show the light at the end of the tunnel. This is true of all respected companies and their respective leaders, but when a merger takes place, finding the right leader for the job often takes on a whole new dimension of relevance.

In the world of pharmaceuticals, mergers and acquisitions have, in recent years, become part and parcel of progressing the industry; one of the most recent of these was the merger between Schering-Plough and Merck in November of 2009. The man who led Schering-Plough into this merger was their former Chairman and CEO, Fred Hassan.

When Hassan arrived at Schering-Plough, the company was being investigated by the FDA and SEC for accounting irregularities – not an easy introduction for any new management member, let alone one who was expected to lead it out of turmoil.

“I’ve faced a lot of challenges in my career, but this one was the biggest I’ve ever seen,” admits Hassan. “There were several things that needed to be done right away, so you couldn’t do things in sequence; you had to do them at the same time. There were the immediate issues of the regulatory and legal challenges that the company was under at the time, but there were also financial challenges in the sense that the major businesses were going down. Part of that financial challenge was cash flow – something that is not seen very often in pharmaceutical companies – but Schering-Plough was looking at a big cash burn and something had to be done about it very quickly.”

For Hassan, that meant setting up a “roadmap” as quickly as possible. Working with imperfect data, he anchored this roadmap with the board, shareholders and the entire company at a general meeting so that, from top to bottom, people understood what direction he intended to take. “It also showed that we had a problem, that we had to do a lot of work, but we had to break the problem down into bite-size pieces that we could deal with whilst still looking forward for a period where there was going to be strong, solid hope for the company. If people can see the hope – the light at the end of the tunnel – then they do build up a sense of purpose.”

Leadership qualities However, in order to achieve that sense of purpose, Hassan had to first use his leadership qualities to lead his team through the adversity they faced. “Perhaps the biggest quality that I try to work on is a sense of humility,” he explains. “If one keeps balance in one’s life and a sense of humility, then one becomes a better listener; you stay in tune with both yourself and your environment. If you can anchor yourself well within your environment then you can design a strategy to bring about change.

“Once you’ve established a sense of direction, you have to build up a sense of urgency.

If you can generate energy inside yourself and around you, the whole system starts to generate that sense of direction, letting you get on with undertaking some very purposeful things. Bringing about change is not easy, but once it starts to happen it’s a very good feeling because the whole organization comes on board and people start to believe that they can make a difference.”

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“In too many cases in pharmaceuticals, there are two or three good years after a merger, and then the stock price starts to go down again because the R&D pipeline is not supporting the larger sales base that’s been created”

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How to manage a pharma company through a merger Make it fit Make sure that the fit with the other company is good. Look at the strategic aspect first: does it fit with the strategy that your company is trying to pursue in the next phase of its development? FInd out whether it fits the next stage of strengths, weaknesses, opportunities and threats.

Communicate When you have a merger and you’re acquiring a new company force, get to the frontline managers early and get them to understand the strategy. Once people are challenged and encouraged, it’s surprising how much they can do.

Keep it simple Grow the top line, grow the R&D pipeline, reduce costs and invest wisely. Once the strategy is clear, execution becomes the strategy. As long as you don’t shift on strategy, people then start to believe and execute on it.

Focus on execution In the end, execution is what holds companies back. Strategy is not that difficult to formulate. It’s the execution that makes a difference.

Avoid complacency Complacency is also a form of arrogance.

You can rise to a certain level because of the skills you have, but then get derailed because you’re lacking balance and a sense of reality.

Staying flexible and nimble is the key to dealing with challenges.

More often than not, an understanding of how to create change in a commercial context evolves from an appreciation of overcoming a personal experience; Hassan is a prime example of this, growing up with a terrible stutter.

“I couldn’t speak in school. I had difficulties and the more I worried about stuttering, the worse it got. I still have it, but it doesn’t hold me back anymore. I decided I was going to think past it and work at the job that had to be done and not worry about this problem that I, and countless other people, have.

“You have to look at life beyond the challenge. Make a mental picture of how it might look and go for it. If I come into a tough situation in 2010, I have to make a mental picture of how things would look like in 2013 and 2014, and keep bringing it back as I go about dealing with the bite-size problems that need to be solved.”

In fact, Hassan once said in an interview that: “No restructuring or strategy will succeed long term unless you get control of your top line.” In order to re-establish control with his top line at Schering-Plough, he needed to ensure solid customer touch and experience prevailed in order to help it grow. It’s relatively easy to get the bottom line to go up by slashing costs, but as Hassan states, that is a finite solution to a long-term problem.

“If you’re growing zero to one percent and your cost structure is facing an inflation of three to four percent, you might be able to keep your bottom line OK in the short term by reducing costs. But long term, you have to beat inflation when it comes to the top line growth if you’re going to make the business prosper. Wherever I’ve gone, I’ve worked on the cost structure, but I’ve simultaneously worked on building the top-line by making good advances with customer experience. If you can do that well, even while going through adversity, then you emerge far stronger on the other side of the difficult times.”

Of course, entering a company during any period, but especially one of adversity, is usually followed by some degree of internal conflict – and Hassan’s experience was no exception. “There are people who immediately see you as somebody who might not be very good for their careers. Some of them might become active resisters – those are easier to deal with. It’s much harder to deal with the passive resisters: the ones who say they’re on your side, but they’re not and you don’t know about them until a lot later. When I develop a new program or introduce change, I try to make a judgment about those people who are the fence-sitters, those who are the passive resisters and those who are the boosters. The boosters make the program work a lot better.

“The fence-sitters you can work on; you can try to convince them. It’s those passive resisters that you have to find and ask them to make a basic judgment: are you with or against the program? If you’re not with the program

“You cannot succeed in a company if your management layers are not totally in line with the values. If there’s toxicity in the system, it’s not going to work”

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then you probably belong somewhere else. That’s where I have been pretty aggressive, and in every place there’s been a wave of change in terms of people leaving the company within the first 18 months. However, not all people who leave the company do so in that initial period, because sometimes it takes a longer time to find those who really don’t belong with the company long term.

“Usually, the way you find the passive resisters is by listening to the praise they give you; you’re listening for signs on whether it’s real praise or not. Another way is to find out what they’re telling their people about the program.

It’s my practice not to be bound by layers. I go to level three and level four. I talk with people in small groups and if the messages they’re hearing from their supervisors are not reflecting the values that I want in the new company then I do get very concerned about those supervisors.

“For example, if I say ‘I want a spirit of transparency and building trust,’ and the supervisor passes on a message that they want information to be hoarded in a certain department, or if specific political things were to happen among departments, then I would definitely start to worry. You cannot succeed in a company if your management layers are not totally in line with the values. If there’s toxicity in the system, it’s not going to work. People in management jobs have a special responsibility to show with their behavior that they are encouraging the culture that you’re trying to create.”

The right fit As President of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), Hassan is aware of the most important trait in leadership: listening. “The ability to listen is especially important for those who become CEOs, because they are in a situation where there are not too many people who challenge them and they often end up taking too much time talking and not enough time listening. I go out of my way to structure my time in a manner that I get to listen.

“To give you an example, I joined a company in 1997 that was in great difficulty. There had been a merger between a Swedish and a US company that had resulted in a lot of problems, so I was brought in as a CEO from the outside to try and make this merger work.

“I was in place in Sweden on a listening tour, talking to a medical doctor, and he said that the major product that this company was looking forward to for its salvation and future growth was compromised with a company in the US. Had I known that before I joined the company, I might not have taken that risk. But suddenly I realized that the future growth of this company had been compromised in a deal that had to be untangled.

“I got the product back before it got approved by the regulatory authorities and paid a handsome price to do

so. But afterward, the product went on to become a very large product in the marketplace. The price that was paid was far lower than if we’d let the problem fester and the product get approved – we probably would have had a totally different story for that company had I not been a listener at that point.”

Listening in Indeed, Hassan’s cautionary tale of “being a listener” spans decades. In the 1980s it was the automobile industry, while the 1990s saw a huge boom in home computing – and now we see the dominance of the pharmaceutical industry.

The one common denominator is the fact that they’ve all been extremely reliant on mergers and acquisitions for their survival. “Look at the fit,” offers Hassan. “Make sure that the fit with the other company is good. When I look at a situation in my industry, I look at the strategic aspect first. Does it fit with the strategy that my company is trying to pursue in the next phase of its development?

“Don’t get enamored by the attraction of the object of the target company; instead, fi nd out whether it fits the next stage of strengths, weaknesses, opportunities and threats. Of course, part of the strategy fit is the culture fit and how one is going to deal with that. The second is size fit. In a size-driven business like pharmaceuticals, you want to make sure that the size engine will be stronger as a result of this combination, so that the combined sales that would be generated are properly supported by the size engine.

“In too many cases in pharmaceuticals the merger occurs, the financial community applauds, there are two or three good years of increased earnings and cost reductions – and then the stock price starts to go down again because the R&D pipeline is not supporting the larger sales base that’s been created. That’s just short-term thinking and it doesn’t lead to shareholder value increases in the long term. I work very hard at the size fit.”

The final ‘fit’ that Hassan highlights is one of finance.

“If you go in at a price that is not correct and you overpay, then no matter how good a job you’ve done on the operational side after the merger, it takes a very long time for the shareholders to get their money out of the transaction. It’s very important that the financial numbers are also correct.

Of course, nobody can bat 100; the key is to recognize it early and deal with it. An early lesson I learnt was to know who you are and lead from your own strategy – don’t try and grab something just because it looks good.”

Perhaps one of the biggest challenges facing companies involved in acquisitions and mergers is the tendency for the institution to dampen in inspiration as its size grows exponentially. Many companies begin as rising stars within the industry, only to fi nd themselves running into difficulty further down the line. To counteract

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Know who your friends are Four types of reactions CEOs may experience when implementing a new strategy

Active resisters Relatively easy to spot and deal with; they make their objections obvious.

Boosters On your side from the start; show their support early and work with you to make the program better.

Fence-sitters Could go either way; you need to work on them to convince them.

this, Hassan believes that a reinvention cycle within the company every five or six years will help significantly in stopping the drift toward complacency and arrogance based purely on past success.

“It doesn’t have to mean a new CEO every five or six years,” asserts Hassan, “but it certainly means a new sense of urgency and reinvention within that time period.

The other way to deal with ‘bigness’ is to create the sense of a small company within a bigger company. In other words, empower people in smaller groups to innovate and drive the business forward while still taking advantage of the financial strength and the infrastructure of a larger company. That’s not easy, but that’s the job of the CEOs of larger companies.

“I believe that in a large operation it’s impossible to get complete energy and alignment with everybody unless you get the energy and alignment of the frontline managers. A typical frontline manager might be supervising seven to 12 people. If you can get them on your side, if

Passive resisters Trickier to spot; say they’re on your side when they’re not.

One way to flush them out is to listen for insincere praise, or talk to their staff directly to find out what they’re saying about the program.

they can become ambassadors of the center to the people that they supervise, then the direct workers will be energized and motivated. Whether you come in as a new CEO or you have a merger and you’re acquiring a new company force, get to the frontline managers early and get them to understand the strategy.

“Once people are challenged and encouraged, it’s surprising how much they can do – and it’s surprising how little gets done in terms of reaching out to the frontline and how many CEOs spend time with their division heads, or the next level below the division heads, but don’t get to the frontline managers.” Unfortunately, the reality is that it’s one thing telling people what you want them to hear, but completely another knowing that they’ve listened and the necessary message has sunk in.

“To make sure it does,” continues Hassan, “have a simple strategy like we did at Schering-Plough. Grow the top line, grow the R&D pipeline; reduce costs and invest wisely. Once the strategy is clear, execution becomes the

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strategy. We repeated this in different ways through different platforms and stayed the course; as long as you don’t shift on strategy, people then start to believe and execute on it. In the end, execution is what holds companies back.

Strategy is not that difficult to formulate. It’s the execution that really makes a difference.”

Execution

“The ability to listen is especially important for those who become CEOs, because they are in a situation where there are not too many people who challenge them and they often end up spending too much time talking”

In order to get to the stage of execution, it’s pivotal to encourage others in the organization to communicate the vision that will lead to that execution point – and that encouragement needs to come from all levels, or the “top and bottom” as Hassan puts it. “From the top, I expect managers to model the behavior and messages that I pass on from my level. But I also get people at the frontline with my messages and encourage them to expect their supervisors to follow a certain set of behaviors.

“Doing it in that manner encourages the middle management to align themselves with the DNA of the new company that we’re trying to form. Sometimes, if you’re only relying on the conventional hierarchy and the cascade, you become a prisoner of the hierarchy. If you can go around that hierarchy to the frontline managers and show them the expectations they should have of their leaders, that creates its own positive cascade too.

