Health & Medical Question
A five-point bulleted summary of the lecture pdf presented below (9-Pelleymounter-B…). Each bullet point should be approximately 5-7 sentences and concisely and accurately describe a major aspect of the lecture. *****The full summary should be no longer than one-page long. The goal of the exercise is to recognize the most important aspects of each lecture and effectively communicate them. ***I HAVE PROVIDED AN EXAMPLE OF HOW THE FLOW OF THE SUMMARY SHOULD SOUND LIKE. PLEASE FOLLOW THAT EXAMPLE STRICTLY.(1B Summary Example)
PROMPT: PLEASE SUMMARIZE WEEK 10B Raddatz- BioSimilars and 9A Calvo- Patent Law A POWERPOINT ( PLEASE DO NOT COPY IT WORD FOR WORD. PLEASE PARAPHRASE AND PUT THE IMPORTANT CONTENT IN THE SUMMARY)
Also write a 2 paragraph summary regarding this prompts:
1.Based on your current knowledge of the drug discovery process, what single recommendation would you make to a mid- to large-sized pharmaceutical company to decrease risk and/or increase profitability. Please provide a brief rationale for your suggestion.
1. The landscape of clinical trials has changed drastically over the last decade. The
protocols are becoming more complex, leading to increased workload, burden on
patients, and longer treatment times. Additionally, there has been an increase in the
number of Phase 3 projects terminated, resulting in increasing costs of drug
development – which is an accumulation from preclinical studies, failures, salaries, and
the profit that could have been earned if the drug was approved.
2. The launch of ClinicalTrials.gov in 2000 provided key insight into the evolution of clinical
trials. With the requirement by ICMJE to report prospective registration of clinical trials
as a precondition for publication, this ensured that not only “successful” trials are
published. The details required on ClinicalTrials.gov have expanded overtime, such as
reporting results and adverse events. As of 2016, over 200,000 trials are listed and
conducted in 191 countries.
3. Phases of clinical drug development are categorized as I, II, III, and IV. Phase I studies
typically involve healthy volunteers or patients and conducted to determine responses
to drug in humans and animals. The goal is to assess safety, efficacy, tolerability, and
PK/PD of the drug. In Phase II trials, the drug is being studied in patients with the target
disease for the first time to assess dosing requirements and study efficacy. When the
drug development process fails, it typically happens in Phase II. Phase III studies are
done in a much larger scale to further establish safety and efficacy. Phase IV trials are
also known as Post Marketing Surveillance Trial, which may be required by regulatory
authorities or sponsors to monitor the safety of the new drug in large number of
patients.
4. A good protocol is designed to answer research questions. A good research question is
constructed with three key points in mind: feasibility, relevance, and justifiable costs.
Regarding feasibility, one must consider whether there is sufficient patient population
that can enroll in the study as well as whether the trial is manageable in scope. For
relevance, one must determine if the trial will advance scientific knowledge, guide
further research, or affect public policies. Lastly, is the study aligned with the
therapeutic focus of the sponsor to justify the costs it will take the conduct the study?
5. There are three ethical principles in clinical research that must be taken into
consideration. First, it is the principle of Respect for the Person. This principle has two
moral requirements – acknowledging that individuals should be treated as autonomous
beings capable of representing their own goals and interests and acknowledging that
people who are not capable of self-determination must be protected. Second,
beneficence notes that scientists must refrain from knowingly harming their research
subjects. Lastly, justice refers to the principle that the benefits and burdens of research
must be fairly distributed.
Risk in The Business of
Biopharmaceutical Discovery and
Development
James Samanen
James Samanen Consulting
2-Mar-16
Numbered references in brackets from “The Structure and Business of Biopharmaceutical Companies including the Management of Risks and
Resources”, James Samanen, Chapter 7 in “Introduction to Biological and Small Molecule Drug Research and Development: theory and case studies”
edited by Stanley Roberts, C. Robin Ganellin and Roy Jefferis, Elsevier 2013.
Outline
1. Introduction – The Business of Biopharmaceutical
R&D
2. The Organization of Biopharmaceutical R&D
3. Success/Attrition and Risk
4. Resource – Who Does What When and Where
5. Managing the Flow of Work in Discovery and
Development
6. Corporate Behaviors
7. Cost Reduction Experiments in the Business of
Biopharmaceutical Discovery and Development
There will be time for questions after each section
Biopharmaceutical and Protein-Based Drugs
• Biopharmaceutical companies
– companies that specialize in protein-based drugs and
– companies that pursue both types of agents – small
molecule and protein-based drugs
• Protein-based drugs
– therapies based on protein agents, e.g. monoclonal
antibodies, cytokines, tissue growth factors and
therapeutic proteins
1. The Business of Biopharmaceutical R&D
Topics
A. It is Big Business
B. The Successful Drugs Also Pay for the Failed Drugs
C. Revenue Challenges
D. Revenue Opportunities
Top Industries in 2016
by Net Profit Margins
• It’s big business
Top Biopharmaceuticals
Worldwide in 2015
WW
Ranking
(7)
Drug
1
Humira
2
Harvoni
3
Enbrel
Generic Name
adalimumab
Ledipasvir/Sofosbuvir
Etanercept
Type
protein
small molecule
protein
4
Remicade
Infliximab
protein
5
6
7
8
9
10
11
Rituxan
Lantus
Avastin
Herceptin
Revlimid
Sovaldi
Advair/Seretide
Rituximab
protein
Insulin glargine
protein
Bevacizumab
protein
Trastuzumab
protein
Lenalidomide
small molecule
Sofosbuvir
small molecule
Fluticasone/salmeterol small molecule
12
13
Crestor
Lyrica
Rosuvastatin
pregabalin
small molecule
small molecule
14
15
16
17
18
19
20
Neulasta
Gleevec
Xarelto
Copaxone
Januvia
Abilify
Tecfidera
pegfilgrastim
Imatinib
Rivaroxaban
Glatiramer acetate
sitagliptin
Aripiprazole
Dimethyl Fumarate
protein
small molecule
small molecule
protein
small molecule
small molecule
small molecule
2015 Sales
Est. in $
billions (7)
$14.01
$13.86
$8.67
$8.36
Disease Indications
Rheumatoid arthritis
Infectious Diseases (HIV, Hepatitis etc.)
Autoimmune diseases
Psoriasis, Crohn’s disease, ankylosing spondylitis,
psoriatic arthritis, rheumatoid arthritis, and ulcerative
colitis
$7.15
Lymphomas, leukemias, transplant rejection, and
autoimmune disorders
$7.03
Diabetes
$6.75
Various cancers
$6.60
Breast cancer
$5.8
Multiple myeloma
5.28
Hepatitis C viral infection
$5.22
Asthma and COPD
$5.01
High cholesterol and cardiovascular disease
$4.84
Pain
$4.72
Neutrophil stimulation after chemotherapy
$4.66
Multiple cancers
$4.35
Anticoagulant
$4.02
Multiple sclerosis
3.86
Diabetes
3.8
Antidepressant
$3.64
Neuroscience and Mental Health
Successful Drugs
Pay for the Failed Drugs
• Successful drug – brings in considerably more
revenue than the expenses from the discovery,
development, manufacture and sales of the drug.
– Good return on investment (ROI).
• Most R&D projects fail
• In any company, cost of R&D – paid for by drugs that
bring in revenue for company.
