ngp eu 7
DESCRIPTION
Next Generation Pharma US magazine. Issue 7. April 2009. Surviving the storm: how to stay afloat in troubled financial waters. Plus the latest on Lean, and the challenges of setting up international clinical trials.TRANSCRIPT
www.ngpharma.eu.com • Q2 2009
RIDING THE WAVEBernhard Kirschbaum surfsthe financial downturnPage 34
NICHE MARKETShire carves out a specialplace in big pharmaPage 40
CHANGE MANAGEMENTWhy restructuring is the wayforward for GSKPage 86
CLOSED DOOR POLICYJustin van Gennep examinesthe increasing power of payorsPage 138
STORMWeathering the
How will the European pharmaceutical industryavoid getting soaked by the recession?
Page 28
COVER NGPEU7 v3:apr09 08/04/2009 14:11 Page 1
FROM THE EDITORRough weather aheadHow will the industry stay afloat in turbulent times?3
“In our setting, there is no need to dosomething that helps in the short termbut which in the long term would be amistake” Bernhard Kirschbaum, EVP of R&D for MerckSerono (Page 34)
“We’re projecting to hire in 2009 in aprudent way. It’s completely justified bythe growth of the business” Sylvie Grégoire, President of Human GeneticTherapies, Shire (Page 40)
“We’re making changes that will makeus stronger. If we don’t make them now,we’re not going to be standing when it’shavoc in the industry” Moncef Slaoui, Chairman of R&D, GSK (Page 86)
It’s been a tough few months for the pharmaceutical industry, on both sidesof the Atlantic. Mergers, layoffs, cost-cutting exercises – it seems we are not
immune to the stormy effects of the global financial crisis after all.
Or are we? The main merger and layoff activity so far has been centred on
American companies. Pfizer/Wyeth and Merck/Schering-Plough are all US-
based, with Roche/Genentech being the obvious exception. The Pfizer/Wyeth
merger alone will result in the loss of 20,000 jobs.
By contrast, some European companies seem to be doing rather well. Late
last year, Novartis said its profit had reached €6.2 billion and that sales had
increased nine percent. The company also boasts the largest cash reserves
among the big players – €11.4 billion.
German drugmaker Boehringer Ingelheim has invested €1.73 billion in re-
search and development in the last year, and has added 400 new employees.
Shire, with headquarters in both the UK and the US, has hired 2500 people in
the last three years.
This is no time to be smug, however. As the latest report from
PricewaterhouseCoopers points out, big pharma’s strategy of putting all its
money on a few molecules and turning them into blockbusters looks to be run-
ning out of steam. Productivity in the lab will drop sharply as companies turn
their attention to more unusual or complex diseases in an attempt to replace
drugs going off patent. The report also quotes estimates that generic erosion
will knock between two and 40 percent off the revenues of the top 10 compa-
nies between now and 2015.
No matter how relatively secure we feel in Europe, watching as events un-
fold across the ocean, we can’t escape the fact that the pharmaceutical indus-
try is international. We too will face our own patent expiries and will find
ourselves staring the dearth of new blockbusters in the face. It may not be on
quite the dramatic scale that we’ve seen in the US, but change is coming,
whether we like it or not.
Depending on how you look at it, this is either the time to take bold
risks – when there is little to lose – or to hunker down and protect what
we’ve got. Perhaps the best strategy will be a little of both: look after our
core assets, but at the same time embrace new opportunities. It will be in-
teresting to see which companies master the art of staying afloat in the trou-
bled waters of 2009.
Marie Shields
Editor
EDITORS NOTE:apr09 08/04/2009 14:19 Page 3
28
34
5CONTENTSFEATURES
Standing out fromthe crowdShire carvesa recession-defyingniche
86
Riding the waveWhy BernhardKirschbaum isn’t worriedabout the crisis in thefinancial markets
Sink or swimHowwill we keep our heads above water in the wake ofthe financial downturn?