“In my opinion, the biggest derailer of leaders’ careers is a sense of complacency – which is also a form of arrogance – that starts to creep in when people have been very successful. They have risen up to a level because of certain skills they have and they believe those skills will make them just as successful once they’re at a senior level. What they start to miss is being in tune with the environment and with themselves. Many times, people get derailed because they don’t have a good balance and sense of what the reality is when they face challenges. If one stays in tune then one can stay flexible and nimble to deal with issues.

“One approach I use for group decisions is to encourage one of the group to play devil’s advocate and to show the other side of the case. As we discuss a problem it’s always good to look at the other side and help prevent bad decisions. Even in my private decision-making, I have one or two confidants at the minimum who are my naysayers in terms of things I want to do. I like to bounce things off them, recognizing that they might have the negative point of view, which may in cases be a braking mechanism on what I’m about to do. It’s very important to have balance when it comes to decision-making.”

This idea of balance seems to permeate through the majority of Hassan’s principles. He says his executive team would think of him as a good person to work for – as proof, he points to how many people have followed him throughout his career – he is also quick to suggest that they would also think of him as a “tough” leader with extremely high

expectations for both himself and his staff. Indeed, these high expectations stem from making mistakes in the past – the only true way to create a successful business. For Hassan, his favorite mistake is an easy one to recall.

“My favorite mistake is not moving fast enough when I go into a new situation,” reveals Hassan, “and then regretting that I did not do it fast enough, but then hopefully learning, so the next time I see something like that I would move faster. In the case of Schering-Plough, I moved faster than I normally would because the opposite happened when I was at Upjohn in 1997. I was taking my time on the cultural changes and transformation. In Schering-Plough I didn’t lose a lot of time; even though I had imperfect information, I moved pretty fast. The key is to recognize one’s mistake and to learn from it in order to get better.

That’s when the best learning occurs.

“I’ve learned from a lot of people and am very fortunate to have had good mentors along the way. My style is not to have a single mentor dominate, but to learn from many.

One of those people was a former schoolteacher who happened to become my boss. I was in Lincoln, Nebraska, and he used to say things to me then leave the points he made on a little card, which I kept, and that was a very good way to learn. I still remember that person extremely well.”

Principles It is from such experiences and lessons that Hassan has formed his principles by which he runs his career and, perhaps as you would expect, they can be applied to the wider context of life principles: “Treat people with respect, make people want to come to work and succeed, make people want to have fun and they will succeed. If people are having fun, they’re likely to succeed. If they’re not, they’re most probably not likely to succeed as a team.

There are times when one has to fall backwards and give way to the other side. There are times when one needs to move forward as a persuader and get them to change their point of view; that means dealing with external audiences on public policy matters, with customers, with one’s own board and with one’s own executive management team.”

One would presume that after the Schering-Plough merger, Hassan would be willing to put his feet up for a bit and watch the world go by. In reality, nothing could be further from the truth. For the former CEO of ScheringPlough, the present involves him working with a private equity firm. For the future, who knows? Hassan certainly doesn’t: “I’m looking for a time when I might be able to take a break, but it seems as though people are always interested in accessing me as soon as possible.” Perhaps this level of focus is the greatest characteristic of a leader – and the biggest lesson to be learned from Hassan.

Fred Hassan is the former CEO and Chairman of Schering-Plough.

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WASTE MANAGEMENT

Green medicine Flushing surplus drugs down the drain is no longer an option; why pharma must reduce its impact on the natural world.

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he world of pharmaceuticals contends with its own waste on a daily basis. Packaging, chemicals and disposable equipment are unavoidable by-products of the drug-making process – but with the importance of carbon footprints and eco-friendly programs slowly seeping into the psyche, it’s time for the corporate collective to step up and change tactics.

In a bid to reduce such waste and provide cleaner, more environmentally friendly options to the pharmaceutical sector, some companies are taking it upon themselves to ‘go green’ and work towards reducing their environmental footprint.

Spearheading this initiative is Health Care Without Harm (HCWH), which aims to implement ecologically sound and healthy alternatives to healthcare practices that pollute the environment and contribute to disease.

The Executive Director of HCWH, Anna Gilmore Hall, knows better than most the extraordinary number of options available to both the healthcare and pharmaceutical industries when working towards a greener future.

“As you can imagine,” begins Gilmore Hall, “pharmaceuticals are a real problem because people are putting their unused medicines down the drain in their homes and hospitals. They either go down the toilet or down the sink drain and they end up in the water system; you’ve probably heard or read a lot about changes in the aquatic life based upon what pharmaceuticals people put in the water. We need to come up with a better solution for it. Incineration isn’t a good idea. Flushing them down the drain isn’t a good idea. There are plenty of chemical processes that can be used, but not one that can take care of all the different kinds of pharmaceuticals that are out there.

“What might work in a chemotherapy drug that has an alkaline base isn’t going to work in a cardiovascular drug that has an acid base. There’s no good answer right now. What is necessary is for us to come forward with some technologies around pharmaceuticals, which we’re trying to currently work out with a few different people and organizations. It’s an example where working upstream is really important. For instance, we’ve been talking to doctors and insurance companies to ask if there’s a way to prescribe medicines differently. The reason we’re throwing away pharmaceuticals is because we don’t use them.”

Continued on page 106

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A savior in Bhopal

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ust before midnight on December 2, 1984, a Union Carbide pesticide plant in the town of Bhopal, Madhya Pradesh, India, erupted its mixture of methyl isocyanate (MIC) gas and various other toxins into the night sky. The events of the following two days would result in the estimated deaths of 20,000 Bhopalis, the hospitalization of 170,000 and an induction into the world’s worst corporate disaster. twenty five years on, 390 tonnes of toxic chemicals abandoned at the Union Carbide plant continue to leak into the groundwater, polluting the only source of clean water available to the residents of Bhopal. The Indian healthcare system was not set up to handle such a disaster; Union Carbide and its parent company, Dow Chemicals, have made no recent contributions to the situation, which has left hospitals and institutions in and around Bhopal severely crippled. Those being offered pharmaceuticals and medical attention often end up with generic steroids and ineffective antibiotics in an attempt to treat all conditions as one.

To combat this, Health Care Without Harm (HCWH) set up its Sambhavna clinic in 1996 with the sole intention of giving

the people of Bhopal a glimmer of hope.

Sambhavna now boasts its own medicinal herb plantation, with doctors working in accordance with both allopathic and ayurvedic medicines to offer patients specific prescriptions. Their onsite laboratory for hematology, biochemistry and microscopy allows the staff to not only understand how pharmaceuticals work on a commercial scale, but more importantly allows the clinic to produce medicines and drugs at a far cheaper cost; more than 30 medicines at a cost three to five times cheaper than market preparations, to be exact. The end result of all of this is that Bhopalis are now flocking to the clinic at the rate of around 10 new patients per day.

Great care is taken by all at the clinic to ensure that any prescribed drugs do not add to the damage already caused. As a matter of principle, the clinic only buys the medicines it needs from non-profit organizations. As little is known about the efficacy of different drugs in treating exposure-related injuries, special efforts are made to monitor the effects of both allopathic and ayurvedic therapies. Doctors and therapists have evolved a system of

grading the severity of different symptoms so that relief obtained in each symptom can be documented with some degree of precision. The clinical data are then entered into a database and assessed on a monthly basis to assure the efficacy of different drugs.

Aside from the allopathic pharmaceuticals that are bought, many ayurvedic medicines are grown, developed and assessed within the clinic grounds. As a complement to allopathic treatment, such ayurvedic medicines have literally helped save and change hundreds of lives.

With the primary mission of HCWH well underway, its second mission isn’t far behind.

With huge quantities of pharmaceuticals ending up in waste or aquatic systems, HCWH aims to protect people and the environment from the contamination of ultimately avoidable hazardous chemicals. It highlights how important it is to consider a medicine’s PBT: persistence, bioaccumulation and toxicity.

Although levels are usually too low to result in acute effects such as organ damage, there is little information to suggest what else could be affected. The Bhopal clinic has already proven that an elementary version of ‘green chemistry’ can work in the harshest of contexts; perhaps more interestingly, it has worked out of necessity as opposed to choice. For the pharmaceutical industry, the choice of whether to begin to develop ‘green chemicals’ should be an easy one.

Some of the take-home natural remedies used at the Sambhavna clinic Tamarind tree: Used to treat stomach disorders, general body pain, gastric or digestion problems and in cardioprotective activity.

Tinospora Cordifolia: Used as a hepatoprotectant, protecting the liver from damage and aiding the prevention of hepatotxicity that is otherwise produced as a side effect of conventional pharmaceutical treatments for tuberculosis. Also used to lower fevers.

Ricinus Communis: Offers pain relief for chest, limb, joint and abdomen problems.

Also commonly used as a purgative and to flush out less-adverse toxins. More commonly known for its castor oil ingredients.

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12 principles of green chemistry With the spotlight on corporations to become more environmentally friendly, the US Environmental Protection Agency has outlined 12 principles that could turn pharmaceutical companies into green machines.

01

Prevention: It is better to prevent waste than to clean it up once created.

02

Atom economy: Design synthetic methods to maximize the incorporation of all materials used in the process into the final product.

03

Less hazardous chemical syntheses: Synthetic methods should be designed to use and generate substances that possess little to no toxicity to human health and the environment.

04

Design safer chemicals: Chemical products should be designed to minimize their toxicity levels.

05

Safer solvents and auxiliaries: The use of auxiliary substances should be kept to a complete minimum and innocuous when used.

06

Design for energy efficiency: Energy requirements of chemical processes should be recognized for their environmental and economic impacts and should be minimized.

07

Use of renewable feedstock: A raw material or feedstock should be renewable, rather than depleting, whenever technically and economically practicable.

08

Reduce derivatives: Unnecessary derivatization should be minimized or avoided whenever possible.

09

Catalysis: Catalytic reagents (as selective as possible) are superior to stoichiometric reagents.

10

Design for degradation: Chemical products should break down into innocuous degradation products at the end of their function.

11

Real-time analysis for pollution prevention: Analytical methodologies need to be further developed to allow for real-time, in-process monitoring and control prior to the formation of hazardous substances.

12

Inherently safer chemistry for accident prevention: Substances and the form of a substance used in a chemical process should be chosen to minimize the potential for chemical accidents.

Reducing waste Allergies, reactions and pure stubbornness all contribute to the problem that leaves the patient with days worth of unused, and unwanted, pharmaceuticals that inevitably get thrown away. To combat this, Gilmore Hall and others have been working in partnership to fi nd a way to develop and implement a voucher program.

“People could get two to four days of a specific pharmaceutical to see if it fits. If it does, they could go back and fi ll in a prescription that they know works while at the same time reducing costs and levels of excess waste. Just as we’ve done take-back programs with electronics, we could take the pharmaceuticals that we’re not using and send them back to the manufacturer so that they could dispose of them in a way that’s better for the environment than it is for us to just dump them down the drain.

“We’ve had some conversations with pharmacy chains, including people like Wal-Mart, to ask, ‘By working together, what can we do to manage some of these issues?’ People are very interested in trying a few things here and in Canada. Having these voucher and take-back programs piloted and talking to physicians and nurse practitioners to suggest that, instead of prescribing 30 days of pharmaceuticals, maybe you just need to prescribe a week, has helped push the message.

“We also have to talk to the insurance companies, because some of them encourage people to receive their drugs in 30-day batches. If you consider somebody who’s been on chronic medication for a long period of time, for example in a nursing home, and they die, they literally have pounds and pounds of unused medication that they have to get rid of because they can’t use it for another patient and there’s no alternative option. Pharmaceuticals are a real challenge to us because we know that they’re toxic to the environment. We know that they’re difficult to dispose of and frankly, no one wants them hanging around their house.”

Regard less of lifestyle or profession, almost all of us share that same secret of hoarding pharmaceuticals in drawers and cabinets. We’re all guilty of waste, but that’s only because we don’t have an alternative. Worryingly,

For more information, visit www.epa.gov/greenchemistry

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Green thinking How Johnson & Johnson is spearheading a green movement in the pharmaceutical industry.

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aby shampoo. Moisturizers. Band-aids. Perhaps the last thing one would think to link in with these products is the topic of environmental sustainability – but that’s exactly what Johnson & Johnson has been doing for the past 25 years. In fact, so much so that Newsweek magazine recently ranked it third in the ‘Green Ranking List’ of America’s top 500 largest corporations, stating: “Its commitment to climate change is rare for its peer group and it has strong environmental management in place.”

With five-year plans being interspersed throughout these 25 years, Johnson & Johnson’s latest initiative – Healthy Planet 2010 – has proposed perhaps its most inspiring goals for the next few years; and if its previous initiatives are anything to go by, then it is certainly on track to make an even bigger difference this time round.