• R&D – the future – a lot at stake in the business of
R&D
Hypothetical Cash Flow versus Time Plot
• Cash flow – the difference between revenue and expense
+$
Revenues > Expenses
Cash Flow
Time
-$
Revenues < Expenses
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Also in J.A. Vernon et al Quart. Rev. Econ. & Finan. 49 (2009) p. 1260-1274
Hypothetical Cash Flow versus Time Plot
• Prior to Product Launch, there are no revenues, only expenses
+$
Revenues &
Expenses
Cash Flow
Expenses
-$
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Also in J.A. Vernon et al Quart. Rev. Econ. & Finan. 49 (2009) p. 1260-1274
Time
Hypothetical Cash Flow versus Time Plot
• After Product Launch, the company can begin to make money
Launch
+$
Revenues &
Expenses
Cash Flow
Expenses
-$
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Also in J.A. Vernon et al Quart. Rev. Econ. & Finan. 49 (2009) p. 1260-1274
Time
Hypothetical Cash Flow versus Time Plot
• After Product Launch, the revenues may not by dramatic at
first
Launch
+$
Revenues &
Expenses
Cash Flow
Expenses
-$
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Also in J.A. Vernon et al Quart. Rev. Econ. & Finan. 49 (2009) p. 1260-1274
Time
Hypothetical Cash Flow versus Time Plot
• Eventually there are revenues
– Hopefully Revenues exceed Expenses
e.g. Augmentin
Launch
+$
Revenues
& Expenses
Cash Flow
Expenses
-$
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Also in J.A. Vernon et al Quart. Rev. Econ. & Finan. 49 (2009) p. 1260-1274
Time
Profit = Revenues - Expenses
Hypothetical Cash Flow versus Time Plot
• Competition from other similar drugs will over time
reduce revenues
Launch
+$
Revenues
& Expenses
Cash Flow
Expenses
-$
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Also in J.A. Vernon et al Quart. Rev. Econ. & Finan. 49 (2009) p. 1260-1274
Time
Profit = Revenues - Expenses
Hypothetical Cash Flow versus Time Plot
• Profitability is challenged in a number of ways
Launch
+$
Revenues
& Expenses
Cash Flow
Expenses
-$
Extra Phase III
Trials to Satisfy
Regulatory Agencies
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Time
Hypothetical Cash Flow versus Time Plot
• Profitability is challenged in a number of ways
Launch
+$
Revenues
& Expenses
Cash Flow
Expenses
-$
Extra Phase III
Trials to Satisfy
Regulatory Agencies
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Phase IV Trials
to expand indications
Time
Hypothetical Cash Flow versus Time Plot
• Patents - filed and approved long before Launch
Launch
Patent
Approval
+$
Revenues
& Expenses
Cash Flow
Expenses
-$
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Time
Hypothetical Cash Flow versus Time Plot
• Patents – provide Period of Exclusivity
Loss of Patent Exclusivity
Launch
Patent
Approval
+$
Revenues
& Expenses
Cash Flow
Expenses
Time
-$
20 yrs
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Hypothetical Cash Flow versus Time Plot
• Revenues decrease after loss of patent exclusivity
Loss of Patent Exclusivity
Launch
Patent
Approval
+$
Revenues
& Expenses
Cash Flow
Expenses
Time
-$
20 yrs
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Hypothetical Cash Flow versus Time Plot
• Generic Companies challenge patents early on
- May lose exclusivity earlier than expected
Loss of Patent Exclusivity
Launch
Patent
Approval
Generic Co.
Litigation
+$
Revenues
& Expenses
Cash Flow
Expenses
Time
-$
20 yrs
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Hypothetical Cash Flow versus Time Plot
• Profitability is challenged in a number of ways
Loss of Patent Exclusivity
Launch
Generic Co.
Litigation
+$
Revenues
& Expenses
Cash Flow
Expenses
-$
Extra Phase III
Trials to Satisfy
Regulatory Agencies
After Rick Ng, Drugs, from Discovery to Approval, 2nd Ed. 2009, p. 11
Phase IV Trials
to expand indications
Time
Hypothetical Cash Flow versus Time Plot
• Desirable - volume under
the cash flow positive curve
is considerably larger than
the volume under the cash
flow negative curve
– to make up for
• expense of discovery and
development of that drug
and
• other R&D expenses
Challenges to Profitability
• 2 of 10 marketed drugs
return revenues that match
or exceed R&D costs
• Most projects fail
• The successful drugs must
pay for the cost of all
projects that failed or have
yet to succeed
• In 2012 - true cost of a drug
reaching market was
estimated US$ 1.2 billion
“$1.3 billion in 2013 – top 12
companies – $0.3 to $2.8 billion ”
– Deloitte & Thomson Reuters
“$2.56 billion in 2014”
– 10 companies – Tufts
Center for Drug Development
Pharmaceutical Research and Manufacturers of America (2013), Pharmaceutical Industry Profile 2013, Washington, DC: PHRMA
R&D Spend as Percent of Total Sales
Has been Flat since 1993
25.00%
Total R&D as Percentage of Total Sales
If Sales Go Up
R&D Spend Goes Up
20.00%
15.00%
Total Series1
R&D as Percentage
of Total Sales
10.00%
5.00%
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0.00%
Pharmaceutical Research and Manufacturers of America (2013), Pharmaceutical Industry Profile 2013, Washington, DC: PHRMA
U.S. Sales
from PhRMA Member Companies
$200,000.00
$180,000.00
2007 last year of growth
$160,000.00
$140,000.00
$120,000.00
$100,000.00
U.S. Sales
$80,000.00
$60,000.00
$40,000.00
$20,000.00
$0.00
Pharmaceutical Research and Manufacturers of America (2013), Pharmaceutical Industry Profile 2013, Washington, DC: PHRMA
Total Spend on R&D Slowed since 2007
R&D Expenditures
$70.00
$60.00
$50.00
2007 last year of
consistent annual
growth
$40.00
$30.00
R&D Expenditures
$20.00
$10.00
$0.00
Pharmaceutical Research and Manufacturers of America (2013), Pharmaceutical Industry Profile 2013, Washington, DC: PHRMA
Biopharmaceuticals spend more on R&D than
any other Industry
Generic Drugs vs. Branded Pharmaceuticals
• Generic drugs by definition do not provide new therapies
• The generic drug industry depends upon the branded
pharmaceutical companies to create their business
• 91% of all biopharmaceutical sales in 2015 were from
generics, up from 49% in 2000.
• Branded pharmaceutical companies lose at least $10 billion
dollars in US sales each year to generics
Pharmaceutical Research and Manufacturers of America (2015),
Pharmaceutical Industry Profile 2015, Washington, DC: PHRMA
U.S. Sales at Risk from Patent Expiration
• 2012 was the worst year
https://www.caseyresearch.com/articles/is-the-patent-cliff-a-lethal-blow-to-big-pharma?
Generics Top all Sub-industries
Who Pays the Drug Companies?
• Government Health Plans
– U.S. - Medicare
– EU – administered by country, e.g. UK - National Institute
for Health and Clinical Excellence ("NICE”)
• Health Insurance Providers
– Blue Cross/Blue Shield
– Kaiser
– Etc.