40
Ringing the changesHow Moncef Slaoui is radical-ly restructuring GSK’s R&D
CONTENTS NGPEU7:jan09 8/4/09 13:44 Page 5
59
CASE STUDY
32 Dave Champagne, ThermoFisher Scientific
76 Slim down, tone upNovartis’Steve Dreamer explains why Lean
works in continuousmanufacturing
92 Leaping ahead in translationalmedicineAmgen’s Brian Kotzin translates science into
medicine
102 Building relationships around theglobeJoan Shen extols the benefits of international
clinical trials
116 The genetic advantageAllen Roses on using pharmacogenetics to
make clinical trials more efficient
126 Pest controlHow an ad featuring a rat helped theMHRA
raise awareness of counterfeit medicines
INDUSTRY INSIGHT
52 Martin Svantesson,Geodis Wilson70 Patrick Boosyut, Siemens114 Jeff Spitzner, Rescentris130 Zheng Wang, MPI Research132 Martin Crockard, Randox134 Andrew Reaume, MeliorDiscovery Inc138 Justin van Gennep,Innovex
ASK THE EXPERT
90 Waters98 Ethan Smith, Metastorm100 Richard Lake, RestekCorporation106 Peter Duncan, Definiens AG118 Robertus van Miltenburg,Roche Diagnostics122 Gerd Maass, RocheNimbleGen124 Kamni Vijay, Bio-RadLaboratories128 Jean-Luc Tardieu, CisbioBioassays146 Sybille Queißer, sellxpertGmbH & Co KG
7CONTENTSMANUFACTURING, RESEARCH AND DEVELOPMENT
44 Cut down, collaborate and focuson the customerPfizer’s Kim Sendall is busy designing the
manufacturing facility of the future
54 New concepts in risk controlBayer’s Helmut Mothes examines the success
of Leanmanufacturing
64 Turbulence aheadSammy Rashed on ensuring supply chain se-
curity in these stormy financial times
138 Justin van Gennep
ROUNDTABLE
59 Contract manufacturingWith Grindeks’ Lipmans Zeligmans,Anders Ulfhielm of Rechon Life Scienceand Jim Kernan of PharmaFlow Ltd
72 OutsourcingWith Piramal Healthcare’s Aidan Walker,Aesica Pharmaceuticals Ltd’s KeithPayne, Shasun Pharma Solutions Ltd’sKevin Cook and Fine Organics Ltd’sKeith Hanson
83 Supply chainWith Jean Bédard of AlternativesTechnologie Pharma Inc and RichardHarrop of SCA Cool Logistics
109 Drug discoveryWith Simon Wood of STARLIMS Corporationand Ed Addison of TeraDisc
114 Jeff Spitzner
CONTENTS NGPEU7:jan09 9/4/09 08:11 Page 7
148
IN THE BACK152 Travel 154 In review 156 Profile: Janez Potocnik158 Events 160 Final word: John Singer explains why this is agood time for creative leadership
152
9CONTENTSMARKETING AND TECHNOLOGY
PLAT I N UM S P O N S O R
Philippe Goix
EXECUTIVE INTERVIEW
50 Manfred Zurkirch,Divdella AG96 Xavier Cristina,Applied Biosystems112 Andreas Persidis,Biovista Inc120 Philippe Goix, Singulex Inc144 Sati Sian, IMS Health
120
136 Patient powerIsabelle Mercier explores the power of patient
influence inmarketing
141 The grass is always greenerAstroturfing and big pharma
142 Down but not outFrost & Sullivan’s latest survey showsmar-
keters are not giving up the fight
148 Virtual realityHow telepresence is changing the way we
do business
CONTENTS NGPEU7:jan09 8/4/09 13:45 Page 9
Chairman/Publisher SPENCER GREEN
CEO JAMES CRAVEN
Director of Projects ADAM BURNS
Editorial Director HARLAN DAVIS
Editor MARIE SHIELDS Managing Editor BEN THOMPSON
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MILNE, JULIAN ROGERS, HUW THOMAS
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CREDITS NGPEU6:apr09 08/04/2009 14:17 Page 10
12 www.ngpharma.eu.com
FRONTLINE12
DON’T LET THEBED BUGS BITE
hosts, in places likemattress
seams, crevices in the bed, be-
hind the headboard and
loose wallpaper.
Fromwhatwe
know, bedbug
bites tend to be
more of an irritant
than anything, al-
though they can cause
some skin reactions.
However, their potential to serve
as ‘disease vectors’and howbest
for thousands of years.