Indeed, the company’s 2008 report detailed that not only had it reduced CO2 emissions by 12.7 percent since 1990, but it is now the proud owner of the largest hybrid vehicle fleet owned by any corporation worldwide. By the end of 2007, Johnson & Johnson had eliminated 84 percent of its secondary and tertiary PVC packaging across the company, with a four percent decrease in hazardous waste and a 10 percent reduction in non-hazardous waste.

While it’s easy to reel off statistics and tick boxes, it’s clear to see that Johnson & Johnson’s environmental success comes from an inherent care for everything around them; people and environments are indiscriminate within its credo, which begins and ends with the words “we are responsible” – speaking volumes of the company’s commitment to reducing its impact on the environment.

This year alone has witnessed the installation of a biomass boiler at J&J’s Centocor Biologics ogics lab in Ireland for hot water and heating and a zero-discharge wastewater treatment facility in n Northern India that ensures every drop of treated water is reused for irrigation and drainage.

However, despite all this good work, rk, Johnson & Johnson wants to make sure it doesn’t overstate its efforts. To ensure it doesn’t, it adheres to the following manntras. First of all, don’t say you’re something g you’re not: products can be ‘greener’ r’ but cannot always be 100 percent green n because of the nature of consumer prodducts – so don’t pretend to be. Secondly, be specific: Use a lifecycle analysis to know w the exact sustainability measures of your ur product. Provide your consumers with real eal numbers that inform and empower them. em.

Finally, transparency: Partner with NGOs that can hold your products accountable and d add credibility to your business.

some teenagers are starting to take it upon themselves to fi nd a place for these unwanted drugs – by bringing them to parties, mixing them into a bowl and dealing with the consequences. In addition to reducing waste, reducing the danger to people is just as important to Gilmore Hall; with greener options come less danger for all concerned.

Difficult choices “There are no good answers around pharmaceuticals,” she says. “We need to think about their design and what we can do to make them greener. That’s important. One of the issues from a manufacturing point of view is that they want as many preservatives in a drug as possible so it has a longer shelf life. I understand that. It makes good business sense to me. The problem is that when I take that drug and it’s excreted from my body into the water, the chemical that gives it a longer shelf life will also preserve it in the water.

“It’s a complicated situation that we’re dealing with and I think the real issues around pharmaceuticals are prescribing practices, take-back programs, working with the manufacturers around designing drugs a little differently and working with the insurance companies to see if there are better ways that we can dispense drugs in a way that’s still helpful, doesn’t waste money, and obviously makes sure that patients are getting the pharmaceuticals that they need.

“We have a few colleagues in Stockholm City Council who have already developed a database that is available to physicians and nurses who have prescribing practices that list all the drugs, patient outcomes, side effects and impact on the environment. If I’m a physician and want to pres scribe an antibiotic for someone, and I can choose between o that has a lesser environmental impact but the same one p patient outcome as another drug, I can choose to prescribe t one that has the least environmental impact. Figuring the o a way that we can get that kind of information out to out h healthcare providers in a more systematic way is also a g good way to start to address some of these issues.”

And with carbon footprints gaining more of the s spotlight in today’s society, addressing such issues cannot c come soon enough. For the large majority of hospitals, t this will mean a serious re-assessment of their waste management m and greener purchasing options in order to ensure e that the future of their hospital is set up to aid not only o its patients, but also its environment.

Fortunately, there are already the clever few who have t taken the green ethos to heart and have not only adapted a accordingly, but have noted dramatic differences in doing s it is they who have set the standards for the rest to so; f follow.

Until then, it’s a case of pushing the message of via ability and necessity and putting trust in those who make t decisions. the

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BUSINESS

Casting a wider net As the challenge of sustaining innovation becomes more of an issue within the industry, Eli Lilly and Company has decided to open up and create the framework to support a more distributed, networkbased operation. Robert Armstrong talks to Nick Pryke.

T

he modern pharmaceutical industry has been pushing the boundaries of drug discovery for decades through effective and sympathetic collaborations. Indeed, even before society’s introduction to this modern-day, multi-billion dollar industry, scientists and apothecaries had been doing exactly the same behind closed doors with a fundamental goal no different from their modern-day counterparts: to create and provide medicine.

Yet today’s market is witness to the drying up of pipelines and rising costs that have left some companies with their backs against the wall, desperately in need of new innovation and cutting-edge solutions. A pioneer in understanding this new perspective is Lilly, an innovation-driven company that has remained on the leading edge of executing partnership programs since it introduced the first commercially available insulin to the world back in 1923, with the help of Professors Fredrick Banting and Charles Best.

Lilly has come a long way since then, and the start of 2007 saw it announce a new strategy that would help it evolve into a more distributed operation, working with partners in all areas of the business. With mere outsourcing no longer sufficient, Lilly went from being a fully integrated pharmaceutical company (FIPCO) to becoming a fully integrated pharmaceutical network (FIPNet). With his finger directly

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on the pulse, Robert Armstrong, VP of Global External R&D at Lilly, knows what this could mean for the future of the company and for the pharmaceutical industry as a whole.

With the word ‘future’ rolling across pharmaceutical lips worldwide, companies are starting to realize that the onesize-fits-all approach of traditional innovation cannot succeed in the current climate, leaving many looking to carve their own innovation paths. “You see most pharmaceutical companies having specific strategies around addressing the overall arching quest for increased innovations,” explains Armstrong.

From our point of view, we have been very successful at accessing external innovation as part of our history, and we have a large number of innovative potential medicines that, in addition to resulting from our internal pipeline, are the result of collaborations with both academic groups as well as biotechs and other pharmaceutical companies.

“Where we’re really seeing an opportunity to change the face of innovation around the globe is through a growing network of innovators who are testing new models; we’re participating in a very focused way on how to act on these external innovations in ways we did not before. We’ll continue to look at opportunities traditionally, but have also augmented that quite dramatically with a large number of dif-

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ferent types of interactions externally – that’s essentially the framework of what we refer to as our FIPNet strategy.”

Looking out Pre-2000, Lilly functioned as a FIPCO, the traditional pharmaceutical model in which Lilly was involved in every component of the value chain from hypothesis generation to marketing products. Unfortunately, the substantial investment and infrastructure to sustain this approach was based more on historical precedent and limited the flexibility to opportunistically transform the way innovation occurred.

“We renamed our strategy in the framework of FIPNet, with the concept being that we no longer have to own every single component from beginning to end, and that we might be able to amplify and increase our innovations by being far more savvy and strategic about what talent and innovation we can access that complements and makes us better than we would otherwise have been. We’re very comfortable in knowing what we needed to do to sustain a standard of innovation that was coming out of our own labs as well as things that we were accessing externally.”

Armstrong defines three levels within the FIPNet as a company-wide framework by which both local management and portfolio management groups can think about this concept simultaneously and intertwine it into the entire portfolio execution. In level one, FIPNets deal with the more traditional outsourcing components where they have effectively empowered the function and technical expertise in support of the global portfolio to basically establish strategic relationships with external partners, where a fair amount of the work that can be done efficiently across the globe. This has allowed middle managers to be able to make decisions, recommendations and run pilots effectively to allow them to become more entrepreneurial about how to make themselves more efficient.

“Level two is molecule based and dramatically different from level one in as much as now all the functions touch the molecule,” Armstrong says. “The complexity of support of that in the network is substantially greater than it would be at level one, but nonetheless we see it as a huge opportunity to access external innovation and new innovative funding models to access development groups that are going to become substantive contributors to innovation – either in academia, biotech or other research centers.

“Level three ultimately deals with equity investments in new innovative interests. We have a corporate ventures group and what we refer to as a ‘mirror portfolio’ that we’re currently developing that’s extremely new in innovation terms, working with both external and internal partners to create and obtain other avenues for molecule developments.

Understanding Armstrong is quick to point out that all three levels are offered concurrently to afford every employee a specific un-

derstanding of how it plugs into their work; if this were overlooked, more than likely Lilly would end up with a moniker called FIPNet that only a few, essential staff would be able to comprehend. It was therefore pivotal for Lilly that everybody was able to align themselves with the new strategy and, while it’s a bit premature to predict which areas will be affected the most, Armstrong is confident that it will conjure a positive movement across the board.

“We’re constantly monitoring, evaluating and surveying the growth for interesting opportunities to entertain where we present ourselves to these potential future partners.

I think emerging markets will affect components of areas of opportunities that we are currently pursuing actively in this network environment, but I wouldn’t restrain it to that as I think there are many other areas. The FIPNet evolved out of individual piloting activities in the early 2000s that led to a substantial critical mass that then allowed us to have the confidence that this is the direction we wanted to go in.

“This network concept gives you a lot of latitude to strategically direct from the company; you can rely very heavily on our internal expertise in certain areas while relying just as heavily on external expertise in other areas” “Part of the reason we waited was to ensure that the external world was sufficiently mature for us to feel confident, so again we anticipated that there would be many new, exciting things happening around the globe and we feel that we’re poised to jump on opportunities that might come up with time.”

With an almost living, breathing network evolving in front of their eyes, Lilly needs to ensure that their security measures are second to none and viable on all levels. As this is the case, it’s only logical that security issues are also implemented on multiple levels. “We would begin with ensuring thorough diligence of potential partners, which would allow us to evaluate the kind of maturity and confidence in which we could initiate an interaction,” continues Armstrong. “The second thing we have is a proactive and focused group of individuals within the company that have become, for lack of a better word, FIPNet experts; they have plenty of experience working with external collaborators, so we actively put them front and center into the initiation of all our collaborators.

“This network concept gives you a lot of latitude to strategically direct from the company; you can rely very heavily on our internal expertise in certain areas while relying just as heavily on external expertise in other areas. For example, one of the groups that I can highlight, called Chorus,

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consists of 29 very experienced medical and technical minds who have been developing Lilly molecules and will soon begin on developing non-Lilly molecules. They’ve been able to achieve efficiencies and speed that are far better than the industry average by focusing on a “Lean to Proof of Concept” development archetype and relying heavily on a network of service providers, centers of excellence and internal and external experts to design and carry out the clinical trials specific to each of the individual aspects.”

The Chorus group that Armstrong talks of has witnessed solid success since its inception, but he is quick to assert that the group will avoid growing in size as a result of its success and instead should be ‘cloned’ to ensure that the group retains its high levels of efficiency. Undoubtedly, opportunistic experimentation in many of these areas will continue to make sure they keep hitting the two molecules per year per two employees in the development stage of each specific molecule.

“The stress of continuing to sustain the innovation and expectation that we have going forward is creating lots of creative solutions to a historical industry that perhaps was not as rapid to adapt to opportunities that came forward. I feel that Lilly is leading in this phase and that the FIPNet has been effective as a working tool to allow our scientists and business folk to think about more globally while removing the historical boundaries on how we think of ourselves as a company.”

To analogize the potential of the FIPNet, Armstrong cleverly equates it to the iPhone ‘apps’ phenomenon and asks – “What did they really create?” They created a framework for creative people with ideas that Apple would never have been able to think of on its own, and let them innovate. In its simplest form, the FIPNet is no different: it provides a framework that allows ideas to slot in logically and non-disruptively as the entire strategy continuously evolves in the context of innovation.

What remains once the scaffolding has been removed and the dust clouds have blown away is precisely what Armstrong describes: a framework that not only invites innovation, not only encourages innovation, but allows a vacuum of freedom to be exploited by open, reciprocal channels that give those creative minds the expertise, knowledge base and tools needed to bring innovation to the table. Just as the iPhone changed the pace of mobile technology in recent years, hindsight could prove the same for FIPNets and the pharmaceutical industry in the years to come. ■ Robert Armstrong, PhD, became VP of Global External Research and Development for Eli Lilly and Company in November 2006, after previously employing the role of VP for Discovery Chemistry Research.

Prior to joining Lilly in 1999, Armstrong had been Director and Head of small molecule drug discovery at Amgen, Inc. His research efforts have concentrated on the areas of total synthesis of natural products, development of synthetic methodology, and synthesis and conformational analysis of natural and synthetic polymers.

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FIPNet Q&A with Tim Garnett, CMO and SVP, Lilly’s Center of Excellence Please tell us about the current face of innovation in the pharmaceutical industry and how that is affecting conditions in the pipeline.

Tim Garnett. We are all well aware of the significant challenges facing the pharmaceutical industry, including patent cliffs, a slower regulatory approval process, and rising expectations and requirements from payers and regulators. And yet there is tremendous opportunity because many diseases remain unconquered and there is room for improvement in diseases for which treatments exist.