• GOAL – Pharmacoeconomic Benefit
– “Better” or “Only one of its kind” is a hard sell if it is
expensive
Branded Pharmaceutical Companies
Strive to Find New Drugs & Markets
• Working against relentless challenge of patent
expirations, biopharmaceutical companies strive to
find new drugs and new markets.
• Where are the Opportunities?
Where are the Opportunities?
Expanding Markets – BRIC Countries
• BRIC countries (Brazil, Russia, India and China)
– Estimated to be over $130 billion dollars,
– Collectively larger than Japan, and growing rapidly
– China – now the second largest market in the world
– Many drugs have yet to be marketed in these countries
• The play is with generics
– Huge risks also – these countries are not like
US/Canada/EU – culture, patent protection, regulatory
environment
http://trade.gov/topmarkets/pdf/Pharmaceuticals_China.pdf
Global Pharmaceutical Market
Total Market
2012-2017
All Countries
5.3%
North America
0.7 to 3.7%
Europe
-0.4 to 2.6%
Asia/Africa/Australia
11.4 to 14.4%
Japan
1.7 to 4.7%
Latin America
10.0 to 13.0%
http://www.imshealth.com/deployedfiles/imshealth/Global/Content/Corporate/PressRoom/
Total_World_Pharma_Market_Topline_metrics_2012-17_regions.pdf
U.S. and Foreign Sales
from PhRMA Member Companies
$350,000.00
$300,000.00
$250,000.00
$200,000.00
U.S. Sales
$150,000.00
Foreign Sales
Total Sales
$100,000.00
$50,000.00
$0.00
Pharmaceutical Research and Manufacturers of America (2013), Pharmaceutical Industry Profile 2013, Washington, DC: PHRMA
Where are the Opportunities?
Biologics
• Present new opportunities in challenging therapy
areas.
• On the rise as an important contributor to the
biopharmaceutical pharmacopeia.
• Long associated with the treatment of cancer and
immunological disorders.
– 43% of the drugs approved in these therapy areas from
1998-2008 were biologics [22].
• Now 80% (most!) of the therapy areas are now
amenable to biologics
Where are the Opportunities?
New Science
Epigenetics
• Study of factors that modulate genetic transcription
without changing the DNA or RNA of a cell.
• Led to identification of at least two mechanisms
which can be modified by drugs – DNA methylation
and histone modification.
• Drugs that involve these mechanisms have shown
efficacy in cancer [24].
• Other indications are likely to emerge as well.
Where are the Opportunities?
New Science
RNA interference (RNAi)
• Short strands of RNA can bind to native RNA and
interfere with gene expression[25].
• Challenge
– create drugs that mimic RNA interference
– develop formulations that allow for short strands of interfering
RNA (siRNA) to get through the cellular and nuclear walls and
deliver the interfering RNA into the nucleus.
• Encouragement
– RNAi formulation recently demonstrated success in human
patients with solid tumor [26].
• Truly revolutionary use for RNAi - block transcription of
abnormal proteins arising from abnormal genes.
– Cardiac Amyloidosis, muscular dystrophy, etc.
Where are the Opportunities?
• Expanding Markets – BRIC Countries
• Biologics
• New Science
– Epigenetics, Gene Therapy
– RNA interference (RNAi)
• Can expect other new opportunities to arise
Other Ways to Increase Profitability
Decrease Expenses
• Profit = Revenue – Expenses
• Lower expenses, increase profitability
• Need to understand how the business of R&D is
conducted
2. The Organization of Biopharmaceutical R&D
Topics
A. The Science of Biopharmaceutical R&D
B. The Logical Biopharmaceutical R&D Process
C. The Project Pipeline
The Science of Biopharmaceutical R&D
• To investors - all science prior to Phase III.
– Little to quantify or predict prior to Phase III.
• There’s so much research in Development we tend to
divide R&D into Discovery and Development – D&D
The Process of Biopharmaceutical R&D
Logical Order
• Organized by what happens first and what happens
next in a logical sequence of events.
• Manner in which a drug is discovered and developed
will always be the same
– Regardless of type of company or set of partnered
companies and service organizations
– E.g. computer assembly a) Install the components of a
motherboard, b) install the components that connect to it,
c) cover with casing.
• What may change in biopharmaceutical R&D organization that supports the process
Logical Process
Eight Stages of Discovery and Development
Logical Process
Eight Stages of Discovery and Development
3-6 yr
6-7 yr
0.5-2 yr
10-15 yr
Pharmaceutical Research and Manufacturers of America (2013), Pharmaceutical Industry Profile 2013,
Washington, DC: PHRMA
Target, Molecule, Indication
Progression
The Project Pipeline
• Biopharmaceutical companies work to discover and
develop more than one drug at a time
• Each drug discovery or development effort - project.
• Set of projects - portfolio
• All projects - go through all of the stages of work
• Portfolio of projects viewed by stages of work pipeline
The Project Pipeline
3. Success/Attrition and Risk
Topics
A. Success Rates per Stage
B. Reasons for Failure
C. The Attrition-Based Pipeline
D. The Sustainable Pipeline
E. Risk – How it Influences POS, Cost, Value and
Commitment
F. The Increasing Cost of Success
Stage-Related Success
• Not all projects get approved to advance to the next
stage
• What are the Success Rates at each stage?
Success Rates per Stage
• Few studies
• Success rates at any particular stage < 60%
– Except Launch - 83%
Brown, D. and Superti-Furga, G. (2003) Rediscovering the Sweet Spot in Drug
Discovery, Drug Disc. Today, 8, 106-1077
*
* 35.5% Tufts 2014
29% KMR 2014
Attrition = 1/Success
• Attrition - inverse of Success
• The overall success rate is 98% of projects fail from Target
Discovery to Launch!
– Yikes!
Cost of Developing A Drug
• Each drug that reaches market bears discovery and
development costs of all other project failures.
• Cost to develop a drug - estimated to be US$ 1.2
billion
Revised from [37] - Pharmaceutical Research and Manufacturers of America (2013),
Pharmaceutical Industry Profile 2013, Washington, DC: PHRMA
• FDA - ten percent improvement in compound
attrition would save $100 million per drug
[35]
Reasons for Failure
Discovery
• Reasons for attrition across the industry yet to be
published
• Data gathered and held in private industry
consortiums
Reasons for Failure
Development
• 69 % of attrition in Development arises from poor
pharmacokinetics and lack of efficacy
– Issues - arise in Development but can be prevented in
Discovery
[36] Khola, I., and Landis, J. (2004) Can the pharmaceutical industry reduce attrition rates? Nat. Rev. Drug Disc. 3, 711
How Do Companies deal with Risk?
Discovery
• At beginning stages of Discovery - scant evidence that
proposed therapy might actually work.
• Blockbusters that command billions of dollars in sales
today - in with the pack of wild ideas at beginning.
• Risk that proposed therapy might not come to fruition so pervasive in Drug Discovery, often not discussed as
risk
– it’s seen as “work”.
• At beginning of Discovery - risk of failure in clinic is part
of the aggregate risk that new project faces
– Even though work to reduce the clinical risk won’t occur until
candidate is identified.
• Every experiment or trial performed along the way
addresses a single component of aggregate project risk.
How Do Companies deal with Risk?
Development
• In Development (esp. late stage) - a mounting body
of evidence that proposed therapy might succeed.
• Risk
– less obvious
– needs special formal attention.