Infestations are rising fast;more
so in developed coun-
tries, probably due to
international travel,
immigration,
changes in how
pests are con-
trolled and insecti-
cide resistance, wrote
the study’s authors.
Bed bugs prefer to hide
within a fewmetres of their
Bedbugsprefer tohidewith ina
of their hostsfew feet
A US STUDY looking at the
available evidence on bed bugs
found that while they are high-
ly resistant to a number of
methods of extermination, they
are likely to be more of a nui-
sance than a serious health
problem. However, the possi-
bility that they could one day
be vehicles for disease needs
further research.
The bedbug (Cimex lectular-
ius) has been a humanparasite
UPFRONT NGP EU7:nov08 8/4/09 13:30 Page 12
13www.ngpharma.eu.com
13FRONTLINE
trol articles from 1960 to 2008.
They also didmanual searches
for older texts in jour-
nals, textbooks,
trade journals and
newspapers from
1892 to 2008.
For the clini-
cal studies, they in-
cluded original
accounts of bed bug in-
vestigations that had enough
detail of cause and effect be-
tween the insect bites and clini-
cal effects and sufficient evi-
dence that bed bugswere the
source of the bites.
The researchers found 53
articles thatmet these criteria,
but only found two clinical trials
that tested the ability of pest
control interventions to eradi-
cate the insects. They also found
that a variety of clinical reactions
to bedbugswere reported,
mostly skin reactions.
to control and eradicate them is
notwell understood.
For the study, which
was published online
in the Journal of the
American Medical
Association, JAMA,
JeromeGoddard
and Richard
deShazo from the
University ofMississippi
Medical Center searched data-
bases formedical and pest con-
Bed bugbites tend to be
more of a
than anythingnuisance
Factor by which pregnancymakes a woman moreattractive to malaria-carrying mosquitoes:
2
Up to
people in Europe bear arisk of developing a severeallergic reaction after being
stung by an insect
15 million
Maximum number ofmonths humanity
could survive withoutinvertebrates:
6
NUMBER CRUNCHING
Between
people die each year inthe US from insect sting
allergies
40-100
Estimated number offireflies it would take to
generate the visiblebrightness of the sun:
14,286,000,000
UPFRONT NGP EU7:nov08 8/4/09 13:30 Page 13
14 www.ngpharma.eu.com
FRONTLINE14GRACE INTRODUCES REVELERIS FLASH
MP5ANDCRÉAPHARM, sub-
sidiaries of CréapharmEurope, are
pharmaceutical contractmanufac-
turers, committed to investigation-
almedicinal product development
and supply.
CréapharmEuropeoffers
biotechandpharmaceutical com-
paniesa complete rangeof ser-
vices, fromthedevelopment to the
distributionof clinical batches.
MP5specialises in thedevel-
opmentandproductionof injecta-
bles, liquidor lyophilised, supplied
invials,bagsorsyringes, inparticu-
lar for substances requiringcon-
finement/isolators (highpotency
drugsorcytotoxics forexample).
Créapharm is oneof Europe’s
leading investigationalmedicinal
products suppliers.
Créapharm is
registered by the
French health
products safety
agency (AFSS-
APS) for the pro-
duction,
packaging and distri-
bution of investigational
medicinal products.
Créapharm specialises in
four fields, the first being manu-
facturing. Créapharm provides
capsule blinding as well as man-
ufacturing of placebo capsules
(Coni-Snap and DBcap cap-
sules). Our highly experienced
staff react quickly and efficiently
to customer needs, thanks to
our high-performance semi-au-
tomatic machines; and our over-
encapsulation capacity is the
largest in Europe.
Créapharmalso specialises in
packaging: primarypackaging
(blister packs andbottles), sec-
ondarypackaging (boxesor blister
cards) andpackaging for open-
CONTRACT MANUFACTURING
label or doubleblind studies.
Since 1990, Créapharmhas
completed the full packagingof
6000 clinical batches.
Créapharmoffers its cus-
tomers a high expertise in la-
belling andquality services.
Included in this are labels for
one or several panels, black
andwhite or colour printing,
multilingual texts (all alphabets
and ideograms), decoding en-
velopes and randomisation
(imported or generated).