Our strategy is to create value by accelerating the flow of innovative new medicines that provide improved outcomes for individual patients. To take advantage of this opportunity, we must substantially increase our productivity and rise to meet the significant challenges that we face. We currently have nearly 70 potential new medicines in our pipeline – the largest in Lilly’s 135-year history – and our goal is to begin launching at least two new medicines a year beginning in 2013. We believe that innovation is key to the future, but it doesn’t just mean a new molecule or mechanism of action: it can also mean innovative clinical trial design or analysis.”

Your new operating model, the DCoE, was launched last September. Has it lived up to Lilly’s expectations and how will it function within the new FIPNet? TG. It is still early days, of course, and the full benefits of the DCoE will be apparent with time.

However, we have already seen early successes with, for example, our advanced analytics group and the expertise it has brought to our clinical trial designs and analysis. We will heavily leverage FIPNet within the DCoE to take full advantage of the expertise and efficiencies that exist outside Lilly's walls, so our commitment to FIPNet is unchanged and will indeed expand as the DCoE develops.

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COMPLIANCE

Beware the Bribery Act Strategies pharmaceutical companies worldwide will need to take to avoid criminal liability. By Tony Lewis and Alison Dennis

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harmaceutical companies with activities in the US and in other countries around the world are – or ought to be – aware of the US Foreign Corrupt Practices Act (FCPA); indeed, some very substantial fi nes have been handed out to pharmaceutical companies found to be operating in breach of the FCPA. However, the UK Bribery Act 2010 (the Act), which became law in April 2010 and is expected to come into force on October 1, 2010, has the potential to go even further than the FCPA in the activities which might be found to breach its terms.

Coupled with the recent appetite shown by the UK’s Serious Fraud Office (SFO) to pursue executives caught up in bribery, reaching through to capture activities of middle management, there are real reasons for pharmaceutical companies to look closely at the

detail of the Act and at whether their current compliance policies are adequate enough to keep this new ogre at bay.

The jurisdiction of the Act is wide. Its net will be thrown not only over companies that are incorporated in the UK, but also any companies that carry on a business there. What constitutes ‘carrying on a business’ in the UK has not yet been tested, but it could be a low threshold, perhaps requiring as little as a single sales agent or representative in the UK. This means that companies with any reach into the country should be aware of its scope.

The corporate offence under the Act will also apply to any act of bribery wherever it takes place in the world. The Act therefore raises the specter of prosecution in the UK of a non-UK based company for bribery that takes place wholly outside the UK, even if that company has the weakest business link to the UK.

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In the spotlight Active bribery occurs if, directly or indirectly, an individual or company offers, promises or gives an advantage to another, intending to induce that other person to do something improper or to reward them for behaving improperly. The key elements are that there must be a fi nancial or other advantage linked to improper performance of a relevant function or activity. Financial or other advantage is not defi ned in the Act but it will include anything of value. Clearly there is no need for money to change hands for an offence to be committed.

It also constitutes bribery if someone directly or indirectly offers, promises or gives a fi nancial advantage to another person and he or she knows or believes that the acceptance of the advantage would itself constitute improper performance of a relevant function or activity.

The Act defi nes relevant functions or activities to include any function of a public nature, any activity connected with a business, trade or profession, any activity performed in the course of a person’s employment and any activity performed by or on behalf of a body of persons, whether corporate or unincorporated. Essentially, all activities performed in a business context – whether in the public or private sector – will be caught. Th is goes very much further than the FCPA, which applies only to a limited population, namely foreign public officials.

However, not every defective performance of one of these functions for financial advantage engages the law of bribery. There must be an expectation that the functions are to be carried out in good faith, impartially, or the person performing it must be in a position of trust.

Improper performance is then defined as performance that breaches that expectation or that trust. In order to ensure that the offence still bites where bribes are paid in jurisdictions where it is culturally acceptable to do so, the Act imposes a UK standard of ‘expectation’. Accordingly, UK standards of behavior are imported into the determination of improper performance for the purposes of establishing liability.

In addition to the active bribery offence, an individual or entity in receipt of a bribe will also be guilty of an offence of passive bribery. The passive bribery offence is essentially a mirror image of the active offence and requires the same constituent elements,

namely a fi nancial or other advantage and improper performance of a function or activity. For example, a recipient in the UK who is bound by the GMC code on good medical practice will arguably commit an offence by accepting hospitality breaching that code, even if the hospitality is outside the UK and even if the recipient is unaware that he or she has breached the code.

“The most controversial area of the Act is a new corporate offence of failing to prevent bribery” The foreign bribe Like the FCPA, the Act includes a specific offence of bribery of a foreign public official.

To be guilty of an offence under this section, the giver of the bribe must intend to influence the recipient acting in his capacity as a foreign public official and must intend to obtain or retain a business advantage. The offence is not committed if the law applicable to the foreign public official permits the payment, but the law has to be written and custom will not suffice. In addition, unlike the FCPA, there is no carve-out for facilitation payments. Th is is a strict liability offence that puts the onus fi rmly on the individual or entity making any payment, however small, to ensure that it is legitimate.

Pharmaceutical companies that are reliant on foreign governments to allow their products to be trialed, imported into, promoted, sold and used in a country will want to be aware of this in their dealings with anyone who may constitute a foreign public official – including regulatory authorities, ethics committees and hospitals. As ‘custom’ is no defence, there may be no substitute for obtaining a local legal opinion as to what payments are permitted by the local written law in order to ensure that an offence is not inadvertently committed. When considering the penalty for this offence, and the other offences in the Act, up to 10 years imprisonment for an individual and an unlimited fi ne for companies can be expected.

Prevention failure The most controversial area of the Act is a new corporate offence of failing to prevent bribery. This is a seismic shift in the law. Under existing bribery laws, it was exceedingly difficult to convict a commercial organization under corporate criminal liability principles. The fault element of the offence had to be attributable to someone who was, at the relevant time, the ‘directing mind and will’ of the company.

However, under the Act an offence will be committed by a commercial organization for one of two reasons. The first will occur if a person performing services for the commercial organization bribes another person by way of active bribery or bribery of a foreign public official.

The second will prevail if the bribe is in connection with the commercial organization’s business; in order to successfully launch a defence against such a charge, the commercial organization will have to show that it had in place ‘adequate procedures’ designed to prevent bribery being committed on its behalf. The extra territoriality of the offence is particularly worrisome. An offence is committed irrespective of whether it takes place in the UK or abroad. If an agent, for example in the Middle East, made payments styled as ‘professional education’ to a healthcare professional in the Middle East, the agent’s principal could potentially fall foul of the provisions if it could be shown that it did not have adequate procedures in place to prevent such a payment being made. The penalty for the corporate offence is an unlimited fi ne.

Under the second limb of this offence, liability will arise from the activity of those ‘performing services’ that may be outside the practical control of the commercial organization. The Act stipulates that the capacity in which a person is performing services does not matter. The person may be an employee, agent or subsidiary, but these are just examples.

There is a presumption that an employee will be performing services, but beyond that the Act makes it clear that the issue will be determined by reference to all the relevant circumstances and not merely the nature of the relationship with the company.

It will not be possible to identify any particular class and determine in advance whether that class will be deemed to be performing services or not. Consequently, the position will

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need to be considered on a case-by-case basis, and clearly has the potential to include the activities of third parties whose activities the pharmaceutical company does not control on a daily basis.

Adequate procedures It is likely that in order to demonstrate adequate procedures, a commercial organization will need to provide a variety of procedures. First of all, it must provide evidence that it has an anti-corruption culture across the whole business, supported from the top, and that it has assessed the risk areas on its business and reflected them in its approach.

It also has to show that is has a written anti-corruption policy in place that has been disseminated across its business and is understood. Finally, it has to highlight its use of due diligence in relationships with third parties and defi nitively show it has systems in place to monitor compliance.

Clearly a one-size-fits-all approach will not suffice. Different businesses will be faced with different risk profiles, and will have to tailor their approaches accordingly. For pharmaceutical companies there would appear to a number of factors that put many into a high-risk category. First, companies are often selling into countries that are known to be susceptible to corruption. Secondly, the nature of the market means that companies frequently interface with foreign public officials. Thirdly, there is the constant use of agents, whose activities will be imputed to their principal for the purposes of

any fi nancial or other advantage can trigger liability if it’s linked to improper performance. There is a danger that, if the Code does not mirror what would objectively be considered as improper under the Act, that compliance with the Code could trigger criminal liability.

Guidance from the UK government on the interaction between industry codes and the Bribery Act would be helpful. Companies that also need to be compliant with the FCPA will face the additional burden of reconciling the requirements of the Act and the requirements of the FCPA. An obvious conflict is that the FCPA expressly carves out ‘facilitation’ payments; the Act does not. Pharmaceutical companies with activities potentially caught by both pieces of legislation are likely to have to review their compliance codes with this in mind.

Self-reporting The SFO have indicated that while having procedures in place is key to any decision to prosecute, they will also be greatly influenced by whether the alleged bribery comes to their attention as a result of self-reporting rather than as a result of an investigation initiated by the SFO. The incentive to self-report is the prospect of being dealt with more leniently – the SFO

“It is essential that pharmaceutical companies take steps now to review current compliance codes to meet the more stringent requirements” the Act. Finally, the market is unusual in that those who assist in development may also be customers of the end product, thereby greatly increasing the scope for corruption.

Consideration will also need to be given to the interface between procedures that are put in place for the purposes of the Act and any existing codes or guidance. In particular, pharmaceutical companies that adhere to the ABPI Code will be faced with reconciling that Code with the provisions of the Act. Unlike the Code, the Act has no de minimis approach;

says that it will resolve such cases through a civil settlement wherever possible. A civil settlement also avoids the prospect of a ban from public procurement in the EU, which would follow from a criminal conviction for bribery.

The SFO’s civil strategy initially met with success, with a number of self-reporters, notably Amec and Balfour Beatty, agreeing to civil penalties. In more serious cases, where

the SFO considered a criminal conviction was required, it also began to develop US style plea bargains, agreeing the penalty as part of a criminal settlement.

Initially successful, it has now come unstuck as a result of judgments in the criminal and appellate courts in the cases of Innospec and dePuy. In the Innospec case, a plea agreement was reached with the US and UK authorities.

The settlement involved a guilty plea by Innospec of conspiracy to corrupt and payments of $40 million in fi nes to the US and UK authorities. The settlement was subject to court approval. Lord Justice Thomas reluctantly approved the settlement terms but emphasised that “the SFO had no power to enter into the arrangements made and no such arrangements should be made again” and that “the SFO cannot enter into an agreement with an offender as to the penalty in respect of the offence charged”.

The Court of Appeal affi rmed this in considering the dePuy case. In that case, despite Mr. Dougall being a middle manager at dePuy who cooperated fully with the SFO, the court declined to endorse the 12-month suspended prison sentence agreed by the SFO. Although his sentence was reduced on appeal, management of pharmaceutical companies still need to become savvy to the fact that assisting authorities in the UK will not necessarily reduce a prison sentence imposed under the Act. The message is clear: With the expected October 2010 implementation date for the offences under the Bribery Act on the one hand, and the limited scope of the prosecuting authorities for leniency on the other, it is essential that pharmaceutical companies take steps now to review current compliance codes to meet the more stringent requirements and to ensure that they have adequate procedures in place to reduce their risk of being caught in the far reaching jaws of the Act.

Tony Lewis is Head of the Fraud & Anti-Corruption Group, and Alison Dennis is Head of the Life Sciences Group, at Field Fisher Waterhouse LLP. Email: tony.lewis@ffw.com and alison.dennis@ffw.com

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OPERATIONAL EXCELLENCE

Jumping the regulatory hurdles

NGP talks to Nycomed’ s Barthold Piening about the challenges of ensuring compliance and operational excellence in the pharmaceutical supply chain.

We hear a lot about the impact of increased regulatory hurdles on the industry. Is this something that is affecting the manufacturing side?

Barthold Piening. This is something which keeps us pretty busy. It’s not just a problem with higher regulatory requirements coming from the FDA. We comply with the FDA guidelines – this is not our major challenge. The challenge is that, where we operate a lot with the focus on emerging markets, but in Europe and the United States as well, we have to cover all the different regulatory requirements in the world, and this gets increasingly complex. It is a little bit disappointing that I do not see a trend to harmonization between the FDA and EMEA, and then all the emerging markets are coming up with their specific requirements.

And you have to cover them all. In markets like China and Russia, in my understanding, they have a little different perspective of regulatory requirements compared to the standard FDA regulations, and this lack of harmonisation makes our life complicated in order to satisfy all wishes of the world.

It’ s a challenge, and my conclusion is it gets more and more difficult to have just one standardized system – one size doesn’t fit all. Each country has a different focus, which we have to comply with.

What are the specific advantages and challenges of implementing an operational excellence program in the manufacturing supply chain?

BP. We started our operational excellence program approximately two years ago in the conceptual phase, and we are now in the implementation phase, so we have gathered some experience of the first project implemented.