– Can be tightly managed.
Risk is Related to the Probability of Failure
D&D is the removal of Risk
• At project start, risk that any aspect will succeed - unknown
• All potential project risk - loaded at the beginning – Aggregate
Project Risk
• Each experiment
– Designed to answer one question about whether target and related
compounds will work against a disease.
– Risk - any experiment will fail.
– If successful - that particular risk is eliminated and probability of
success (POS) is increased.
Risk
POS
Time
Project Risk vs. POS, Cost
• As project team works to reduce Aggregate Project
Risk
– Project POS increases, and
– Total project Cost increases, because of cost of work
involved
Cost
Risk
POS
Time
Project Risk vs. POS, Cost, Value
• As the project team works to reduce risk,
• The project POS increases, and
• The total project cost increases, but
• Because POS increases, “potential” value of project
increases,
Value
Cost
Risk
POS
Time
Project Risk vs. POS, Cost, Value and
Commitment
• As the project team works to reduce risk,
• The project POS increases, and
• The total project cost increases, but
• Because the POS increases, “potential” value of
project increases, and
• Corporate commitment increases.
Commitment
Value
Cost
Risk
POS
Time
Goal to Reduce Risk & Increase Value
• At each stage of Discovery and Development, work is
performed to reduce aggregate project risk and
increase “potential” value.
Commitment
Value
Cost
Risk
POS
Drug Discovery
Target
Discovery
Target
Selection
Lead
Discovery
Drug Development
Lead
Optimization
Candidate
Selection
Preclinical
Evaluation
POC
Full
Development
Product
Differentiation
Registration
& Launch
Market
Access
Managing Risk & Value
in Discovery & Development
• In Discovery, risk is so obvious it’s often not discussed as such
- its seen as regular “work”.
• In Development (esp. late stage), risk is less obvious, so it
needs special formal attention. In Development it can be
tightly managed.
Commitment
Value
Cost
Risk
POS
Drug Discovery
Target
Discovery
Target
Selection
Lead
Discovery
Drug Development
Lead
Optimization
Candidate
Selection
Preclinical
Evaluation
POC
Full
Development
Product
Differentiation
Registration
& Launch
Market
Access
Managing Risk & Value
in Discovery & Development
• Later - will see how these factors influence key behaviors
within the organization of Discovery and Development.
Commitment
Value
Cost
Risk
POS
Drug Discovery
Target
Discovery
Target
Selection
Lead
Discovery
Drug Development
Lead
Optimization
Candidate
Selection
Preclinical
Evaluation
POC
Full
Development
Product
Differentiation
Registration
& Launch
Market
Access
The Increasing Cost of Success
• Branded pharmaceutical companies, unlike generics
companies need to continuously find totally new
drugs - Innovation
• In 2012 - true cost of a drug reaching market was
estimated US$ 1.2 billion
Revised from [37] - Pharmaceutical Research and Manufacturers of America (2013),
Pharmaceutical Industry Profile 2013, Washington, DC: PHRMA
4. Resource – Who Does What When and Where
Topics
A. Association of Resource with Stage – Matrix of
Work,
B. Overarching Organization
– Business Units
– Therapy Areas (TAs)
– Non-aligned Resource – Platform Technologies
Resource
Who Does What, When, and Where
Resource
• Modern euphemism for employees
• Huge part of biopharmaceutical R&D.
• Who does what when – constant aspect of resource,
dictated by the logical organization of
biopharmaceutical R&D.
• Where work gets done varies widely between
companies
Association of Resource with Stage
Matrix of Work
Various Disciplines
• Different disciplines work at different and often
multiple stages of Discovery & Development
• Organized into Line Departments
• Some are required at all stages
– Human Resources, Finance, Corporate Intellectual
Property, Licensing, Alliance Management, and Marketing
Matrix of Work
• The types disciplines that may be needed in a project at
different stages
• (Neither complete nor correct for any particular company)
Association of Resource with Business Units
Overarching Organization
• Business Units
– organization of line departments that perform stage-specific
work on projects
– have their own budgets
– operate relatively autonomously of other business units
– Most commonly divided into Discovery and Development
– Occasionally certain critical therapy areas may be split out as
separate business units, e.g. Cancer or Biologics.
– May be subsidiaries, GSK examples:
• Steifel Laboratories, a business unit focused on dermatology;
• Sirtris, business unit focused on “sirtuins” (closed last year);
• Domantis, a business unit focused on a unique type of
protein that mimics antibody structure.
Association of Resource
Therapy Areas
• Clusters of diseases for which the company is pursuing
therapies, e.g.
– Allergy & Respiratory;
– Cardiovascular and Metabolic Diseases;
– Inflammation;
– Infectious Diseases;
– Gastrointestinal;
– Neuroscience (and pain);
– Oncology; and
– Ophthalmology
• Most Discovery & Development is organized under
Therapy Areas
• Each Therapy Area has budgetary and resource control
over the majority of resources within each Area.
Association of Resource
Therapy Areas
• Resource within each Therapy Area is typically
organized into line departments based on areas of
expertise, e.g.
– Medicinal Chemistry,
– Biology,
– Drug Metabolism and Pharmacokinetics (DMPK),
– Formulations,
– Toxicology (Safety),
– Clinical, etc.
Association of Resource
Therapy Areas
• Business Plan
– Each TA usually has a 3-5 year business plan
– Describes long term goals and how to achieve them
• Formal Review at end of the period
– Organization may make adjustments that could include
• re-clustering of diseases in the TAs, and
• initiating or eliminating work on certain diseases
• Annual Review (Portfolio Review)
– Each TA reviews its progress towards its annual goals and
towards the completion of its business plan
– Budget for next year - typically established
Association of Resource
Platform Technologies
• For some areas of expertise it may be more
economical or efficient to avoid the duplication of
resource across Therapy Areas and Business Units.
• Such areas of expertise may be organized as service
organizations to the Therapy Areas
• May work in all stages of Discovery & Development
– Analytical Chemistry
• May work in specific stages of Discovery &
Development
– Medicinal Chemistry – Discovery
– Scale-up Chemistry - Development
5. Managing the Flow of Work
in Discovery and Development
Topics
A. Project Management in Biopharmaceutical R&D
B. Portfolio Management in Biopharmaceutical R&D
C. Small Molecules vs. Protein-Based Drugs
D. The Necessity of Standard Operating Procedures
Project Management in Biopharmaceutical R&D
• Project
– a way of organizing resource
– a group of individuals who are assembled to perform
different tasks on a common set of objectives for a defined
period of time
– needs a leader who can define work objectives and criteria
for success and recruit staff from all relevant areas of
expertise
• Project leader does not need to be an expert in all
areas of work, but must be able to motivate and
recognize talent and communicate with team member’s
bosses
Project Management
Level of Authority
• Level of authority depends on corporate
commitment to the project, which derives from its
potential value to the corporation
Commitment
Value
Cost
Risk
POS
Drug Discovery
Target
Discovery
Target
Selection
Low
Lead
Discovery
Drug Development
Lead
Optimization
Preclinical
Evaluation
POC
Candidate
Selection
Project Leader Authority
Full
Development
Product
Differentiation
Registration
& Launch
Market
Access
High
Portfolio Management
in Biopharmaceutical R&D
• The discipline of managing an entire portfolio of projects in company
If one or more individuals manage these functions, the company
practices portfolio management
•
•
•
•
•
•
•
•
•
•
•
•
Categorize and provide portfolio views of projects
Evaluate project progress against milestone criteria
Select and approve projects for inclusion in the active portfolio
Approve projects for advancement into the next stage
Select and approve projects for removal from the active portfolio
Identify and analyze portfolio risks
Develop and monitor portfolio risk responses
Prioritize projects
Balance or align the project portfolio to current prioritization and strategy
Develop and execute portfolio adjustment action plan
Review and report portfolio performance with respect to prioritization and current
strategy
Review and report portfolio resource alignment with prioritization and strategy
Portfolio Management
in Biopharmaceutical R&D
If no one manages these functions, the company is in trouble!
