ISPE GxP Expo
“The changing Biotechnology Model, From Lab
Bench To Commercial Product Launch; An
Evolving Paradigm”
Topics & Bio’s
Surviving in Tight Economic Times
Del Stagg - Regulatory Affairs & Quality Consultant
Capital Starvation – How To Survive The “Lean” Years
Andrew Norris, BCN Bio, President
Partnering with Big Pharma and Big BioTech
EJ Brandreth, Althea Technologies, Vice President, Quality
A Case Study - Amgen's Application Portfolio
Steve Thompson, Amgen, Director, Information Systems
Surviving in Tight Economic
Times
Del Stagg, PhD
Consultant in Regulatory and
Quality
Surviving in Tight Economic Times
1. Understand Your Goals And Timelines
2. Understand The Costs For Reaching
Goals
3. Understand The Process
Surviving in Tight Economic Times
1. Understand Your Goals And Timelines
•
Innovative product – vs. –
The next generation of an existing product
•
Experienced management team – vs. –
Scientists who generated the product
•
Intermediate milestone goals within the
development plan – vs. –
Plan for commercialization
Surviving in Tight Economic Times
• Innovative product – vs. –
The next generation of an existing product
• Innovative products often require new methods
to demonstrate clinical effectiveness and need
careful evaluation of new safety concerns
• Next generation products already have defined
efficacy and safety endpoints and this usually
makes development easier
• Product Quality is usually better understood for
Next Generation Products vs. New Products
Surviving in Tight Economic Times
• Experienced management team – vs. –
Scientists who generated the product
• Academic Scientists are brilliant, but often have
difficulty understanding the time, costs or
regulatory environment for developing a product
from the laboratory to clinical to commercialization
Surviving in Tight Economic Times
• Intermediate milestone goals within the
development plan – vs. –
Plan for commercialization
• All Development Programs have intermediate
milestones that have to be reached prior to
moving the program forward.
• These milestones need to be identified early and
recognized as significant achievements to provide
the development team a measure for progress
and a sense of accomplishment
Surviving in Tight Economic Times
2. Understand The Costs For Reaching
Goals
•
Time
•
Resources
•
Regulatory Environment
Surviving in Tight Economic Times
• Understand the Time
• Product development
• 12-15 year average from lab to commercialization
• 5 – 7 years in the best of circumstances
• Product characteristics and manufacturing
• Analytical Methods, Formulation Development and
Scale-up Manufacturing
• Preclinical safety prior to human clinical studies
• Preclinical Tests required prior to going to Humans
• Human clinical studies
Surviving in Tight Economic Times
• Understand the Resources needed
• The development cost is $ 500 – 2,000 million
• The costs for a specific product is
• Product Development
2,000,000
• Preclinical Safety
• Clinical Development
500,000,000
• Phase 1
• Phase 2
• Phase 3
$
385,000,000
$
0.5 -
$
2.5 - 3,000,000
$ 300 -
$
500,000
$ 10,000,000
$ 300,000,000
• The commercial manufacturing plant $
30,000,000
Surviving in Tight Economic Times
• Understand the Regulatory Environment
• Regulatory Agencies are “Risk Adverse”
• FDA “Review Team” of Regulatory Scientists
• Review the entire Application within 10 Months
• Decide on whether the data supports approval to use
the product and the risks associated with its use.
• Because of continued “Off Label” use of
products the FDA has to consider these risks in
labeling.
Surviving in Tight Economic Times
3. Understand The Process
•
Quality of product and development plan
•
•
•
•
Has the Management Team developed products before
Test Results are only as good as the product used to
generate the data
How easy is it to make the product and scale up from the
lab bench to supplies for GLP and Clinical studies
Safety to patients and employees
•
Safety of the patient always comes first
• Always weight the Benefit/Risk Ratio (always +)
• 1st Dose Risk should not be more than taking aspirin
Surviving in Tight Economic Times
• Improving Your Odds For Success
• Frankly Assess Your Goals and Resources
• Find and Hire Senior Staff Members who have
Successful Product Development Experience or • Find and Contract with Experienced Professionals who
can fill Gaps in your Organizations Staffing
• Set Milestones to measure progress of the development
program and • Celebrate when Milestones are reached to maintain the
drive to reach goal
Surviving Lean Times
Venture Capital Investment
Historical Trend
Historical Trend
First Quarter in 2009
• Venture capital investment plummets in Q1
2009 to 12 year low
• In the Life Sciences sector (Biotechnology
and Medical Devices):
• 40 percent decline in terms of dollars
• 31 percent drop in deals
• $989 million going into 133 rounds
• Investment fell in Q1 2009
• Biotechnology fell 46 percent to $577 million
• Medical Device fell 27 percent to $412 million.