The main advantage is that you can involve and motivate more or less all employees. It’s not only an initiative for special

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projects at the management level; there is a huge potential for improvement across the whole organization. The key is to ensure our employees contribute to this process.

We have invested a lot in the training and personal development of shop floor employees, and this was regarded as a major benefit for individual employees. We have now touched roughly 10 percent of our workforce, which is a lot, with education and training programs to get into operational excellence. We are starting now to see the fruits and to harvest from this campaign.

I would say the major barrier is not motivating shop floor employees, it’s more to get management support and buy-in. People are so occupied with how they did it in the past, and readiness to change is sometimes tougher to achieve in management than on the shop floor level. We have seen fantastic enthusiasm on the shop floor, where people are happy to get additional training, and then to apply what they have learned in real life projects immediately. This is perceived very positively.

In your organisation, you called your program ‘operational excellence’. Does that mean you’ re not using elements of Lean Six Sigma?

BP. We have decided not to use only one Lean methodology.

We are flexible. We apply Six Sigma; we apply Lean Six Sigma. We apply continuous improvement and 5-S Quality Management wherever it is feasible.

We don’t want to apply just one tool. There must be a common understanding, and this we call operational excellence, and we give a variety of different tools to the teams, and whatever is appropriate, they can apply. n Barthold Piening is Executive Vice President of Operations for Nycomed.

“We apply Six Sigma; we apply Lean Six Sigma.

We apply continuous improvement and 5-S Quality Management wherever it is feasible”

ASK THE EXPERT

Meeting increased reporting requirements How to address the issue of increasingly complex operational and compliance challenges.

By Zach Henderson

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n the face of existing legislation that varies by state, ing’ as the soft ware is able to link identifiers within the data pharmaceutical, biotech and medical device compamart of the soft ware to the same identifiers on the incoming nies are required to provide aggregate spend reportrecord; this is markedly different from ‘matching’, which is ing of their promotional, grant and consulting spend an algorithmic and/or probabalistic exercise whereby mulper practitioner and/or per facility. tiple data attributes from both the customer master and the The challenges of meeting these requirements cerincoming expense record are compared and the best HCP/ tainly are complex, especially now that we have ‘let the HCO ‘match’ is determined). sunshine in’ across all 50 states as part of healthcare Th is process can simply be sending an exception fi le reform. Not only did this add a layer of complexity to the at the end of the day to a data matching vendor and receivexisting laws from multiple states and the District of Coing the matched results back the next day for import into lumbia, but it also extended scope with the inclusion of the aggregate spend system. Regardless of the approach, medical device manufacturers. We fi nd many clients are establishing an automated process for this is critical as “Choosing facing several common challenges that are the most difthe manufacturer cannot rely on the data management approaches ficult to solve and often have broader implications beyond capabilities of a vast number of vendors feeding their agthe compliance office. with the highest gregate spend system. Beyond this automated matching, a Lack of a customer master. At the core of many opermanufacturer should also invest in a manual matching prodegree of ational and compliance challenges rests the HCP/HCO cess and a resubmission process with their spend vendors flexibility is customer master. Part of the issue is definitional: a should records ultimately be unmatched. crucial to longcustomer master for compliance purposes is not simply Buyer beware. There are numerous solutions (comprised a list of called-on doctors, nor a list of prescribers’ marof components such as aggregate spend soft ware, customer term success” keting targets. It refers to all healthcare professionals master, HCP/HCO matching, full and partial MDM) avail(even those non-prescribers) and healthcare organizaable in the marketplace and many possess seemingly the tions. Not typically handled in the normal course of the same processes and features. It often becomes overwhelmcommercial enterprise, this broader requirement forces ing and we have seen clients choose solutions purporting to the collection, distribution and reporting of spend on have holistic capabilities only to be disappointed during the ancillary professionals, such as office managers, front implementation. desk staff, etc.

Do more than check the box during the evaluation To address this issue, we typically create and maintain auxiliary phase, as our experience suggests clients end up investing significant master fi les used within our compliance solutions. Also, the creation unplanned dollars and time to truly meet the compliance requirements. of an enterprise customer master is not possible given the many touch Th is is one reason why we published an ebook on our website that propoints and time required to fully implement enterprise MDM. Because vides clients guidance on evaluating and selecting a solution provider of this, we frequently help our clients create a compliance-centric master to address the complete aggregate spend challenge (i.e. not just the softfi le that includes the necessary HCPs and HCOs. This approach meets ware). It outlines the myriad areas to investigate and many of the quesclients’ compliance requirements, and importantly, provides a starting tions that should be asked in an RFI/RFP. point for a broader deployment of an MDM solution, quite valuable As the laws continue to evolve, as does the interpretation of them, beyond compliance. we as an industry can only expect more complexity, not less. To this end, Lack of a secondary process to reconcile unmatched spend records. choosing approaches with the highest degree of flexibility is crucial to The best customer master fi les in the industry do not allow 100 percent long-term success. match rates for incoming expense records. Therefore, to be fully compliZach Henderson joined Health Market Science (HMS) in 2007, initially as Vice President ant, clients require a secondary process that enables them or their proof Marketing and Product Development, where he successfully expanded the company’s portfolio of offerings, launching 12 products in two years. Today as Vice President, vider to do more advanced matching than that which typically occurs in Corporate Strategy and Analytics, he leads the creation of HMS’s strategic plan, M&A and strategic alliance building, and leads the company’s advanced analytics business unit. aggregate spend soft ware solutions (we would term the function ‘link-

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COMMENT

A NEW ORBIT FOR INNOVATION How a shifting business environment will affect brand promotion in the pharmaceutical space. By John Singer

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t General Mills, the Minneapolis-based packaged goods giant whose brands include category-leading cereals like Wheaties (discovered by accident in the 1920s after a health clinician spilled bran gruel on a hot stove) and baking products like Bisquick (a formula developed after a conversation on a train between a General Mills salesman and a chef in 1931), positioning themselves to meet consumer nutrition needs is viewed as a form of strategic competition. They want to combine profitability and consumer health, and see their corporate purpose – the rationale of the business – as “nourishing people’s lives”. The company says its three areas of priority are weight management, heart health and what it calls “proactive health”.

From the perspective of a consumer, though, General Mills and its products are pieces in an otherwise complex system of health information pushed and pulled from an infi nite number of sources.

The promotional campaign for Cheerios, as an example, prominently features its claim to lower cholesterol.

The brand’s media plan includes placement in commercial breaks in the network news, the same spot favored by the pharmaceutical industry for its DTC advertising, including for drugs to lower cholesterol, like Lipitor. The ads are often adjacent to each other. Th rown into the same commercial break may be advertising for a vitamin to lower cholesterol (Centrum), a trailer for The Biggest Loser (the popular weight-loss reality show from NBC), and possibly parts of a new media campaign by a national fitness club, such as Bally Total Fitness.

To analyze high volume retail data, brand managers on Cheerios will use a technology vendor specializing in business intelligence, perhaps Fair Isaac, which is also headquartered in Minneapolis. Back in New York where Pfi zer is based, the Lipitor brand team, under extreme performance pressure to squeeze as much top-line growth as possible from the drug before it loses patent protection, will be trying to ‘optimize’ its promotional mix by using a data vendor offering a service to track prescription change in real

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time. (Th is capability makes sense for an industry tightly grooved into a commercial model based on drug promotion.) Neither the Cheerios nor Lipitor brand teams, however, are taking advantage of interaction leverage: the opportunity for new insights by trading experience about the behavior of consumers with high cholesterol, and new performance from collective action.

Broader context General Mills and Pfizer obviously share marketspace; by extension, so do their vendors, who are also looking for new ways to grow. Bally Total Fitness certainly conforms to the idea of a business in the service of ‘proactive health’. But the broader context to reducing risk of cardiovascular disease includes big integrated delivery networks – Sutter Health in San Francisco, for example, which owns more than 20 hospitals and receives 25 percent of all hospital admissions in the Bay Area – and insurers like BlueCross/BlueShield, all pushing their own solutions and pieces of health information for consumer attention.

The blow-up-your-brain fragmentation continues when advocacy groups and public health components, whose programs for disease awareness and better outcomes (which largely resemble those already being marketed by drug companies, insurers and providers) are factored in to the equation. And lest we forget, a digital overlay from the internet is woven into this fabric.

There is no coherent whole to any of this. Ultimately, no one really knows what is happening in the marketplace or why; prediction is im-

possible, strategic shock is routine. Consumers are opting out in ever greater numbers as the socialization of marketing resistance deepens.

And what we knew yesterday, either as employees or in terms of what institutions think they know about their business, is proving less and less helpful to reverse degrading trends. Even the premise of strategy itself is under review, as many enterprises and management teams thoroughly dosed in the discipline have failed to anticipate or address systemic performance declines. Driven to the wall, people are scrambling to fi nd ideas for growth and new value propositions.

Anatomy is destiny The conversation about innovation in the pharmaceutical industry reflects how the industry views its purpose. For the most part, drug companies have not changed their strategic behavior since the sector took shape in the late 19th and early 20th centuries. It operates now as it did then: with an industrial age commercial model, one based on an experience curve about how best to engage in scientific discovery, and then win regulatory approval to promote the features and benefits of drugs.

The center of gravity of economic value is knowledge about how to market drug brands. New technologies (e-detailing, for example, or social media) are grafted on to this industrial model so that it can be executed more efficiently. Competition is understood at the technical level and defined by the product, innovation is equated with technology. The most important customer is actually the shareholder. All the while continual, relentless cost cutting goes unabated.

Effective change begins by changing the story we tell ourselves about reality. The deep functional expertise that pharmaceutical companies have used to organize themselves around making and selling drugs is reaching its productivity frontier. A different lens is needed to see new ideas – incremental ideas and big game-changing ones – that emerge by participating in new forms of interaction with the marketplace, and from tapping wider flows of knowledge, particularly from players on the edge of what would be considered normal industry boundaries.

Th is, in fact, is the approach to spur innovation that Google and Procter & Gamble took last year. They began swapping employees to participate in each other’s training programs and to hammer out business plans together. Novel linkages produce novel insights.

The internet provides entry to the biggest brain in the world, making specialized knowledge a commodity input to anybody with the time, literacy and access fee. Against this backdrop, open innovation – tapping into the creative commons and unrestricted flows of data – is an emerging trend. General Mills provides another good example of how to work with this structural shift in the marketplace. Using the term ‘Connected In-

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novation’ to frame its philosophy, the company has secured a privileged position in relevant concentrations of knowledge flows, treating the flow itself as the central opportunity to shape new growth platforms.

Its program (G-WIN) is all about making new linkages with suppliers, other food companies, or companies in entirely different industries. The business rationale for the sixth largest food company in the world is shift ing from scalable efficiency to scalable learning: the ability to experiment more rapidly and to learn faster by mobilizing a large ecosystem of players around creative collaboration. The social periphery is seen not as a target, but as a resources for design.

Ultimately, these linkages have the potential to form ‘collaboration curves’ that can reshape the terms of competition in markets, industries and even economic sectors. When UnitedHealthcare, one of the largest insurers in the nation, announced in April that they are connecting with Walgreens and the YMCA to change the approach to diabetes prevention, they in effect executed a shaping strategy to create a new system of health.

Depending on how participants are added to this new system and its longer-term vision, UnitedHealthcare has positioned itself to shift multiple markets simultaneously, while creating new information about reducing the burden of a disease projected to affect more than 360 million people worldwide by 2030. Said differently, by focusing on a new way of interfacing with the environment, they have expanded the opportunity for creativity.

The incentive to innovate in the pharmaceutical industry goes beyond the domain of product and near-term margin deterioration.

After more than a decade of carpet-bombing the marketplace with consumer promotion and armies of sales representatives, the entire concept of value needs a new argument. Without this changed trajectory, the industry risks becoming marginalized as a utility. Prospects for market power and premium pricing – objectives for value innovation, something most pharmaceutical companies, marketing services and data suppliers are struggling with – will happen when the operating environment is approached with different kinds of ideas, when ideas are co-produced with the environment, and when the industry organizes itself around a purpose to improve health outcomes.

Th ink risk factor alignment through market alignment: Merck and Clorox linked to design a new standard of care in respiratory health, or Roche and Dole Foods collaborating to design a new system of health for diabetes (which itself could be added to the new industry ecosystem just created by UnitedHealthcare).

A new grammar for strategy The context for strategy has changed. Nearly everyone – industries, governments, institutions and individuals – is trying to figure out how to deal with a global economic system whose main features are complexity and high-velocity evolution. It produces more upheaval, and at blistering hot pace, than any one business or government can respond to effectively. Normal is part of the past. Yet many business leaders are still playing by the old rules, even though traditional management approaches (i.e., the experience curve) yield decreasing returns for all but a handful of companies.