•
•
•
•
•
•
•
•
•
•
•
Categorize and provide portfolio views of projects
Evaluate project progress against milestone criteria
Select and approve projects for inclusion in the active portfolio
Approve projects for advancement into the next stage
Select and approve projects for removal from the active portfolio
Identify and analyze portfolio risks
Develop and monitor portfolio risk responses
Prioritize projects
Balance or align the project portfolio to current prioritization and strategy
Develop and execute portfolio adjustment action plan
Review and report portfolio performance with respect to prioritization and
current strategy
• Review and report portfolio resource alignment with prioritization and
strategy
How Do Small Molecule Drugs Differ from
Protein-based Drugs?
• Size Matters
• Regulatory Differences
• Properties
• Managing Small Molecule & Protein-based Drug R&D
in the Same Company
Small Molecules vs Proteins
Size Matters!
Aspirin 21 atoms
Antibody ~25,000 atoms
Small Molecules vs Proteins
Aspirin 180 da
Antibody ~150,000 da
Small Molecules vs Proteins
Bicycle, ~20 lbs
Business Jet, ~30,000 lbs
Small Molecules vs Proteins
Structure
Small Molecule – any kind of chemical structure
Proteins – macromolecular structures composed of polypeptides chains
Biotechnology and Pharmaceuticals
Vaccines
Biotechnology
Cytokines
Biotherapies
Protein-Based Drugs
• Here, we focus on biotherapies regulated by Center
for Drug Evaluation & Research – protein-based
Vaccines
drugs
CBER
Biotechnology
CDER
Cytokines
Protein-Based Drugs
Governance as of 2003
Some Early Examples of Protein-Based Drugs
Insulin
Glucagon
Growth Hormone
LH, FSH
tPA
EPO
G-CSF
Protein-Based Drugs
Muromonab-CD3 - T cell CD3 Receptor
Abciximab -GP IIb/IIIa
Rituximab - CD20
Infliximab - TNF Trastuzumab - ErbB2
Interferons
Interleukins
TNF
Small Molecules vs. Proteins
Comparison of Properties
Small Molecules
Proteins
MW
Low molecular weight (>1000 Da).
Preparation
Chemical Synthesis
Biologically produced-can be
engineered
Physicochemical
Properties
Mostly well defined
Complex – tertiary structure
– undergo post
transcriptional modifications, e.g.,
glycosylation
Route of
Administration
Oral administration usually possible
Usually administered parenterally
Rapidly enter systemic circulation through
blood capillaries
Reach circulation primarily via
parenteral route: iv, direct; or sc via
lymphatic system
Distribution
To any combination of organs/tissues/cells
Usually limited to plasma and/or
extracellular fluids
Metabolism
Metabolized typically by liver and gut CYPs into Catabolism by proteolytic degradation
non-active and active metabolites
to peptides and amino acids
Serum half-life
Short serum half-lives
Typical Dosing Regimen Suitable for QD or BID dosing
Relatively long serum half-lives
Dosing usually far less frequent
Small Molecules vs. Proteins
Comparison of Properties
Small Molecules
Pharmacology
Species Reactivity
Antigenicity
Clearance
Mechanisms
– Renal excretion
– Hepatic
– Target Mediated
-Intestinal
Drug-Drug
Interactions
Tends to interrupt ligand interaction with its
receptor or enzyme
Proteins
May interact with receptor but the
biologic may BE the ligand (hormone
replacement therapy) or bind to the
ligand, it may be a soluble receptor
(decoy therapy) or may be an enzyme
Generally active in multiple animal species
Relevant and irrelevant animals-models
Non-antigenic, but can show unpredictable
Potential for antigenicity (with MW >
hypersensitivity
10 kDa)
Small molecules and therapeutic proteins do not share clearance mechanisms noncompeting, parallel
Yes
Yes
Biliary excretion
Peptidases
Metabolism (P450, UGT, Sulfotransferases,
etc.)
Rare
Yes
CYP, UGT, etc.
No, due to peripheral administration
Often involves transporters
Pharmacokinetic interactions due to
Less common, less well-defined
competing clearance mechanisms
– Decreasing clearance if there is enzyme
inhibition
– Increasing clearance if there is enzyme
induction
Game Changing Properties
• Biweekly to monthly dosing regimen of Proteinbased Drugs often feasible
– Due to relatively long serum half-lives
– Parenteral administration less of an issue
– Superior to once/twice a day, w/wo meal dosing regimen
of small molecules
– Ensures patient compliance
– protein-based drugs doing well in chronic illness markets,
e.g. diabetes, rheumatoid arthritis
• Fully human antibodies via transgenic mice and
phage display technologies eliminates issue of
antigenicity.
PJ Carter “Potent antibody therapeutics by design” Nat. Rev. Immunol. 2006, 6, p343-357.
Mode of Action
Small Molecules vs. Protein-based Drugs
• Both can be designed to interact with protein-based
target
• The pharmacology of protein-based drugs is
considerably more diverse.
• In lock-and-key model, the protein-based drug
– could be the key, as in hormone replacement therapy,
– could bind to the key (ligand binding) or
– could be an extracellular portion of the receptor, as in
decoy therapy,
– can even have enzymatic activity, e.g. tissue plasminogen
activator (t-PA).
Big Pharma are taking an interest
in Protein-based Drugs
• Twelve top biopharmaceutical companies all have
protein-based drugs in their late stage portfolios,
ranging from 21-66% of their portfolios (avg. 39%).
[22]
WHY?
• Rapid ascendency of protein-based drugs into top
tier of sales
• Protein-based drugs can be found in 80% of WHO
therapy area classes [22]
7/10, 9/20 Protein-based Drugs
in the Top Biopharmaceuticals in 2015
WW
Ranking
(7)
Drug
1
Humira
2
Harvoni
3
Enbrel
Generic Name
adalimumab
Ledipasvir/Sofosbuvir
Etanercept
Type
protein
small molecule
protein
4
Remicade
Infliximab
protein
5
6
7
8
9
10
11
Rituxan
Lantus
Avastin
Herceptin
Revlimid
Sovaldi
Advair/Seretide
Rituximab
protein
Insulin glargine
protein
Bevacizumab
protein
Trastuzumab
protein
Lenalidomide
small molecule
Sofosbuvir
small molecule
Fluticasone/salmeterol small molecule
12
13
Crestor
Lyrica
Rosuvastatin
pregabalin
small molecule
small molecule
14
15
16
17
18
19
20
Neulasta
Gleevec
Xarelto
Copaxone
Januvia
Abilify
Tecfidera
pegfilgrastim
Imatinib
Rivaroxaban
Glatiramer acetate
sitagliptin
Aripiprazole
Dimethyl Fumarate
protein
small molecule
small molecule
protein
small molecule
small molecule
small molecule
2015 Sales
Est. in $
billions (7)
$14.01
$13.86
$8.67
$8.36
Disease Indications
Rheumatoid arthritis
Infectious Diseases (HIV, Hepatitis etc.)