Biotech IPO
• Harsh Economy Thwarts Biotech IPO
• Last biotech IPO: November 2007
• National Venture Capital Association poll:
• 96% of venture capitalists said it will be harder
for new companies to get funded in 2009
• Many VCs anticipate a slowdown in early stage
investment, due to the closed exit market and a
lack of money at VC firms to invest in new
projects.
That’s What’s So!
What’s Ahead?
 History does not repeat itself but it
rhymes
Changing times/vs. lean times
1973
Gas Crisis
1980
Savings
& Loan
2001
Dot Com
2007
Housing
2009
Changing times/vs. lean times
1973
Gas Crisis
1980
Savings
& Loan
2001
Dot Com
2007
Housing
2009
Changing times/vs. lean times
Some changes that we predict may
come out of this economic shift that
may shape the future of the industry
includes:
Businesses that are an asset (short
term)
De centralization of business
Globalization of business
Asset based businesses
Liability
Asset
(Expenses greater
Than Income)
(Income greater
Than Expenses )
Most early stage
Biotechnology
Companies
Asset based businesses
An Economic comparable.
(Leveraged vs. not so leveraged
businesses)
Mortgage backed securities.
Decentralization
Research &
Development
Royalty/
Income
Innovations
Products &
Services
Intellectual
Property
Licensing
Marketing
Decentralization
Research &
Development
Royalty/
Income
Innovations
Products &
Services
Intellectual
Property
Licensing
Marketing
Decentralization/ Virtualization
Research &
Development
Chemistry
MOA
Pre
Clinical
Testing
PK
ADME
Tox
Globalization
Globalization
Globalization
Globalization
• In 10 years it is predicted that the number one
English speaking country in the world will be
China.
• 100% of college graduates in India speak English.
• More than 70% of US 4 year olds have used a
computer.
• More than 50% of US 21 year olds have created
content on the web.
• 1 out of 8 couples married in the US met on line.
Summary: Strategies for Survival
•
•
•
•
Asset Model (Services etc.)
Decentralization
Restructuring
Government Funds for Innovation
Outsourcing
• More than a trend, means for survival
• CRO (Contract Research Organization's )
• Effective method for limiting R&D costs
• R&D services
• Drug formulation and devlopment
• CMO (Contract Manufacturing Organizations)
• Advantages over in-house manufacturing
• Existing infrastructure in place (for scale up,
validation, clinical trials)
• Lower cost, greater flexibility
Outsourcing Growth
• Growth estimated at 16% per annum over
the next five years, and is driven by:
• Changing demands of clinical trial outcomes
and consequential changes in practice
• Demand for more specialist, niche, service
providers
• Greater demand for global inclusion
• Higher regulatory and safety expectations
Outsourcing
• Cost and other pressures on large
pharmaceutical and biotech
companies together with the
emergence of reputable and
financially stable service providers
has made outsourcing more
acceptable.
Outsourcing
• Factors in deciding where to
outsource:
• Market access
• High availability of researchers
• Access to specialized R&D knowledge
and results
• Macroeconomic and political stability
Outsourcing
• Growth in outsourcing over the last 10
years.
• Current trends (what types are most
common).
• What % is in the country and what %
outside (in the most general sense).
• What are the advantages.
• Overseas outsourcing.
Partnering with Big Pharma
E.J. Brandreth
Vice President, Quality and Regulatory
Affairs (Althea Technologies)
Partnering with Big Pharma
1.
2.
3.
4.
5.
Overview
Strengths
Weaknesses
Opportunities
Threats
Partnering with Big Pharma
1. Overview
• Current economic conditions are ideal
for partnering activities
• Lack of available venture capital
• Need for larger pipelines while reducing
R&D expenses
Partnering with Big Pharma
2. Strengths- Pharma provides
• Depth of resources
•
•
•
•
•
Technical (Process, Analytical Development)
Marketing
Distribution
Regulatory
Vendor Leverage
Partnering with Big Pharma
• Strengths- Biotech provides
• Clinically Developed Product
• Innovation
• Technical Specialists
Partnering with Big Pharma
3. Weaknesses – Big Pharma
• Big Pharma procedures are entrenched,
long review cycles
• Culture clashes
• Lack flexibility
Partnering with Big Pharma
• Weaknesses -Small Biotechs
• Ill-defined processes
• Risky raw material controls
• Islands of critical knowledge-one or
two key scientists
Partnering with Big Pharma
4. Opportunities – Big Pharma
•
•
•
Rapidly Increase pipeline
Rapidly Increase technology platform
Rapidly gain earnings
Partnering with Big Pharma
• Opportunities – Small Biotech
• Stay in business
• Increase pipeline-continue to innovate
• Gain free assistance/expertise with
challenging issues
• Raw materials, regulatory, analytical,
process, facilities
Partnering with Big Pharma
5. Threats- Big Pharma
•
Hidden issues surface after deal
•
•
•
Need thorough Due Diligence
Competitors and Bidding War
If partnering with a small biotech with an
approved drug, look into 3PL sales; a
strong Q1 could be due to sales for entire
year
Partnering with Big Pharma
• Threats- Small biotech
• Small Bios should be aware of the
preferred options of bigger companies
• Find a financially depleted company, and
• Buy the IP for pennies
• Buy the company for pennies
• Partner, but eventually take over the
company
• Partner for the long run
Partnering with Big Pharma
• Threats- Small biotech
• Risk Management- Will the partner pay
you $20M for a promising Phase II drug,
or wait and pay you $100M for a
confirmed Phase III drug?