We are committed to offer-
ing reactivity, assistance,
transparency, 100 percent
traceability and reliability, and
distribution. The serviceswe
use for this are importation
and European phar-
maceuticals re-
lease, along
with distribu-
tion through-
out theworld,
thanks to our
strongworld-
wide partnerships.
We also provideman-
agement of dangerous prod-
ucts (narcotic and
psychotropic drugs) and ex-
press shipments at controlled
temperatures (positive or neg-
ative), alongwith returns,
checking and reconciliation,
and destruction at the end of
the studies.
Our carriers are audited
and certifiedevery year in order
to offer you thebest services.
In the last 10 years
Créapharmhashandled
250,000 shipments to investi-
gational sitesworldwide.
Weare absolutelymindful
of our customers needs. You
need thebest,wedo thebest!
Web: www.discoverysciences.com/Reveleris
The information presented herein is derived from our testing and experience. It is offered foryour consideration and verification. Since operating conditions vary significantly, and are notunder our control, we disclaim all warranties on the results that may be obtained from theuse of our products. Grace reserves the right to change prices and/or specifications withoutprior notification. W. R. Grace & Co.-Conn. and its subsidiaries can not be held responsiblefor any damage or injury occurring as a result of improper installation or use of its products.
REVELERIS, SRC, and REVEALX, are trademarks of Alltech Associates, Inc.
Alltech Associates, Inc. is a wholly owned subsidiary of W. R. Grace & Co.-Conn. GraceDavison Discovery Sciences is a product group of W. R. Grace & Co.-Conn., which nowincludes all product lines formerly sold under the Alltech brand.
GRACEDAVISONDISCOVERY
SCIENCEShas introduced the
Reveleris FlashChromatography
System,a leap forward inenhancing
productivity indrugdiscovery.The
benefits tomedicinal chemists in-
cludeseeingpotentialmolecules
theymaybecurrentlymissingwith
UV-onlydetection,alongwith less
reworkneededdue tohigher frac-
tionpurityand improveddetection,
more targetmaterial collectedand
greater throughput.
TheReveleris Flash
ChromatographySystem isa com-
binationofGrace’s collectiveexper-
tise in silicagel
manufacturing
anddetector
technology,
creating thenext generationof
flashpurificationsystems.The
patent-pendingRevealX technolo-
gydetectsboth chromophoricand
non-chromophoricmolecules.This
technologyovercomes the limita-
tionsof traditionalUVdetection,
whichwill onlydetect chromophor-
ic components, andcanmissany
non-chromophoric impuritiesor
compoundsof interest.
The system is equippedwith
Radio Frequency ID (RFID) labeled
Reveleris SRC cartridges, which
are packedwith a specially devel-
oped grade of silica and have a
higher pressure rating. These car-
tridges improve purification by
significantly boosting system res-
olution, sample loading and re-
covery. By increasing sample
loads on a given cartridge size
and reducing run times, sample
throughputs and yields increase,
making overall purification costs
lower, the systemoffers a foot-
print that allows it to easily fit in a
fumehood. Its intuitive
software and graphical
interfacemake it
very easy to use.
The
RevelerisFlash
Chromatography
Systemisoneof
arangeofGrace’s
solutions fordrug
discoverypurification
andanalysis.
Créapharm isone of Europe’s
investigationalmedicinal products
suppliers
leading
UPFRONT NGP EU7:nov08 8/4/09 13:30 Page 14
15www.ngpharma.eu.com
FRONTLINE 15THE LATESTGENERATIONof ABB’s PATsolu-
tions, Industrial IT eXtended Process
AutomationTechnology (xPAT), provides sim-
plified engineering and streamlined integration
with enterprise systems, aswell as broad con-
nectivity to a host of analysers to help cus-
tomers achieve continuous process
improvement, real-time product release and
Quality byDesign (QbD).
As a leading-edge quality control concept
in the biopharma industries, PAThas increas-
ingly gainedworldwide acceptance bymany
industry experts as a provenmethod of ensur-
ing product safety and quality. It promotes the
integration of analyticalmeasurements into
themanufacturing process to streamline and
improve newproduct development aswell as
improving the quality and ensuring the safety
of the end product.