When there is a deep structural shift in the ability to receive, utilize,

store, transform and transmit information, the external world changes at a pace far greater than the rate at which our internal model evolves.

Nothing behaves as we think it should: one plus one can sometimes equal oranges. At the heart of that dissonance and stress is paradox. The more powerful and entrenched our internal model of reality, the more difficult it is to perceive and understand the fundamental nature of the changing world we experience. Yet without such perception, it is extremely dif-

“Nothing behaves as we think it should: one plus one can sometimes equal oranges” ficult to understand and change our internal model of reality.

The fundamental process of leadership is that of interpreting a (continuously evolving) context, formulating notions of identity and direction, deriving a set of ‘dominating ideas’ from the new context, and then translating these ideas into action. Language, with all its nuances, is the primary tool with which to shape ideas in our minds, describe them to others, and reach agreement. But its use is complicated by the fact that every word uttered or written is conditioned in the mind of the originator by one set of beliefs, emotions, expectations and experiences, and conditioned in the mind of the recipient by quite another.

Every social system, as well as every individual or group, has its particular language, which is both structured by and structures the reality that is seen. So at one level, we coordinate our behavior through language.

But if we begin examining how we communicate, how we use words to describe and evoke, we can begin to set the stage for the emergence of new meaning, new reality and new coordinated behavior.

If you believe that culture itself is journeying through to a new time, that we are all at a very early stage in transitioning to an entirely new era, then you must also believe that clinging to best practice from more stable times is no guide for future action. A whole new taxonomy is needed, not for its own sake, but to unlock ‘next practice’ organizational concepts that have the greatest power to solve performance challenges. Th is will happen when people separate themselves semantically from the restrictive legacy of language used to describe conventional approaches. The tightly bound company should no longer be the core of deliberation for strategy.

The road ahead for the pharmaceutical industry is not likely to continue directly from the one behind. Navigating the wilder shores of this chaotic new world means dealing with information in a whole new way.

Strategic advantage will go to those who can tap new kinds of insight for creative leadership, are comfortable managing complexity, and can engage with their environments as part of a living business system. Th is means positioning yourself to co-create new health and economic value involving multiple markets, industries or social arenas. Success, in other words, will come from using a new grammar to shape strategy and serendipity at a system level.

John G. Singer is Managing Director, Blue Spoon Consulting, which specializes in ecosystem-centered market strategy. For more information, please visit: www.bluespoonconsulting.com. Blue Spoon does not have a financial relationship with any company mentioned in this article.

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EXECUTIVE INTERVIEW

New commercial models for new market realities Chris Nickum details the five key building blocks for fundamental change.

Given the many challenges facing the pharmaceutical industry today, what does it take to effectively manage commercial activities?

Chris Nickum. Maximizing the efficiency of commercial operations is standard fare for companies operating in a difficult economy and with budget constraints. Yet, because the pharmaceutical world is moving towards heavier commoditization, with 75 to 80 percent of mature markets expected to be undifferentiated by 2015, creating commercial efficiencies is no longer simply about managing costs – it’s about devising a new commercial model (NCM) that better leverages available or yet-tobe-discovered approaches to suit new market realities.

Th is requires fundamental change that ranges anywhere from incremental to substantial.

The good news is that as a very experienced industry addresses these issues, some of the fog is beginning to lift. IMS has been on the forefront in helping the industry defi ne, quantify and address these new challenges.

However, based on IMS research conducted with 500 industry executives, over 90 percent of respondents have not implemented any major, groundbreaking changes to their go-to-market approaches.

How is today’s market different from the recent past?

CN. By 2015, pharmaceutical manufacturers in the mature markets will be pressed to evolve their commercial practices in fundamental ways. Two circumstances will shape both how pharmaceutical manufacturers go to market and what they market. First of all, in just five years the world’s leading pharmaceutical markets will be dominated by products that are largely undifferentiated from their competitors. The degree and timing of commoditization will not be uniform across the mature markets and thus will dictate a country-level approach to model development.

Secondly, robust health economics and outcomes research (HEOR) arguments promoting the cost savings of a new drug are not the only way to measure progress. Varied stakeholders will continue to look to

the industry for improvement in the holistic treatment of disease – improvements that extend beyond the benefits of a chemical compound. Relationships formed in cyberspace between the extended healthcare delivery mechanism and patients will allow companies to better match their treatments, programs and investments to patient needs, driving improved individual outcomes.

In order to thrive within this environment, how can companies transform their commercial operations?

CN. Companies can transform their commercial operations by applying one or more of five key building

“Companies can transform their commercial operations by applying one or more of five key building blocks”

blocks, based on each individual company’s current state and needs. The fi rst is landscape assessments: Understand the market landscape of the future. Companies that have not yet fully determined their future direction should develop a common point of view on how the healthcare environment will change over the short- and long-term. Essential to this is recognizing how power will shift among the stakeholders for a given therapeutic class in a given geography. More precisely, what aspects of demand will be driven by the stakeholder versus the healthcare environment, key market events or other factors.

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Companies are most successful in performing this analysis when they properly plan and fund the collection of information, maintain corporate or best-in-class frameworks across geographies, and execute in parallel with local market resources. To be accurate, the analysis must have full participation from therapeutic and functional experts and across business functions. In most cases, this means a good deal of pre-work, teamwork and execution within each local market.

Second is strategic planning: Articulate the implications for the business. Companies that have already established the commercial context in which they will operate need to assess the timing and importance of various trends and events. At the end of this phase, a company will have a clear idea of how its commercial model is – or is not – prepared to meet the demands of the future. The ideal method of devising a commercial strategy is to hold a series of organized and integrated planning sessions with representatives from all disciplines across the commercial organization.

Conducting smaller meetings between representative disciplines and stakeholders can result in a better solution and a stronger roadmap as the group comes back together. The group should follow a pre-defi ned process that includes reading and reacting to prepared materials and thinking outside the ‘box’ imposed by current roles, capabilities and other organizational barriers.

The third building block is capability assessments.

Support the new strategy. Any change in a company’s commercial strategy also directly affects a wide range of capabilities within the organization. Depending upon the types of changes implemented, companies may need to build or amend their marketing, technical, motivational, knowledge repository, reporting and analytical capabilities, among others.

Rather than tackling drastic, sweeping changes all at once, companies are fi nding it more manageable and ultimately more successful to make incremental changes to their commercial capabilities. Once the supporting capabilities are in place, they can gradually evolve their traditional approaches to deliver a return on their investment. A well structured commercial blueprint with logical priorities, coupled with a roadmap to the future and proper key performance indicators (KPIs), is at the core of many of the success examples we have witnessed.

The next building block comes in the form of organizational design: Organize to support the strategy.

For companies that have designed their blueprint and envisioned the required capabilities, the task at hand is to organize the change required to support the implementation of the new strategy. They must consider the structural implications (the organization, roles and responsibilities) as well as non-structural implications

Chris Nickum is Vice President and Global Practice Leader for the commercial effectiveness consulting practice at IMS, where he helps life sciences clients of all sizes design and implement successful commercial strategies. He has 20 years of pharmaceutical and consulting experience, including a specific focus on developing commercial strategies, sizing and designing sales and marketing organizations, devising and implementing new commercial capabilities and implementing program measurement and management strategies.

“Bringing all the pieces together involves taking action on the broader strategic plan”

such as processes, tools, skills and knowledge. Companies often underestimate the effort required to drive even step-wise evolutionary change. The real focus – and the fundamental objective – should be in making it work. IMS sees companies make the most progress planning their new organization and supporting processes when they bring together people from geographical management, brand leadership – sometimes with emerging P&L responsibilities – and those in charge of new service strategies. In the end, most strategies will cross all of these stakeholders in different contexts.

The fi nal building block belongs to execution and performance management: Make changes and track progress. For many companies, this is where the strategy meets its doom, for as the roadmap is sent down the line to be implemented it is quickly dismantled due to budget limitations, technological deficits, and other unnatural boundaries. The ideal pace of change will depend, in some part, on the company’s culture and current state.

IMS recommends that companies implement and support a thoughtful change-management program not only for the macro transformation, but for the smaller components as well. Rely on change agents at the regional and local level and follow the overarching plan, but do not be afraid to move slowly when needed.

In many cases this is new ‘turf ’, and speed can cause derailment. Assess progress often, as managing expectations is critical while pilots and other implementation aspects take place; and realize that there is no such thing as ‘over-communicating’, as communication is a primary tool for ensuring alignment and inspiring acceptance throughout the organization.

How is the industry doing with regards to change?

CN. To date, most change that IMS has observed has been to augment existing approaches or to make incremental moves, such as to regionalization or a different channel mix. However, today we see a couple of pioneering companies poised to make large-scale change, and we believe the industry is on the brink of putting it all together.

Bringing all the pieces together involves taking action on the broader strategic plan. Th is will include, but is not limited to, changing commercial strategies, redeveloping commercial partnerships, aligning the organization and staff to new objectives and measurement, and then layering this on top of new infrastructure. Th is of course will take time, and we will see if as an industry we can go further than ‘toe deep’. We believe that since the pharmaceutical industry is now armed with proven approaches to defi ne the future, a view past the patent cliff and many solid examples of innovation and transformation, it will soon take the next steps as an industry.

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ASK THE EXPERT

Ireland and the US pharmaceutical industry

By Barry O’Leary

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reland is home to eight out of the top ten pharmaceutical companies in the world and the relationship between the US pharmaceutical industry and Ireland is based on a history of successful investment and Ireland’s ability to meet the needs of US multinationals establishing operations in Europe. There are approximately 90 blockbuster drugs on the market; that is, drugs achieving sales of over $1 billion per annum.

Today the top ten blockbuster drugs account for around 10 percent of total industry revenue. Of these top ten drugs, six are manufactured in Ireland.

IDA Ireland, the Irish Government Agency responsible for investment and development, continues to position Ireland as the innovation-led and knowledge-based economy of choice for US pharmaceutical investment.

Ireland provides a highly skilled workforce with an impressive regulatory track record and strong local management, and has a solid reputation for industry-academia collaboration. Currently there are approximately 20,000 people employed in the pharmaceutical sector in Ireland. We have a 12.5 percent corporate tax rate and a 25 percent research and development (R&D) tax credit.

There is no stamp duty on intellectual property (IP) transfer in Ireland. Added to this, our industry-relevant infrastructure is second to none, with IDA linking companies with excellent pre-planned sites, a developed subsupply system and world-class design consultants.

The economic downturn of the last two years has also made Ireland a much more competitive location for foreign direct investment (FDI) and has seen a 30 percent decrease in the country’s building costs and significant reductions in land costs. An investment history from the pharmaceutical sector going back over 30 years has also led to Ireland’s leading reputation for pharmaceutical investment.

Transformation is one of the primary factors for the continued success of Ireland’s pharmaceutical landscape, with many companies enhancing their original manufacturing functions through the addition of further high-end activities including research, development and innovation (RD&I) and convergence. The promotion of RD&I in Ireland is of paramount impor-

tance to IDA and this can be seen in the establishment of NIBRT, the National Institute for Bioprocessing Research and Training, funded by IDA. NIBRT’s mission is to conduct world-class research and training in key industrial areas of bioprocessing. The Institute trains highly skilled personnel for the bioprocessing industry and provides flexible, multipurpose research and training facilities.

US pharma giant Eli Lilly is currently carrying out collaborative research on glycan analysis in conjunction with NIBRT. Other leading research facilities in Ireland include the Centres for Science, Engineering and Technology (CSETS), which include the Alimentary Pharmabiotics Centre at University College Cork, with Proctor & Gamble involved in researching the impact of intestinal bacteria and probiotics on GI disorders.

Ireland has secured over $5 billion of investment over the last number of years from biopharmaceutical corporations including Pfi zer, Allergan, Genzyme, Gilead, Merck, Lilly and Centocor, and the majority of US pharmaceutical companies have multiple sites for both manufacturing and R&D. Despite this, the traditional pharma sector is experiencing slightly slower growth due to a combination of factor’s including patent expiries, competition within the growth of generic manufacturers and the increased costs of clinical and pre-clinical research.

However, Ireland continues to lead the field in pharmaceutical investment. The life sciences sector, overall, was responsible for $52 billion worth of exports in 2009. Recent investments in the pharmaceutical sector include PPD’s $37 million investment in bioanalytical and chemistry services in Co. Westmeath; Centocor’s investment in a Biopharmaceutical Manufacturing Centre of Excellence in Cork; Merck’s investment of $245 million in a new vaccine facility in Carlow and Eli Lilly’s investment of a $490 million in biologics facility in Co. Cork.

The IDA continues to work closely with its US client base in the pharmaceutical and biopharmaceutical sectors and works to ensure Ireland continues to be the location of choice for US investment.