Autoimmune diseases
Psoriasis, Crohn’s disease, ankylosing spondylitis,
psoriatic arthritis, rheumatoid arthritis, and ulcerative
colitis
$7.15
Lymphomas, leukemias, transplant rejection, and
autoimmune disorders
$7.03
Diabetes
$6.75
Various cancers
$6.60
Breast cancer
$5.8
Multiple myeloma
5.28
Hepatitis C viral infection
$5.22
Asthma and COPD
$5.01
High cholesterol and cardiovascular disease
$4.84
Pain
$4.72
Neutrophil stimulation after chemotherapy
$4.66
Multiple cancers
$4.35
Anticoagulant
$4.02
Multiple sclerosis
3.86
Diabetes
3.8
Antidepressant
$3.64
Neuroscience and Mental Health
Managing Small Molecule & Protein-based Drug
R&D in the Same Company
• There are differences between the progression of small
molecules and proteins through the Discovery and
Development stages
Small
Molecules
Target
Discovery
Lead
Discovery
Lead
Optimization
Preclinical
Similar
Lower POS
Longer CT
Lower POS
Longer CT
Shorter CT
Biologics
Capitalization
Costs
Phase 1
Phase 2Launch
Longer CT
Higher Costs
POS = Probability of Success; CT = cycle Time;
• But both can be managed with the same milestones and
stages
• The differences can be dealt with at the project level
• NO NEED TO HAVE SEPARATE SMALL MOLECULE AND
protein-based DRUG DIVISIONS
6. Corporate Behaviors
Topics
A. In-house vs. In-License & In-house vs. Out-license
B. Big vs. Small and the Tendency to Get Big
C. Dealing with Patent Expirations
D. The Sustainable Pipeline
In-license
• An asset may be brought into a company at any stage of
Discovery & Development
• Cost of In-licensing likely to be higher in later stages
Out-License
• It may be more attractive to out-license a project to
get some value for the work
– Insufficient Funds
• No company can do it all
• Need to make choices
– Change in Strategy
• “No longer doing Neuroscience”
– Secondary indications
• May involve disease areas that fall outside corporate
strategy
– Small Start-up Companies
• May lack the funds to bring a drug through late stage
clinical trials
In-Licensing and Out-Licensing
• Both of these functions tend to be managed by the
same group
6. Corporate Behaviors
Topics
A. In-house / In-Licensing & In-house / Out-licensing
B. Big vs. Small and the Tendency to Get Big
C. Dealing with Patent Expirations
D. The Sustainable Pipeline
Big vs. Small
• Big companies – sluggish behemoths
• Small companies – agile but unstable.
• Medium size
– The best of both?
– Unable to survive late stage failures of important
development projects
– Overly exposed to patent expiration of key products
• Employee Perspective re. Individual Responsibility
– Small >> Medium > Big
Tendency to Get Big
• Success in the clinic tends to bring considerable new
revenue to the company.
• Smaller companies tend to invest new revenue back into
company either through increasing spend on R&D or
through acquisitions.
• Larger companies use acquisitions to fill gaps in pipeline
or in corporate strategy and bring new revenues into
company, and reduced impact of patent expirations [46].
• Since 1988 mergers and acquisitions among
biopharmaceutical companies – 42 became 11 [46.]
– Enrich banks and lawyers that participate in merger activities
– Reduce competition and jobs [47, 48].
6. Corporate Behaviors
Topics
A. In-house / In-Licensing & In-house / Out-licensing
B. Big vs. Small and the Tendency to Get Big
C. Dealing with Patent Expirations
D. The Sustainable Pipeline
Dealing with Patent Expirations
• Patent exclusivity – 20 years
– Most marketed drugs begin to suffer patent challenges
from generic companies once they begin to make money
– Companies will try to extend patent exclusivity
• Patenting new formulations
• Patenting new method of manufacture
• Patenting new indications
– If drug is a blockbuster, i.e. billions of dollars in sales, the
company needs to plan ahead for the loss in revenue
– Protein-Based Drugs are now susceptible to generic
competition – biosimilars
Top Biopharmaceuticals in 2015 – Not a stable
list
WW
Ranking
(7)
Drug
1
Humira
2
Harvoni
3
Enbrel
Generic Name
adalimumab
Ledipasvir/Sofosbuvir
Etanercept
Type
protein
small molecule
protein
4
Remicade
Infliximab
protein
5
6
7
8
9
10
11
Rituxan
Lantus
Avastin
Herceptin
Revlimid
Sovaldi
Advair/Seretide
Rituximab
protein
Insulin glargine
protein
Bevacizumab
protein
Trastuzumab
protein
Lenalidomide
small molecule
Sofosbuvir
small molecule
Fluticasone/salmeterol small molecule
12
13
Crestor
Lyrica
Rosuvastatin
pregabalin
small molecule
small molecule
14
15
16
17
18
19
20
Neulasta
Gleevec
Xarelto
Copaxone
Januvia
Abilify
Tecfidera
pegfilgrastim
Imatinib
Rivaroxaban
Glatiramer acetate
sitagliptin
Aripiprazole
Dimethyl Fumarate
protein
small molecule
small molecule
protein
small molecule
small molecule
small molecule
2015 Sales
Est. in $
billions (7)
$14.01
$13.86
$8.67
$8.36
Disease Indications
Rheumatoid arthritis
Infectious Diseases (HIV, Hepatitis etc.)