• Be aware that big Pharma can likely
manufacture the drug for less cost, and
will want to do so
Partnering with Big Pharma Example
Tarceva Deal
Activity
Genentech
Licensure
OSI
Shared
100%
No
Marketing, Launch. 100%
Promotion/Sales
<75% US,
No
>25% US
Yes
100%
No
100% ROW
Manufacture/
Supply US
Manufacture ROW
Ph IV Development
100%
No
Yes
Partnering with Big Pharma
Conclusion
• Many benefits for both parties
• Be aware of the risks/benefits and
related intentions on both sides of the
table
• Negotiate a contract which assures longterm survival of the Small Biotech while
boosting Big Pharma’s earnings
Application Portfolio
Steve Thompson
Amgen
Key discussion points (Agenda)
• Expectations need to be set, and myths need to be
clarified
• Application Portfolio Management requires a
framework and sustainable process that delivers
the ability to consistently assess, measure, and
report application value
• Looking at applications from different perspectives
identifies retirement candidates and critical
applications that don’t/do deliver Business Value
• Total Cost of Ownership (TCO) can be leveraged
to rationalize Business / Data Value
Information Systems owns very little
data
• Myths
• Can’t delete / destroy data
• Have to keep the application running
• Archival patterns provides options to
maintain records
• The record retention schedule must
be adhered to
Application Portfolio Program
Primary purpose is to establish an overall
framework and sustainable process that
will:
• maximize IS value,
• minimize costs, and
• ensure application alignment with business
and compliance drivers.
Application Portfolio Management
includes a framework, key inputs, &
sustainable process
Security & Compliance
Policies & Standards
Assessments
Architecture
Technology Roadmaps
PROCESS
• Asset Inventory
Application Lifecycle
• Asset Classification
• Asset Appraisal
• Portfolio Rationalization
• Portfolio Management & Governance
Client Facing IS groups
IS Goals
Business Process Maps
Application Roadmaps
5 criteria used to score and profile
each application
1.
Cost
2.
Business Value
3.
Data
4.
Technology
5.
Risk
Total Cost of Ownership (TCO)
includes infrastructure, software,
licensing, and resource costs
Aligned with business goals and
provides a good Return On
Investment
Data has integrity, is compliant
(Record Retention Schedule),
secure, and complete
On-target with Standards and
charting to technology roadmap
Risk is acceptable based upon all
areas of compliance including nonregulated areas and adherence to
Amgen/IS policy and standards
The IS Quality System is managed as a product and sets
the foundation for compliance and best practices
Assessing applications from different
perspectives identifies retirement
candidates
•
Low Hanging Fruit are systems that can be retired
immediately, and the decision is basically unanimous
between IS and business
• Rapid retirement are systems that can be retired but may
take a few months or more duration to complete
• Larger cost savings may require more time to assess &
develop a mutually agreed upon strategic solution. For
example:
• Tracking systems
• Laboratory automation
• Document management
•
•
Right sizing storage can show big saving potential
Infrastructure consolidation results in less components and
lower costs
• Implementing a sustainable process can keep a portfolio
under control
There are several ways to assess an
application
•
•
•
•
•
•
Number of users
Performance
Total Cost of Ownership
Cost to remediate to comply
Application Clusters (redundancy)
Environments (DEV / TEST / PROD)
Total Cost of Ownership (TCO) is
used to quantify and prioritize
investment
•
•
•
Annual Support Costs (people to support & maintain the system)
Server costs distributed over the life of the hardware
Software depreciation costs (initial investment)
•
•
•
•
Includes hardware, database licensing, support, and management
services)
You must include the overhead for development, test, and production
environments
Development, Test, and Production environments will multiply costs
Annual Storage Costs can be significant when “requested” storage
costs are incurred versus “actual used” storage costs
Questions??
ISPE GxP Expo
“A Facility Perspective on The Current Economic Situation:
How Facilities are Coping
– A Panel Discussion”
Panelists:
Dan Borton – Sr. Manager for Global Strategic Sourcing, Amgen
Donna Tseng, Manager Process Engineering, Baxter HealthCare
Teresa Berry, Director, Facilities, Avid Bioservices,
James Page, Director Corporate Facilities, Amylin Pharmaceuticals,
Key Topics:
1.
What are some of the issues, challenges, and opportunities facing facilities in the
next 3-5 years?
2.
What or who are the change drivers within each prospective industry/area?
3.
What is being done regarding these change drivers?
Questions?