“Currently there are approximately 20,000 people employed in the pharmaceutical sector in Ireland”

In October 2007, Barry O’Leary was appointed Chief Executive Designate of IDA Ireland. He has worked in IDA for over 30 years in most of its business areas, including two periods totaling 15 years in Germany, latterly as Director of Europe.

O’Leary has led IDA teams in winning significant investments from a number of key clients, such as Lilly BioPharma, Servier, Pfizer, Centocor, Cordis, IBM, Kelloggs, Altana, Merck and Cisco Systems, among others.

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he other city that never sleeps – and it truly never does – is without doubt the world’s largest adult playground; exchange the climbingframes for blackjack tables and swings for slot machines and you get the idea. But nothing can replace the moment when you realize you’ve just walked past two pyramids and a sphinx in the middle of the Nevada Desert while the skyline illuminates everything behind you. Fortunately, Las Vegas is a hub of pharmaceutical events and conferences, spanning across hotels, arenas, and incredible customized venues that have been serving the industry’s biggest and brightest for a good few years, so if you haven’t had the privilege of having your jaw-dropped recently, NGP has the answer in its own version of Las Vegas tourist information. Take our word for it.

1. The Stratosphere Las Vegas Hotel and Casino Two types of people walk through the doors at the Stratosphere – those there to relax, which is completely understandable for a hotel – and those there for an adrenaline rush. If you’d consider yourself one of the latter, then this is a must. Standing at a chilling 1149 feet high in the Vegas skyline, the Stratosphere Tower boasts of being the tallest observation tower in the US. Not that exciting? Well, add three roller coasters and a controlled free fall, all outside the roof of the tower, and you have your answer. The ‘X-Scream’ propels you 27 feet over the edge of the tower while you look 866 feet below you, while ‘Insanity’ extends you 64 feet out from the tower on a huge mechanical arm and spins you with a force of 3G for a truly memorable experience. Just don’t try to take your drink up with you.

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2. ‘Bodies…The Exhibition’ at the Luxor Hotel Perhaps not one to visit immediately after the Stratosphere rides, ‘Bodies…The Exhibition’ will easily 03 trump any science lab dissection you did at school.

With an intricate, 3-D vision of the human form, visitors get to see real bodies preserved along with their inner organs. Showcasing 13 whole-body specimens from China and more than 260 organs and partial body specimens, each piece goes through a method known as polymer preservation where all the tissue and water is replaced with silicone rubber. There are sections dedicated to bodily decay, wonders and anomalies that will leave you with a completely different perspective on the human body – after all, it’s not everyday you get to see what makes you tick.

3. The Freemont street experience Legendary casinos, free entertainment, old-fashioned gambling hospitality – this is the vintage Vegas of the Freemont Street Experience. On any given night you could bump into famous bands, strolling showgirls or be privileged enough to witness an amazing saxophone performance. The first paved street in Vegas, Freemont Street boasts a seven-block, open-air pedestrian mall underneath a 90-foot LED canopy that projects a myriad of eye-popping color combinations, while 12.5 million bulbs ramp up the resolution to literally blow your mind. To cut a long story short, no visit to Vegas is complete without a walk down this legendary street.

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Meet Las Vegas Harrah’s Entertainment Vice President, Michael Massari, turns the lights down low to explain what Las Vegas can do for the world of pharmaceutical meetings.

As the head of an organization that hosts upwards of 4500 meetings a year, in what is arguably the number one meetings destination in the country, you talk to people all across the pharmaceutical industry at all levels. What are you hearing from these customers?

What are they talking about?

I hear our customers talking about when they should have meetings, where they should have them, what topics should be covered – even if they should have them at all. Most of all, I hear them talking about the ROI of their meetings. They’re asking ‘what is the return on all this time and money spent holding a meeting?’ Everyone is re-evaluating and being more strategic. While this is obviously somewhat painful in the short run, in the long run I think this is a good thing, as companies start to think about these things on a more strategic level and business leaders make decisions on how to conduct their meetings based on what’s going to produce the maximum return on investment. They’re thinking about technology’s role in their meetings. They’re asking should I have a meeting and, if the answer is yes, should I do it via teleconference or a Webex – or should I have an inperson meeting?

A lot of companies are considering whether to replace in-person meetings with a technology-based meetings solution. How do you see technology fitting in to the conversation about meetings?

Technology is an amazing thing and it is part of the conversation about meetings. If you’re doing an internal meeting, you may get a better ROI by doing a web meeting or a conference call. Maximizing ROI is what we’re all after. But if you are conducting a sales meeting, customer event or a product launch, nothing can take the place of doing that in-person. What we say is, if you don’t care about the answer or result, send an email. If you kind of care, make a phone call. If it’s really important, do it face-to-face. I really believe that applies across the board, regardless of the subject at hand. A great deal of communication is non-verbal.

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Nothing beats face-to-face, particularly if the result or answer is important to you.

What about the perception issues Las Vegas has had?

You guys have been beat up in recent months by the media and by some of our elected officials.

At the end of the day, it has to come back to ROI and I hear the same thing from the executives I talk to.

They recognize that they have a fiduciary responsibility to their stakeholders to do what makes the most sense for the business and – when it comes to meetings – to select the destination and the supplier where they’re going to get the greatest value and realize the maximum return on investment. It’s that simple.

How are you going to produce the best return for your stakeholders?

The perception of the destination does have a place in that equation because it has either a positive or a negative connotation. But it’s not the only factor; if it’s the only factor you’re no longer being a good steward of your business.

Michael Massari is Vice President of Meeting Sales and Operations for Las Vegas Meetings by Harrah’s Entertainment. He has nearly 20 years of experience in meetings and hospitality, and was named one of the 25 Most Influential People in the Meetings Industry by Meeting News magazine.

So, how does Las Vegas provide this value and return on investment?

Well, I think it comes down to two key things, and lots of places have one, and lots of places have the other, but very few have both, and Las Vegas has both.

The first is the ability to execute the best meetings on the planet. And what could be more important to a pharmaceutical company than a sales meeting or a doctor’s conference or a product launch? Las Vegas is better equipped than any other destination to host these types of programs and execute them more successfully than anywhere else. The second is that we have a place where doctors and salespeople and people in general really want to come to. When you’re holding a meeting in Las Vegas, you don’t have to worry about convincing people to come.

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DETAILS. TRAVEL

Continued from Page 128

4. Siegfried and Roy’s secret garden and dolphin habitat at The Mirage hotel Not only is The Mirage hotel an icon in Vegas, but many of the attractions it holds are too – and Siegfried and Roy are no exception. Their secret garden and dolphin habitat lets you come face-to-face with white lions and tigers, panthers, leopards and a family of bottlenose dolphins; if looking at them isn’t enough for you, or indeed your little nippers, then you can indulge your fantasy and become a dolphin trainer for the day. Working with their dolphin specialists, you’ll participate in plenty of activities including playing with, training and getting in the water with the dolphins.

When you finally tire of your aquatic shenanigans, there’s a three-course gourmet lunch waiting for you.

Didn’t think you could do that in the desert, did you?

04

5. The Bellagio conservatory With over 100 cast and crew members, this could very well be Vegas’ biggest free gig. With over five million visitors each year, the conservatory lets the seasons dictate its contents and, just like a Broadway show, the floral theatrical productions take months of work and an army of talented people. From giant ants to dragons throughout the walk, you can’t help but become a small cog in the imagination of the Bellagio – inspired, of course, by Mother Nature herself. Last year’s summer event was witness to a 40-foot tall ferris wheel and an assault of 16-foot tall poppies, and the word on the grapevine is that this year’s event promises to surpass any other they’ve ever done. The best bit about it all – it stays open 24 hours a day so there’s no need to interrupt your luck at the tables.

Top five hotels

Wynn Las Vegas: The newest hotel to hit the strip, the Wynn boasts original Van Gogh and Picasso pieces showcased around Louis Vuitton and Chanel shops – just in case you didn’t have enough luxury already.

Four Seasons: A hotel within a hotel, based on floors 35-39 of the Mandalay Bay hotel. Say no more.

The Bellagio: Remember Ocean’s Eleven with the amazing hotel fountains and the angry boss? This is that hotel – minus the angry boss.

The hotel at Mandalay Bay: If you’re looking for the biggest rooms in Vegas, look no further.

06 05 6. Gondolas at The Venetian I’m sure everyone is aware of the gondola rides in Venice, but how many people have actually been there?

For those of you who haven’t, you can make it up by taking a stroll down to The Venetian hotel and casino at the intersection of Las Vegas Boulevard and Spring Mountain Road to witness the surreal for yourself.

With opera singers, a strolling juggler and various violinists all under a painted fresco overhead, a visit is sure to entice your Italian side out to play. If shopping is your thing – or your other half’s thing – then the Grand Canal Shoppes have everything to offer, including exceptionally high-quality blown glass and unique Venetian masks. Of course, you could just use it as an excuse to lose someone and go gambling.

The choice, as they say, is entirely yours.

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The Venetian: Italian opulence, complete with marble baths in every room, provides a truly relaxing stay away.

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DETAILS. NEXT BIG THING

On the cusp Denis Grant helps set the stage for excellence and innovation in Toronto’s pharmaceutical biotech sector.

W

ith the convergence of basic biomedical science, biotechnology, advanced information technology, biomedical engineering and nanotechnology, the potential for accelerating progress in pharmaceutical and biotechnology discovery and innovation has never been greater.

Critical to enabling and facilitating this progress is the creation of an optimal, strategically integrated research environment and infrastructures where multidisciplinary collaboration is fostered across multiple public and private institutions. Toronto, Ontario, Canada excels at making this happen.

Toronto is a globally competitive center for groundbreaking basic and clinical research, with historical and current strengths in areas including new cancer therapeutics, stem cell research and development, genomics, bioinformatics, and the development of new diagnostic and therapeutic tools for every imaginable disease process. Toronto’s ‘Discovery District’, located in the city’s core and anchored by the worldrenowned University of Toronto and its faculties of Medicine, Pharmacy and Engineering, is a dense critical mass of academic, hospital-based and government-supported research and development institutions.

The Discovery District is home to over 5000 scientists, over 30 specialized medical and academic-affi liated research institutes, nine teaching hospitals, a thriving life sciences industry with over 700 companies, a supportive government structure that nurtures research and innovation, annual research budgets totaling over one billion dollars a year and business support services specifically geared to pharmaceutical and biotech innovation.

In recent years, the Toronto research community has made significant strides in fostering communication, integration and cooperation among its affi liated institutions. Th rough the Toronto Academic Health Science Network (TAHSN), administrative governance structures have been put in place to encourage 18 fully affi liated, associate and special participant/guest institutions to engage in establishing strategic directions, fostering greater levels of cooperation and resource sharing and developing joint projects.

The University of Toronto has an extremely well-developed patient base with nine fully-affi liated research and teaching hospitals and their accompanying research institutes. Th is connection between the basic and applied sciences facilitates the process of translating basic discoveries to clinical application – from bench to bedside. By bringing together technological enablements and a well-developed patient base we are able to study patients who benefit directly from our work.

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To further facilitate the translation from bench to bedside, innovation and technology transfer functions are being more closely integrated among participating TAHSN institutions to support basic and clinical investigators on intellectual property and commercialization issues. Discoveries with potential commercial applications can be pursued with the will and support of scientists and their supporting institutions to enable and facilitate discovery and application.

A key element of this is the Medical and Related Sciences (MaRS) building in the downtown core, a convergence centre with 750,000 sq. ft of research labs, business incubator facilities and business offices that opened in 2005. Th rough MaRS Innovation (MI) and each of its 14 Ontario-based academic research institutions, for the fi rst time the exceptional discovery pipeline of our academic institutions will be assembled into a single diversified portfolio of IP assets and provide a means to harness the economic potential of the best opportunities.

To meet future trends and opportunities, Toronto’s historical strength in genomics coupled with its superior patient base puts it in an ideal position it to utilize emerging next-generation DNA sequencing technologies (such as those currently housed at the Ontario Institute of Cancer Research) over the next decade to delve in ever greater detail into the next phase of population-based whole-genome analysis. We will experience a tipping point in our ability to understand the integrated functions of cells and tissues in human populations in both health and disease using systems biology approaches, which will ultimately allow for the more efficient identification of novel drug targets.

A fi nal key ingredient in setting the stage for excellence and innovation in Toronto is the city itself. Toronto is diverse, progressive, multicultural, inclusive, innovative, inspiring, open to new ideas and embodies the very essence of an ideal academic environment where curiosity-driven basic researchers, clinicians and innovators can flourish. Such an inclusive and open environment, combined with a strong and strategically integrated research environment, provides an excellent strategic advantage for the recruitment of top scientists and clinicians from around the world.