Autoimmune diseases
Psoriasis, Crohn’s disease, ankylosing spondylitis,
psoriatic arthritis, rheumatoid arthritis, and ulcerative
colitis
$7.15
Lymphomas, leukemias, transplant rejection, and
autoimmune disorders
$7.03
Diabetes
$6.75
Various cancers
$6.60
Breast cancer
$5.8
Multiple myeloma
5.28
Hepatitis C viral infection
$5.22
Asthma and COPD
$5.01
High cholesterol and cardiovascular disease
$4.84
Pain
$4.72
Neutrophil stimulation after chemotherapy
$4.66
Multiple cancers
$4.35
Anticoagulant
$4.02
Multiple sclerosis
3.86
Diabetes
3.8
Antidepressant
$3.64
Neuroscience and Mental Health
$16.00
Changes in Rank Order Worldwide
$14.00
$12.00
World-wide Sales ($ Billion)
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
2010 Sales Est. (4) 2011 Sales Est. (4) 2012 Sales Est. 2013 Sales Est. (1) 2014 Sales Est. (6)
(2&3)
2015 Sales (7)
Patent
Expiration
Humira – Protein
2016
Harvoni – Small
2028
Solvaldi – Small
2028
Remicade – Protein
2015
Rituxan – Protein
2015
Advair Seretide – Small
2010
Enbrel – Protein
2028
Lantus- Protein
2015
Avastin – Protein
2019
Herceptin – Protein
2019
Crestor – Small
2016
Abilify – Small
2015
Cymbalta – Small
2013
Spiriva – Small
2023
Gleevec – Small
2015
Xarelto – Small
2020
Lyrica – Small
2015
Neulasta – Protein
2015
Copaxone – Protein
2015
Revlimid – Small
2019
Januvia – Small
2017
Tecfidera – Small
2030
Nexium – Small
2014
(Lipitor – Small)
2011
Plavix – Small
2012
(Singulair – Small)
2012
Atripla – Small
2015
Diovan – Small
2017
$16.00
Changes in Rank Order Worldwide
Humira – Protein
Harvoni – Small
Solvaldi – Small
$14.00
Lipitor Patent Protection lost in2012
Remicade – Protein
Rituxan – Protein
Advair Seretide – Small
Enbrel – Protein
$12.00
Lantus- Protein
Avastin – Protein
Herceptin – Protein
World-wide Sales ($ Billion)
$10.00
Crestor – Small
Abilify – Small
Cymbalta – Small
$8.00
Spiriva – Small
Gleevec – Small
Xarelto – Small
$6.00
Lyrica – Small
Neulasta – Protein
Copaxone – Protein
$4.00
Revlimid – Small
Januvia – Small
Tecfidera – Small
Nexium – Small
$2.00
(Lipitor – Small)
Plavix – Small
(Singulair – Small)
$0.00
2010 Sales Est. (4) 2011 Sales Est. (4) 2012 Sales Est. 2013 Sales Est. (1) 2014 Sales Est. (6)
(2&3)
2015 Sales (7)
Atripla – Small
Diovan – Small
$16.00
Changes in Rank Order Worldwide
Humira – Protein
Harvoni – Small
Solvaldi – Small
$14.00
Remicade – Protein
Plavix Patent Protection lost in2012
Rituxan – Protein
Advair Seretide – Small
Enbrel – Protein
$12.00
Lantus- Protein
Avastin – Protein
Herceptin – Protein
World-wide Sales ($ Billion)
$10.00
Crestor – Small
Abilify – Small
Cymbalta – Small
$8.00
Spiriva – Small
Gleevec – Small
Xarelto – Small
$6.00
Lyrica – Small
Neulasta – Protein
Copaxone – Protein
$4.00
Revlimid – Small
Januvia – Small
Tecfidera – Small
Nexium – Small
$2.00
(Lipitor – Small)
Plavix – Small
(Singulair – Small)
$0.00
2010 Sales Est. (4) 2011 Sales Est. (4) 2012 Sales Est. 2013 Sales Est. (1) 2014 Sales Est. (6)
(2&3)
2015 Sales (7)
Atripla – Small
Diovan – Small
$16.00
Changes in Rank Order Worldwide
Humira – Protein
Harvoni – Small
Solvaldi – Small
$14.00
Remicade – Protein
Rituxan – Protein
Advair Seretide – Small
Enbrel – Protein
$12.00
Lantus- Protein
Advair Patent Protection lost in2010!
Herceptin – Protein
$10.00
World-wide Sales ($ Billion)
Avastin – Protein
Crestor – Small
Abilify – Small
Cymbalta – Small
$8.00
Spiriva – Small
Gleevec – Small
Xarelto – Small
$6.00
Lyrica – Small
Neulasta – Protein
Copaxone – Protein
$4.00
$2.00
Advair
• combines two lung remedies in one inhaler
• Had been difficult to replicate
Revlimid – Small
Januvia – Small
Tecfidera – Small
Nexium – Small
(Lipitor – Small)
Plavix – Small
(Singulair – Small)
$0.00
2010 Sales Est. (4) 2011 Sales Est. (4) 2012 Sales Est. 2013 Sales Est. (1) 2014 Sales Est. (6)
(2&3)
2015 Sales (7)
Atripla – Small
Diovan – Small
$16.00
Changes in Rank Order Worldwide
Humira – Protein
Harvoni – Small
Solvaldi – Small
$14.00
Remicade – Protein
Rituxan – Protein
Advair Seretide – Small
Enbrel – Protein
$12.00
Lantus- Protein
Avastin – Protein
Herceptin – Protein
World-wide Sales ($ Billion)
$10.00
Crestor – Small
Abilify – Small
Cymbalta – Small
$8.00
Spiriva – Small
Gleevec – Small
Xarelto – Small
$6.00
Lyrica – Small
Neulasta – Protein
Copaxone – Protein
$4.00
Revlimid – Small
Januvia – Small
Tecfidera – Small
Nexium – Small
$2.00
(Lipitor – Small)
Plavix – Small
(Singulair – Small)
$0.00
2010 Sales Est. (4) 2011 Sales Est. (4) 2012 Sales Est. 2013 Sales Est. (1) 2014 Sales Est. (6)
(2&3)
2015 Sales (7)
Atripla – Small
Diovan – Small
$16.00
Changes in Rank Order Worldwide
Humira – Protein
Harvoni – Small
Solvaldi – Small
$14.00
$12.00
Two drugs from Gilead Sciences blasted
onto the scene in 2014 and 2015 both
containing sofosbuvir for Hepatitis C
Remicade – Protein
Rituxan – Protein
Advair Seretide – Small
Enbrel – Protein
Lantus- Protein
Avastin – Protein
Herceptin – Protein
World-wide Sales ($ Billion)
$10.00
Crestor – Small
Abilify – Small
Cymbalta – Small
$8.00
Spiriva – Small
Gleevec – Small
Xarelto – Small
$6.00
Lyrica – Small
Neulasta – Protein
Copaxone – Protein
$4.00
Revlimid – Small
Januvia – Small
Tecfidera – Small
Nexium – Small
$2.00
(Lipitor – Small)
Plavix – Small
(Singulair – Small)
$0.00
2010 Sales Est. (4) 2011 Sales Est. (4) 2012 Sales Est. 2013 Sales Est. (1) 2014 Sales Est. (6)
(2&3)
2015 Sales (7)
Atripla – Small
Diovan – Small
Changes in Rank Order Worldwide
Solvaldi blasted onto Market in 2014
• $16.00
It’s a great drug – for Hepatitis C Viral Infection
• Work nearly 90 percent of the time
• $14.00
With few side effects
• Needs to be taken in combination with other
antivirals
• $12.00
$1,000 per day for all 12 weeks of treatment
• State Medicaid programs can’t afford it
Humira – Protein
Harvoni – Small
Solvaldi – Small
Remicade – Protein
Rituxan – Protein
Advair Seretide – Small
Enbrel – Protein
Lantus- Protein
Avastin – Protein
Herceptin – Protein
World-wide Sales ($ Billion)
$10.00
Crestor – Small
Abilify – Small
Cymbalta – Small
$8.00
Spiriva – Small
Gleevec – Small
Xarelto – Small
$6.00
Lyrica – Small
Neulasta – Protein
Copaxone – Protein
$4.00
Revlimid – Small
Januvia – Small
Tecfidera – Small
Nexium – Small
$2.00
(Lipitor – Small)
Plavix – Small
(Singulair – Small)
$0.00
2010 Sales Est. (4) 2011 Sales Est. (4) 2012 Sales Est. 2013 Sales Est. (1) 2014 Sales Est. (6)
(2&3)
2015 Sales (7)
Atripla – Small
Diovan – Small
Changes in Rank Order Worldwide
Harvoni contains both sofosbuvir and ledipasvir
• $16.00
It already contains another antiviral (more
convenient) so it is displacing Solvaldi
• $14.00
Because these drugs CURE Hep C,
sales are dropping!
