campbell wilson

Industry-academia co-operation to sustain innovation in drug discovery

BioDundee 30 May 2012

Campbell WilsonAstraZeneca

The Perfect Storm

REGULATORYHURDLES

PATENT EXPIRIES

PRICING &REIMBURSEMENT

The Perfect Storm for Pharma

Patent Expiring in 2011

Condition Company 2010 U.S. Sales

Lipitor cholesterol Pfizer $5,329,000,000

Zyprexa antipsychotic Eli Lily $2,496,000,000

Levaquin antibioticsJohnson & Johnson

$1,312,000,000

Concerta ADHD/ADDJohnson & Johnson

$929,000,000

Protonix antacid Pfizer $690,000,000

The Patent Cliff

Patent Expiring in 2012

Condition Company 2010 U.S. Sales

Plavix anti-plateletBristol-Myers Squibb /Sanofi-Aventis

$6,154,000,000

Seroquel antipsychotic AstraZeneca $3,747,000,000

Singulair asthma Merck $3,224,000,000

Actos type 2 diabetes Takeda $3,351,000,000

Enbrel arthritis Amgen $3,304,000,000

Clinical success rates

2004-2011 success rate from Ph I to FDA approval is: 6.7% for oncology12.1% for other indications

Health Technology Assessment Agency reimbursement decisions

Disease Recommend Decision

Recommend R* Decision

Not recommended

Decision

Total Decisions

Cardiovascular 23

(36%)

27

(42%)

14

(22%)

64

(100%)

Cancer 29

(22%)

52

(40%)

49

(38%)

130

(100%)

Total decisions 52

(27%)

79

(41%)

63

(32%)

194

(100%)

*R = Recommended decision with restriction to clinical classification or patient group.Source – Health Economics Consortium, 2008

Impact on the pharmaceutical industry AstraZeneca 2011 annual results

Core Operating Profit 13,167 13,603 -3% -4%

Revenue 33,591 33,269 +1% -2%

Core EPS $7.28 $6.71 +9% +7%

Reported EPS $7.33 $5.60 +31% +29%

Full Year Dividend $2.80 $2.55

CERgrowth

2011$m

Actualgrowth

2010$m

•Fewer successful product launches

•Negative growth

•Long term sustainability of pharma operating model questioned

Pharma’s response

Cost constraints

Divert resources to filling and progressing late-stage pipeline

Consequential reduction in resourcing of drug discovery

Pharma’s challenge

How do we secure long-term sustainability through innovative drug discovery?

Pharma’s challenge

Creative collaboration!

Collaboration models

- the old and the new

• Pharma and academia share resources, risk and reward

• Payment for successful outcomes rather just for the work being done

• Significant success means significant reward

• Hand-back rights to academic partner if Pharma does not prosecute

• Pharma contribution in kind such as access to compound collection

• Pharma fully funds• Pharma retains all rights• Pharma reaps all commercial

benefit

AstraZeneca-Cancer Research TechnologyStrategic Alliance in Cancer Metabolism

TargetValidation

Assay Development HTS Hit-to-Lead

Early Lead Optimisation

Joint project acceptance via JMT. Project managed by JPT

CRT show selected targets in theme area

Joint activities within a JMT managed portfolio of projects with 50/50 resourcing (approx. 30 FTE in total)

Project passes to AZ but monitored via JMT until enters AZ Development

Deal terms – financial structure

• Access fee - in recognition of AstraZeneca gaining access to CR UK’s network of scientific investigators in cancer metabolism

• Each party covers its own costs

• Success based milestone payments- Each project start (start of screening)- Each project that successfully delivers (adopted by AZ)- Formal entry to AZ Development- Clinical development milestones through to launch

• Royalty on product sales

Rejected Target

Selected Target MRC Screen

Ex

erc

ise

Op

tio

n1

£2

0K

Op

tio

n F

ee

AZ pursue – Research Collaboration / licence

orAZ & MRC pursue jointly Research Collaboration

MRC can screen up to 5 Rejected Targets using the AZ CC – AZ retains Options 1&2

Re

jec

t O

pti

on

1

Hit from MRC CC•No further obligations to AZ•AZ assigns interest in joint results

Hit from AZ CC•AZ grants use of joint results / AZ compound to allow MRC to perform H2L chemistry•AZ retains Option 2

H2L C

hemistry

Ex

erc

ise

Op

tio

n 2

Study / licence

•AZ licence joint results& MRC compound if required

£2

0K

Op

tio

n F

ee

Reject Option 2

MRC pursue

•AZ assigns interest in joint results•MRC licence AZcompound if required

AZ – MRCTModel

The future?