Denis M. Grant is Professor and Chair of the Department of Pharmacology and Toxicology in the Faculty of Medicine, and Professor in the Leslie Dan Faculty of Pharmacy at the University of Toronto. Prior to assuming this position, Grant was a scientist and senior scientist at Toronto’s Hospital for Sick Children Research Institute, with academic appointments to the University of Toronto, before holding a management position at Orchid Biosciences in Princeton, New Jersey.

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DETAILS. EXECUTIVE HEALTH

Healthy body, healthy mind Work-related stress getting to you? NGP explores three of the top retreats in the country, giving you the perfect excuse to disappear into the wilderness.

The Lodge at Sun Ranch A luxury eco-lodge located in southwestern Montana, near the angler-acclaimed Madison River and just 40 minutes from Yellowstone National Park, Sun Ranch is in the center of a 26,000-acre sustainable cattle ranch. Recreational opportunities in the Madison Valley include y-ďŹ shing, horseback riding, hiking, canoeing and bird-watching. Or stay indoors and savor a culinary lesson with the chef or enjoy the indulgence of a massage in your cabin.

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Blackberry Farm A rustic retreat hidden away in the Great Smoky Mountains in Tennessee, Blackberry Farm is situated on a pastoral 4200-acre estate, with great views and boundless luxury.

Regardless of the season, Blackberry Farm offers countless activities and adventures from nature hikes, mountain biking and fly-fishing, to pure indulgence at the Farmhouse Spa.

The Greenbrier An award-winning resort located in White Sulphur Springs, West Virginia, the Greenbrier has been around since 1778 and is full of southern hospitality.

With an unparalleled tableau of outdoor adventures to challenge the widest range of interests, it is impossible not to find something to your liking within this 6500-acre playground. The resort offers more than 50 activities, including: whitewater rafting, hunting, falconry, billiards, bowling, croquet and wine tasting.

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DETAILS. ON THE MOVE

First class airport lounges Take a break and recharge your batteries by stopping off at some of the world’s best equipped airport lounges during your next business trip.

The Wing and The Pier Cathay Pacific, Hong Kong

Luft hansa First Class Terminal, Frankfurt Lufthansa has taken the lounge concept Lufthansa First Class Terminal, Frankfurt

Virgin Clubhouse, Virgin Atlantic, San Francisco Virgin’s Clubhouse lounge at San Francisco Airport boasts spectacular views of the city’s iconic landmarks. To best reflect the bright harbor lights and distinctive buildings of the city, it features moving glass panels which are colored to create different atmospheres within the same space. Five monitors displaying digital art and a magnificent view across the Bay further embellish the setting. For the busy executive, there are laptop points throughout and 24-hour business facilities. The centerpiece of the Clubhouse, the bar made of glass, has won a string of prestigious design awards.

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one stop further at Frankfurt International Airport by creating an entire all First Class Terminal.

Features include private spaces with daybeds and luxurious bathrooms. Private office units with a telephone and laptop are also provided for those who are unable to clock off. The restaurant hosts a seasonal menu and first class wines, and an extensive buffet is also available.

Located within Hong Kong International Airport, The Wing and The Pier premier lounges both offer exceptional first class facilities. The lounges pay attention to individual details, and feature six DayBreak rooms and Personal Living Spaces. Relax in an armchair with a private television, or take full advantage of the top of the range broadband-connected personal computers.

There are multiple places to dine within the Lounge; The Haven offers a stylish menu and interior or choose a meal at the Noodle Bar. For a concierge service, the Marco Polo Club is available.

The Wing and the Pier, Hong Kong

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Premium Lounge, Abu Dhabi

Golden Lounge, Malaysia Airlines, Kuala Lumpur Designed with families in mind, the Golden Lounge at Kuala Lumpur International Airport features a man-made rainforest, a river and a Creative Kids’ Corner.

There is even a slumber room for tired children.

For adults, there are also plenty of opportunities to unwind, including massage chairs and an extensive drinks and food menu.

Busy executives can take advantage of wireless LAN, meeting rooms and Malaysian stock market update displays on screens around the lounge.

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Golden Lounge, Kuala Lumpur

Premium Lounge, Etihad Airways, Abu Dhabi Elegant, warm and welcoming, Etihad’s lounge offers the comfort, space and facilities to make your journey through the airport a pleasant experience.

The lounge is well equipped with laptop connections, highspeed internet access and fax and telephone facilities. There’s also an excellent range of audio and video programmes to keep you entertained, as well as a fine selection of refreshments and hot and cold buffet dishes to choose from. Situated on the first floor of the airport, it offers a stunning view of the runway.

Club Lounge, British Airways, Heathrow BA’s Terminal 5 hosts six lounges within its New Galleries Arrivals area. The BA Club Lounge, which opened in September 2008, features luxurious furniture classically tailored in rich velvets and herringbone fabrics.

A restaurant menu is provided, with waiter service allowing passengers to dine before boarding their fights.

Also located within Terminal 5 is the Elemis Travel Spa, which provides spa therapies for both men and women to refresh and relax passengers.

Club Lounge, Heathrow

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DETAILS. INDUSTRY INSIGHT

Well placed Why New Jersey remains a highly desirable location for life sciences businesses.

By Caren Franzini New Jersey has a richly deserved reputation as a pioneering state for biotechnology and the life sciences. A talented workforce that makes the state a leader in innovation, research and development – and New Jersey’s location in the heart of one of the world’s larger and more vibrant workplaces between New York City and Philadelphia – are among its principal strengths. The support of trade organizations like BioNJ, the HealthCare Institute of New Jersey and the New Jersey Technology Council is another.

These advantages bolster the state’s aggressive efforts to attract investment from other regions, both foreign and domestic, and support the companies that have already found New Jersey to be a great place to do business.

Bausch + Lomb, one of the world’s better known and more respected healthcare brands, made the decision to locate its pharmaceuticals business headquarters and 100 jobs in Madison, NJ in 2009 for exactly these reasons, says Phil Gioia, the company’s Head of North American Pharmaceuticals.

“As the epicenter of the pharmaceutical market, New Jersey was the perfect choice for our operations,” he says. “In addition to the state’s strategic location in the heart of the East Coast, we have also been able to attract a talented and professional workforce to staff our Madison facility.

Bausch + Lomb’s Pharmaceuticals business is proud to call New Jersey our home.”

Bausch + Lomb was just one of 125 life sciences and technology companies that benefited from more than $120 million in direct investments, business incentives, tax credits and venture fund commitments delivered on behalf of the state in 2009 by the New Jersey Economic Development Authority (EDA), the state’s financing and development agency.

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Over two-thirds of this amount went interest in working with New Jersey to find exclusively to life sciences companies, a future state site for a new manufacturing including biotechs. These investments are plant. supporting over 2100 existing jobs and an ThestatehelpedShanghaiBioCorporation estimated 1900 new jobs, leveraging more in a different way. When this global specialty than $270 million in total public/private research and development services business investment in New Jersey. headquartered in Shanghai’s Bio/Pharma Roughly $50 million of this amount was Valley region was looking to set up a US attributable to the Business Employment location, it found just the space it needed Incentive Program (BEIP), which provides at the EDA’s Commercialization Center for grants to businesses relocating to or Innovative Technologies in North Brunswick. expanding in New Jersey.

The Commercialization Eleven BEIP agreements Center, one of the more finalized in 2009 were significant life sciences and executed with life sciences technology incubators in companies, including Bausch the nation, is located within + Lomb, representing nearly the Technology Centre of all of the anticipated new New Jersey, which currently jobs. These 10-year estimated is home to more than 30 grants ranged from as low as emerging and established $103,000 for CGC Genetics life sciences businesses. It of Newark to a high of more recently became one of only 14 Franzini has served than $32 million for ImClone Caren business incubation facilities as Chief Executive Officer of the New Jersey Economic Systems of Branchburg. in the world to earn the Development Authority Soft Landings International (EDA) since January 1994. The EDA is a state financing and International efforts Incubator designation from the development agency that New Jersey has made works to strengthen New National Business Incubation Jersey’s economy by retaining special efforts to expand and growing businesses Association.

The honor financial assistance, by its reach internationally as through recognizes an incubator’s focus renewing communities, and by well. When Zhejiang Hisun promoting the state’s strategic on accepting non-domestic advantages to attract domestic Pharmaceutical Co. Ltd. of and international businesses. firms into its market.

China was looking to set The EDA is also up a sales location in the constructing 20,000 square United States last year, the EDA arranged a feet of generic wet labs on the fifth floor meeting among company executives, state of its 100,000-square-foot Waterfront officials and representatives of BioNJ, the Technology Center at Camden. Drexel HealthCare Institute of New Jersey and the University’s A. J. Drexel Plasma Institute New Jersey State Chamber of Commerce. plans to occupy about 10,500 square feet of As a result of the collaborative effort the space this year. DPI is a major research to attract this pharmaceutical ingredient initiative of Drexel University for the manufacturer and global giant to the state, application of plasma science to biology Hisun Pharma USA opened its facility in and medicine.

For more information, please call (866) 534-7789.

Princeton in March 2010, while expressing

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DETAILS. INFOGRAPHIC

141

Pharma’s US Headquarters Bristol-Myers Squibb New York Pfizer

Baxter Healthcare Shire Abbott Laboratories Johnson & Johnson Eli Lilly

AstraZeneca

King Pharmaceuticals

Novartis

GlaxoSmithKline

UCB

Merck & Co

Altana Pharma New Jersey

Name

Total Revenue (millions)

US Headquarters

Johnson & Johnson

$61,897

New Brunswick, New Jersey

Pfizer

$50,009

New York, New York

GlaxoSmithKline

$44,421

Research Triangle Park, North Carolina

Novartis

$44,267

East Hanover, New Jersey

AstraZeneca

$32,804

Wilmington, Delaware

Abbott Laboratories

$30,765

Abbott Park, Illinois

Merck & Co

$27,428

Whitehouse Station

Eli Lilly

$21,836

Indianapolis, Indiana

Bristol-Myers Squibb

$18,808

New York, New York

Baxter Healthcare

$11,263

Deerfield, Illinois

UCB

$3,800

Atlanta, Georgia

Shire

$3,000

Wayne, Pennsylvania

King Pharmaceuticals

$1,600

Bristol, Tennessee

Altana Pharma

$1,452

Florham Park, New Jersey

[ Size of circle corresponds to total revenue ]

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Your World.

COVERED From the people you hire to the products you sell, if you’re in business, we’ve got it covered...

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DETAILS. GADGETS 143

Technology for today’s executive Apple iPad Apple believes the new tablet will occupy a gap in the market between an iPhone and a MacBook. Downside: it’s too big to fit in your pocket and too impractical to replace a laptop. There’s no denying the iPad’s seductive curves and glorious 9.7-inch screen will have Apple fans’ palms perspiring, but its ability to garner mass-market appeal looks uncertain.

Desirability rating: aaa

Denon AH-D7000 headphones Can you ever justify shelling out $1080 on a set of headphones? Denon thinks you can, which is why its premium AH-D7000s have been receiving critical acclaim from both tech experts and audiophiles. These lighweight cans produce stunning sound quality across all music genres. The build quality is sumptuous – personified by the glossy mahogany enclosures and soft leather earcups.

Desirability rating: aaaa

Fujifi lm Finepix REAL 3D W1 LG GD910 A watch that doubles as a mobile phone; what’s not to love? Thanks to LG and its futuristic-looking watch phone, the stuff of dreams when you were a kid is now a reality. As a wristwatch it’s on the chunky side, but its pleasing looks more than compensate. It boasts a touch screen, high speed internet and video calling capabilities. Oh and it displays the time too.

Desirability rating: aaaa

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Camera manufacturer Fujifilm has capitalised on the current 3D hype with the world’s first digital camera with three-dimensional imaging. The W1 uses two lenses and two sensors, which take an image of the foreground and background. This is processed to create an image that jumps out at you. Users can either view the image on the camera’s 2.8-inch screen or buy a special eightinch digital photo frame (sold separately).

Desirability rating: aaa

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DETAILS. PHOTO FINISH

A jar full of medical marijuana at Sunset Junction medical marijuana dispensary in Los Angeles, California. The dispensary was one of 25 plaintiffs in a lawsuit against the city of Los Angeles ďŹ ghting to stay open after city prosecutors began notifying 439 medical marijuana dispensaries that they must shut down.

A judge dismissed last-minute legal challenges from pot shop owners and patients seeking temporary restraining orders to keep those shops open. That decision means ofďŹ cials can now enforce a long-awaited law that will slash the number of dispensaries to between 70 and 130.

Dispensaries that registered before a 2007 moratorium will be allowed stay open if they abide by new guidelines, including being located at least 1000 feet away from schools, parks and other public gathering sites.

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