• Unmet medical need is dropping
Humira – Protein
Harvoni – Small
Solvaldi – Small
Remicade – Protein
Rituxan – Protein
Advair Seretide – Small
Enbrel – Protein
$12.00
Lantus- Protein
Avastin – Protein
2016
World-wide Sales ($ Billion)
$10.00
Herceptin – Protein
Crestor – Small
Abilify – Small
Cymbalta – Small
$8.00
2017
Spiriva – Small
Gleevec – Small
Xarelto – Small
$6.00
2020
Lyrica – Small
Neulasta – Protein
Copaxone – Protein
$4.00
Revlimid – Small
Januvia – Small
Tecfidera – Small
Nexium – Small
$2.00
(Lipitor – Small)
Plavix – Small
(Singulair – Small)
$0.00
2010 Sales Est. (4) 2011 Sales Est. (4) 2012 Sales Est. 2013 Sales Est. (1) 2014 Sales Est. (6)
(2&3)
2015 Sales (7)
Atripla – Small
Diovan – Small
$16.00
Changes in Rank Order Worldwide
Humira – Protein
Harvoni – Small
Solvaldi – Small
$14.00
Small molecule drugs can still have
a big impact!
Remicade – Protein
Rituxan – Protein
Advair Seretide – Small
Enbrel – Protein
$12.00
Lantus- Protein
Avastin – Protein
Herceptin – Protein
World-wide Sales ($ Billion)
$10.00
Crestor – Small
Abilify – Small
Cymbalta – Small
$8.00
Spiriva – Small
Gleevec – Small
Xarelto – Small
$6.00
Lyrica – Small
Neulasta – Protein
Copaxone – Protein
$4.00
Revlimid – Small
Januvia – Small
Tecfidera – Small
Nexium – Small
$2.00
(Lipitor – Small)
Plavix – Small
(Singulair – Small)
$0.00
2010 Sales Est. (4) 2011 Sales Est. (4) 2012 Sales Est. 2013 Sales Est. (1) 2014 Sales Est. (6)
(2&3)
2015 Sales (7)
Atripla – Small
Diovan – Small
$16.00
$14.00
Changes in Rank Order Worldwide
Patent Expirations will always change
the rank order
$12.00
World-wide Sales ($ Billion)
$10.00
By 2016
14/20 will lose
US Patent
Protection
$8.00
$6.00
$4.00
$2.00
$0.00
2010 Sales Est. (4) 2011 Sales Est. (4) 2012 Sales Est. 2013 Sales Est. (1) 2014 Sales Est. (6)
(2&3)
2015 Sales (7)
Patent
Expiration
Humira – Protein
2016
Harvoni – Small
2028
Solvaldi – Small
2028
Remicade – Protein
2015
Rituxan – Protein
2015
Advair Seretide – Small
2010
Enbrel – Protein
2028
Lantus- Protein
2015
Avastin – Protein
2019
Herceptin – Protein
2019
Crestor – Small
2016
Abilify – Small
2015
Cymbalta – Small
2013
Spiriva – Small
2023
Gleevec – Small
2015
Xarelto – Small
2020
Lyrica – Small
2015
Neulasta – Protein
2015
Copaxone – Protein
2015
Revlimid – Small
2019
Januvia – Small
2017
Tecfidera – Small
2030
Nexium – Small
2014
(Lipitor – Small)
2011
Plavix – Small
2012
(Singulair – Small)
2012
Atripla – Small
2015
Diovan – Small
2017
Alfred Jacob Miller
17 of the Top 20 in 2015
will have fallen away by 2022
Opdivo – Protein
Humira – Protein
Harvoni – Small
Solvaldi – Small
Remicade – Protein
Rituxan – Protein
Advair Seretide – Small
Enbrel – Protein
Lantus- Protein
Avastin – Protein
Herceptin – Protein
Crestor – Small
Abilify – Small
Cymbalta – Small
Spiriva – Small
Gleevec – Small
Xarelto – Small
Lyrica – Small
Neulasta – Protein
Eylea – Small
Copaxone – Protein
Revlimid – Small
Januvia – Small
Tecfidera – Small
Nexium – Small
(Lipitor – Small)
Plavix – Small
(Singulair – Small)
Atripla – Small
Diovan – Small
Imbruvica – Small
Keytruda – Protein
Ibrance – Small
Soliris – Protein
Eliquis – Small
Tecintriq – Protein
Prolia – Protein
Victoza – Small
$16.00
World-wide Sales ($ Billion)
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
2014 Sales Est. (6)
2015 Sales (7)
2022 Sales Est. (8)
6. Corporate Behaviors
Topics
A. In-house / In-Licensing & In-house / Out-licensing
B. Big vs. Small and the Tendency to Get Big
C. Dealing with Patent Expirations
D. The Sustainable Pipeline
Sustainable Pipeline
Sustainable Pipeline – Maintains a steady flow of new
products year-on-year
1. From Within
– Attrition-Based Pipeline
2. By Any Means
– In-licensing
– Mergers and Acquisitions
– Partnerships, Co-Development
– Joint Ventures
The Attrition-Based Pipeline
• If a company wants its internal R&D to supply new
drugs to market, year-on-year, it must account for
attrition in its pipeline.
• Make sure that each stage is at least larger than the
subsequent stage by the percent attrition that
typically occurs at each transition.
The Attrition-Based Pipeline
• A hypothetical pipeline, using industry attrition, that
would provide one launch in a given year.
Based on Brown, D.
and Superti-Furga [19]
The Attrition-Based Pipeline
• A hypothetical pipeline, using industry attrition, that
would provide one launch in a given year.
Based on Brown, D.
and Superti-Furga [19]
78% of the projects would
Need to be in Discovery!
The Attrition-Based Pipeline
• A hypothetical pipeline, using industry attrition, that
would provide one launch in a given year.
Based on Brown, D.
and Superti-Furga [19]
78% of the projects would
Need to be in Discovery!
Not Scalable! If 4 Launches were required
the company would need to begin with
4 X projects in Target Discovery!
Sustainable Pipeline Variants
Sustainable Pipeline – Maintains a steady flow of new
products
1. From Within
– Attrition-Based
– If you can’t scale your R&D pipeline
for attrition, you may not be able to
bring along a new product in some
years
2. By Any Means – fill the gaps
– In-licensing
– Mergers and Acquisitions
– Partnerships, Co-Development
– Joint Ventures
The Sustainable Pipeline
From Within vs. By Any Means
Top 12 companies in 2009 – “Self-Originated” Late Stage
Project: 0-44% of portfolio (avg. 25%)
Top 12 in 2009
Pfizer
Roche
Novartis
Sanofi-Aventis
GlaxoSmithKline
Johnson & Johnson
AstraZeneca
Merck
Eli Lilly
Bristol-Meyers Squibb
Takeda
Amgen
[41] Deloitte and Thomson Reuters, (2010) R&D Value Measurement, Is R&D Earning its Investment?,
www.deloitte.com/assets/Dcom-UnitedKingdom/…/UK_LS_RD_ROI.pdf
The Sustainable Pipeline
Sustainable Pipeline – Maintains a steady flow of new
products
1. From Within
– Attrition-Based
2. By Any Means