With its powerful integration capabilities
and functionality, xPAT helps life science in-
dustry customers implement QbD through-
out the entire pharmaceutical product
lifecycle, from drug discovery through devel-
opment to production.
ABB’s Industrial IT solutions for PATandau-
tomationare applicable to the completeprod-
uct lifecycle – fromdevelopment, through scale
up tomanufacturing. ABBprovides an integrat-
ed environment for easeof engineering, data
andprocess visualisation, datamanagement,
multivariate advanced statistical process con-
trol andenterprise connectivity. Interoperability
with analysers is assuredbya commonconfigu-
rator and industry standardanalyser interfaces
basedonOPCUA technology.
xPAT integrates analytical and automation
products in a flexible and scalable platform. It
provides a single configuration formulti-ven-
dor analytical instrumentation, data acquisi-
tion and central storage of all analyser and
process related data.
The PATdatamanagement and control
platformallows users tomanage analyser con-
trol parameters, store analyser data andper-
formmultivariate data analysis for process
monitoring and control.
Learn more at: www.abb.com/lifesciences or email us at:[email protected].
ATLEAST20MILLIONEuropeanssuffer from
chronic, long-termsleepdisordersevery year,
and10millionmorehaveoccasional sleeping
problems.Sleep facilitieshavewitnesseda
rise inpatientsof 10percent in the last 12
months, and thisnumber is expected
togrow furtherat a rateof near-
ly 13percent in thenext year.
Newanalysis from
Frost&Sullivan,Sleep
Service Providers – A White
Paper on the Scope and
Opportunities in Europe, ex-
amineshospital andnonhos-
pital-basedsleepserviceproviders
(physician-ownedandoperated laboratories).
Thestudy foundannualmedical expenditures
onsleep-relateddisorders tobeaboutUS$10
billion (€7.4billion). Indirect costsdue tolowerproductivityandother factorswereesti-
mated tobemuchhigher.
“A part of the boost in sleep facilities is
RISE IN SLEEP DISORDERS due to the steady rise in childhood and adult
obesity rates, which could be a contributing
factor to obstructive sleep apnea,” said Frost
& Sullivan Senior Research Analyst Janani
Narasimhan. “According to doctors, more
awareness about treatment options through
media dissemination along with referrals
from friends and family members have
also added to the increase in
sleep facilities.”
Despite the rise in thenum-
berof reportedsleepingdisor-
ders, it is estimated thatmany
of thoseaffected remainundi-
agnosed.There remainsa lackof
awarenessaboutasymptomatic
sleepdisorders,whichhas resulted indi-
minishing ratesof testing.Manypeopledevelop
cognitivedeficits after a fewnightsof reduced
sleepqualityorquantityandnewevidencesug-
gestsmorehealth-relatedconsequencesof
sleepdebt suchas commonviral illnesses,dia-
betes, obesity, heart disease,depressionand
otherage-relatedchronicdisorders.
At least
Europeans sufferfromchronic, long-termsleepdisorders
every year
20 million
RESEARCHERS HAVE
DISCOVERED human anti-
bodies that can neutralise not
only H5N1 bird flu, but also other strains
of influenza. The antibodies, com-
prised of immune system pro-
teins, may be used to protect
frontline workers and oth-
ers whomay be at high
risk should a pandem-
ic of flu break out.
PAT SOLUTION
The initial tests onmice, done
by scientists in Hong Kong and the US,
have shown to be highly effective. The
speed of antibody response is report-
ed to be far higher than the H5N1 bird
fly vaccine produced by sanofi-aven-
tis for humans.
PROTECTION AGAINST BIRD FLU
UPFRONT NGP EU7:nov08 8/4/09 13:31 Page 15
16 www.ngpharma.eu.com
16 FRONTLINE
ANOVER-THE-COUNTERDIETARY
SUPPLEMENTtakenbyarthritispa-
tientshasbeen foundtobenotas
effectiveasonce thought.
Glucosamine,asubstance that is
naturallyproduced in thebody,has
failed toemerge fromtrialsasasuit-
ablesupplement for sufferers.
Anomalies in thewide-ranging
resultsof the trialsofglucosamine
sulphatemeanthe resultsof the
studyare inconclusive,and there-
fore thecompound is toounstable
tobeusedasasupplement.
