A Pharma perspective on healthcare
needs and innovation in drug
discovery
Patrick Vallance
Head of Drug Discovery
GlaxoSmithKline
A New Mindset
“We need to adopt a new mindset.
We in big pharma should never take
for granted our right to exist; our business model
is not written into any country’s constitution.
So we should be turning up to work every day
with the mindset that we are earning the right to exist.
We are earning it by meeting the expectations of society.
When you start to think like this,
you see the world differently.“
Andrew Witty, CEO, GlaxoSmithKline – Harvard, February 2009
Public trust is low
Science in Society – DTI MORI 2005
The Challenges are Significant
In the past 20 years modern drugs have revolutionised the practice of
Medicine and the outlook for patients
The unmet need remains high
The bar is also high
placebo
changing expectations
cost
the public health agenda
Fabry’s Disease
Pain throughout the body
Impaired sweating
Heat/cold intolerance
Skin rashes (angiokeratomas)
Corneal whorling
Hearing problems
Gastrointestinal problems
Heart problems
Kidney problems
Nervous system problems
Psychological issues
Large improvement in pain in Fabry’s Disease
Large improvement in pain in Fabry’s Disease
Active
Placebo
The Challenges are Significant
In the past 20 years modern drugs have revolutionised the practice of
Medicine and the outlook for patients
The unmet need remains high
The bar is also high
placebo
changing expectations
cost
the public health agenda
R&D for a New Medicine: 10+ years, $1 bn+
… a big challenge for addressing both developed and developing world diseases
Preclinical
3 – 6 Years
250
Scale-Up to
Manufacture
PostMarketing
Surveillance
Phase
III
5
1
Approved
New
Medicine
IND Submitted
Pre-Discovery
Phase Phase
II
I
~ 5,000 –
10,000
Compounds
Regulatory
Review
Clinical Trials
Number Of Patients /
Subjects
20 –
100
100 – 500
1,000 –
5,000
6 – 7 Years
NDA Submitted
Drug
Discovery
0.5 – 2
Years
Indefinite
Sources: Drug Discovery and Development: Understanding the R&D Process, www.innovation.org; CBO, Research and Development in the Pharmaceutical Industry, 2006
R&D Productivity Gap
60
$55
53
$54
45
40
30
26
30
27
25
$26
22
20
10
$39
35
28
$12
$13
$13
$15
$17
$19
40
$43
39
$21
$30
24
$32
$33
$39
35
31
30
25
21
$23
18
17
20
18
14
15
10
5
0
92
93
94
95
96
97
98
New Drug Approvals (NMEs)
Source: Burrill & Company; US Food and Drug Administration.
Note: NMEs do not include BLAs
99
00
01
02
03
04
05
06
PhRMA Member R&D Spending
07
0
Pharma R&D ($ billions)
New Drug Approvals (NMEs)
50
50
The realities of having the best pipeline
Lehman Brothers PharmaPipelines (Sept 2007)
Pharma Replacement Power – NPV
GlaxoSmithKline
Merck
Bristol Myers Squibb
Novartis
Johnson & Johnson
Sanofi-Aventis
AstraZeneca
Pfizer
Wyeth
Eli Lilly
Roche
Abbott Labs
Schering Plough
AVERAGE
Pipeline renews
60% of sales
0.0x
0.1x
0.2x
0.3x
0.4x
0.5x
LB Method: [NPV of recent launches (06-07) + NPV of pipeline opportunities from ‘08-’13] / NPV of products marketed before 2006.
0.6x
0.7x
R&D for a New Medicine: 10+ years, $1 bn+
… a big challenge for addressing both developed and developing world diseases
Preclinical
3 – 6 Years
250
Scale-Up to
Manufacture
PostMarketing
Surveillance
Phase
III
5
1
Approved
New
Medicine
IND Submitted
Pre-Discovery
Phase Phase
II
I
~ 5,000 –
10,000
Compounds
Regulatory
Review
Clinical Trials
Number Of Patients /
Subjects
20 –
100
100 – 500
1,000 –
5,000
6 – 7 Years
NDA Submitted
Drug
Discovery
0.5 – 2
Years
Indefinite
Sources: Drug Discovery and Development: Understanding the R&D Process, www.innovation.org; CBO, Research and Development in the Pharmaceutical Industry, 2006
A disconnect between discovery and invention?
Scientific publications
in biomedicine
New
Medicines
The opportunity has never been greater
Reintroduce Scientific Judgement
Evolution From Monolith
External
Resources
CEEDD
Virtualization
of Drug
Discovery
CEDDs
Internal
Resources
Pharma
Centralized
Control/Management
De-Centralized
Control/Management
How should we choose where to invest discovery
effort?
External
Scientific
Opportunity
Market size
Internal
Pipeline strength
Organisational
structure
Patient need
The Market
2006 Estimated Global Sales
90,000
80,000
60,000
39,910
19,481
26,875
17,793
10,000
11,549
20,000
15,337
43,928
30,000
65,275
40,000
76,850
50,000
18,808
Global Sales $m
70,000
The Lehman Brothers analysis of
predicted global sales for 2006 does
not include generic drugs and
estimates that their database captures
80% of branded drug sales.
0
2005 - 2010 Market Growth p.a.
18%
16%
Diabetes, cancer and
inflammation projected to
be the biggest growth
opportunities
14%
12%
10%
8%
6%
4%
2%
0%
Source: Pharma Pipelines – Strategic Analysis and Conclusions 2006 – Lehman Brothers
Public Funding
How should we choose where to invest discovery
effort?
External
Scientific
Opportunity
Market size
Internal
Pipeline strength
Organisational
structure
Patient need
Small integrated, empowered teams
Pharma partnerships
New/expanded in
2008/2009 YTD
35 external
engines
35 internal
engines
Corporate
Venture Fund
R&D for a New Medicine: 10+ years, $1 bn+
… a big challenge for addressing both developed and developing world diseases
Preclinical
3 – 6 Years
250
Scale-Up to
Manufacture
PostMarketing
Surveillance
Phase
III
5
1
Approved
New
Medicine
IND Submitted
Pre-Discovery
Phase Phase
II
I
~ 5,000 –
10,000
Compounds
Regulatory
Review
Clinical Trials
Number Of Patients /
Subjects
20 –
100
100 – 500
1,000 –
5,000
6 – 7 Years
NDA Submitted
Drug
Discovery
0.5 – 2
Years
Indefinite
Sources: Drug Discovery and Development: Understanding the R&D Process, www.innovation.org; CBO, Research and Development in the Pharmaceutical
Leading the pack – ATM Index
Source: Access to Medicines Index (Innovest)
DDW Partners – Tres Cantos