Anotherstudywasconducted
asa follow-up to theglucosamine
trial; thesecondstudyalso tested
chondroitin sulphate,acarbohy-
drate thathelpscartilage retain
water,which isoften taken incombi-
nationwithglucosamine.The re-
sultsof thestudydeemedthe
substance tobe justasunreliableas
straightglucosamine,and therefore
no treatmentcouldbesuggested.
SUPPLEMENT FAILINGS
ZYDUS CADILA, based in
Ahmedabad, India, has
signed a new drug discovery
and development agreement
with Eli Lilly that aims to in-
crease productivity in drug
discovery and development
by alligning the unique
strengths of both compa-
nies. The collaborative re-
search programmemay
continue for up to six years,
according to a Zydus
spokesperson.
Lilly will have an option
to license resultingmole-
cules at different stages.
Zydus would receive pay-
ments of up to $300million
and royalties on sales.
AGREEMENT SIGNED
THEEUROPEANMEDICINES
AGENCYhas said thatGardasil,
thehumanpapillomavirus vac-
cineproducedbyMerck&Co., is
safe touse and is unlikely to
have caused twogirls in Spain to
become ill. An expert committee
reviewed the two cases and reg-
ulatorswill continue to recom-
mendvaccinationwithGardasil
“in accordancewith national
vaccinationprograms inmem-
ber states”of the
European
Union.
GARDASIL DEEMED SAFE
ANEWREPORTby theWorld
HealthOrganization showsa close
linkbetween tuberculosis and
HIV.The report says that nearly
9.3millionpeoplebecame ill with
tuberculosis in 2007, andof these
newcases, 1.4million – 15percent
–were linked toHIV.
TheTB Control report finds
HIV LINKED TO TB
THEBIOLEVITATOR is thefirst
benchtop3Dcell culturesystemon
themarket,deliveringsignificant
productivitygains to researchers in
drugdiscovery, cell-based thera-
peuticsandregenerativemedicine.
TheBioLevitatorbrings theengi-
neeringandautomationexpertise
ofHamilton togetherwithGlobal
CellSolutions’uniqueapproach to
cell culture forascalable
andautomatedsys-
temthat reduces
costswhile im-
proving the
consistencyand
relevanceof cul-
turedcells.
TheBioLevitator
eliminatestraditionalpe-
ripheralcellcultureinstruments,
suchasincubatorsandcentrifuges,
andminimisesmanualhandling.
EachoftheBioLevitator’sfourhy-
drophobic,PTFE-filtered50mLcell
culturetubescanproducecell
growthequivalenttouptotenT75
flasks,dependingonthecell line.
Thesystemfeaturesauser-friendly
touchscreen interfacewithreal-time
monitoring,andcontrolofenviron-
mental temperatureandCO2levels.
TheBioLevitator utilises the
Global EukaryoticMicrocarrier
(GEM) technology fromGlobal Cell
Solutions.TheGEMprovides an
HAMILTON UNVEILS BIOLEVITATOR
optically clear andnon-autofluo-
rescent pipettable substrate for
adherent cell lines. TheGEMs
containsparamagnetic particles
that facilitate suspension in the
LeviTubeandmedia changes.
Customprotein coatings are
available to facilitate growthof
difficult cell lines and theGEM’s
hydrogel core inhibits ice crys-
tals during cryopreserva-
tion, ensuringhigh
survivability and
cell function.
Hamilton
Company is a
leadingworldwide
supplierof precise
liquidhandlingde-
vices, laboratoryautoma-
tionandstoragesystems,
servingcustomers inacademic
andprivate research laborato-
ries, pharmaceutical and clinical
diagnostic companies and gov-
ernmental institutions. Hamilton
maintains headquarters in
Reno, Nevada, US andBonaduz,
Switzerland, both ofwhich
house R&Dandproduction facil-
ities. Hamilton has subsidiaries
for direct sales and service in
many countries andworkswith
awide distributor network in
other regions. Hamilton is a pri-
vately held company.
oneout of fourTBdeaths, or near-
ly half amilliondeaths, isHIV-re-
lated, nearly twice asmanyas
previously realised. According to
theWHO, the escalatingnumber
ofTBdeaths amongpeople in-
fectedwithHIV showsaneed for
a joint,well-coordinated response
to the twoepidemics.
is the first benchtop3D cell culture system
on the market
TheBioLevitator
UPFRONT NGP EU7:nov08 8/4/09 13:31 Page 16
My experience at Heinz was of great benefit tomy ca-
reer in the pharmaceutical industry. Innovation is very im-
portant in the consumer packaged goods world, because
it’s a fast-movingmarket. You can come upwith an idea
and launch a product within 12months. Things are con-
stantly changing, and that changingmentality has
helpedme to look at things and think about innovation in
a different way.
When I was first exposed to the pharmaceutical indus-
try in 2002, I grew aware of many of the issues that the
industry was facing, and I found it intellectually stimulat-
ing to see how it was changing. It was clear tome that a
new businessmodel would be required to win in this
changing environment.
The old industrymodel, from a sales executive stand-
point, was focused on the physician, with a strategy to
deliver themessagemultiple times to that physician.
Physicians, however, at least in some parts of the world,
now have less and less say in what is actually dispensed,
as payors and providers andmore restrictivemarkets
shift that balance of power. And yet wewere still ad-
dressing the physician as the sole decision-maker.
The pharmaceutical industry is a good industry, but it
is going through some tough times. The long-term
prospects of the industry are very positive.With an
aging population and with the cost of chronic illness ac-
celerating with that aging population, the capability that
has been created in Novartis in terms of discovering and
developing new and innovative medicines that meet
unmet medical needs is going to position us very well
for the future.
Consolidation among the big players in the industry
hasn’t increased efficiency, or the effectiveness of develop-
ment, and neither has it enabled companies to bettermeet
the needs of patients or other stakeholders.
Development is being restructured to be able to operate
in a tougher regulatory environment.We aremoving from
what has been functional decision-making to cross-func-
tional teams that are empowered and focused around
moving ourmolecule from early development all theway
through commercialisation.
JOSEPH JIMENEZCEO, Novartis Pharmaceuticals
18 FRONTLINEIN MY VIEW
UPFRONT NGP EU7:nov08 8/4/09 13:31 Page 18
ISSUE IN NUM8ERS
386
106,000 deaths are caused
by adverse drug reactions in
the US each year (p116)
GSK is undertaking a restructuringplan to reduce costs by
over the next two years (p28)€2 bilion a year
Between 600,000 and
die every year in the developing world fromrotavirus-induced diarrhoea (p86)
800,000 babies
19www.ngpharma.eu.com
FRONTLINE 19A STUDY BY BOSTON RE-
SEARCHERS published in the
journal Psychotherapy and
Psychosomatics found that most
of the psychiatrists on the
American Psychiatric
Association panels who wrote
the newest clinical guidelines on
treating depression, bipolar dis-
order and schizophrenia had fi-
nancial ties to drug companies.
Lisa Cosgrove of the
University of Massachusetts-
Boston and colleagues
searched publicly accessible
databases such as Medline and
the records of the federal patent
office to identify financial ties.
Eighteen of the 20 authors
had at least one financial tie to
drug companies. Twelve authors
had ties in at least three cate-
gories, such as consulting, re-
search grants, speaking fees or
stock ownership. The study also
found that all of the authors of
schizophrenia and bipolar
guidelines had relationships
with the drug industry, while 60
percent of the authors of the de-
pression guidelines had similar
connections.
BAD CONNECTIONSDRIVING RETURNS FROM YOUR ERP INVESTMENT
MANY ORGANISATIONS FAIL to
deliver the benefits which were
envisaged in the original busi-
ness case for their ERP sys-
tem investment.
Some of the com-
mon reasons for
this are due to a
lack of focus on
benefits realisa-
tion during im-
plementation or
from taking inade-
quate account of process
and organisational change. This
also may be the case because of
insufficient education and train-
ing of the users, as well as post-
ponement of the implementation
of some parts of the system due to
implementation fatigue or bud-
getary constraints.
When this hap-
pens, a very expen-
sive asset is being
significantly under-
utilised. The
Enterprise Resource
Planning (ERP)
Assessment is a low cost
approach to identifying oppor-
tunities for improvement and pre-
senting potential benefits to the
senior management team.
Most ofthe cost of the
implementationhasalreadybeen
incurred
ERP system
An orphan disease is one that
hits anywhere between 2000 and
250,000 people (p40)DELIVERABLESAn assessment is made of current operations and of how the ERP system isbeing used to support and improve the business processes. An analysis of re-sults and identification of opportunities for improvement is produced to pro-vide an estimate of benefits resulting from those opportunities, which oftencome in the form of a prioritised list of potential improvement initiatives. Afeedback presentation is then made to senior management outlining the po-tential benefits and proposed implementation approach.
BENEFITSMost of the cost of the ERP system implementation has already been incurred– the ERP Assessment is about identifying how to drive further benefits fromthe initial investment. The assessment and feedback processes are highly en-gaging and interactive, which helps to build ownership and commitment to theimprovement initiatives, and many of the initiatives identified are likely to below investment in relation to the return, and therefore will be self funding.
For more information on this service, please visit www.bsmconsulting.co.uk/erp-assessment.
UPFRONT NGP EU7:nov08 8/4/09 13:31 Page 19
FRONTLINE20 INTERNATIONAL NEWS
SANOFI PASTEUR, the vaccines division of
sanofi-aventis, has announced that Emerflu, its
pandemic influenza vaccine for use in humans,
has been grantedmarketing authorisation from
the Australian Therapeutic Goods Administration.
The vaccine is now approved for the prevention of
pandemic influenza in Australia upon official declara-
tion of a pandemic. It is intended to bemanufactured
and distributedwith the identified pandemic strain and
used in Australia in accordancewith official Australian
government practice.
Theapproval follows thepositive rec-
ommendationby theAustralianDrug
EvaluationCommittee in February,
basedona reviewof results fromclini-
cal trials,whichbegan in late 2004on
H5N1alum-adjuvanted inactivated in-
fluenza vaccine candidates.The trials
evaluated the safety andability of
the vaccine to elicit a protective im-
mune response to theH5N1 strains
currently identifiedbyglobal health
authorities andexperts as apoten-
tial source for thenext pandemic.
PREVENTION OF MAJOR BIRTH DEFECTS
A STUDY UNDERTAKEN by a group of researchers based in
Washington, DC, has found that women need enough vitamin
B12, in addition to folic acid, to cut the risk of having a baby
with a serious birth defect of the brain or spinal cord. One of
the researchers, Dr. James Mills of the US NIH, said the study
showed that vitamin B12 deficiency was a risk factor for neural
tube defects independent of folic acid, another B vitamin.
Irish women have been found to have the lowest vitamin
B12 levels, and are therefore five times more likely to have a
baby with a neural tube defect.
In response to the results
found in the study, Mills has
advised that women
who do not eat
meat or
dairy
products to
be particularly
vigilant with their
vitamin B12 intake
during pregnancy.
FLU VACCINE APPROVED IN AUSTRALIA
TAKEDA MOVES INTO CANADA
TAKEDA PHARMACEUTICAL
COMPANY LIMITED and its
wholly-owned subsidiary,
Takeda Pharmaceuticals North
America, Inc., has an-
nounced the es-
tablishment of
Takeda Canada
Inc., expand-
ing the compa-
ny’s North
American pres-
ence into the
world’s eighth largest
pharmaceutical market. Takeda
Canadawill be headquartered
inMississauga, Ontario, west of
Toronto, one of the top three
biotech areas in North America.
“Aiming to realise itself as a
world-class pharmaceutical
company, Takeda is striving to re-
inforce a global operating infra-
structure including expanding its
own sales channels. Takeda’s en-
trance into Canada is a sig-
nificant step in
expanding Takeda’s
North American
presence,” said
Yasuchika
Hasegawa, presi-
dent of Takeda.
Takeda Canada
will register and commer-
cialisemedicines fromTakeda’s
portfolio of primary care and spe-
cialty products. Takeda Canada in-
tends to file its first NewDrug
Submission (NDS) with the
Canadian Health Authority by the
end of 2009.
Takedaaims to be a
pharmaceuticalcompany
world-class
UPFRONT NGP EU7:nov08 8/4/09 13:33 Page 20
NEW CANCER DRUG
FRONTLINEINTERNATIONAL NEWS 21
ONE STEP CLOSER TO COLD CURE
US-BASED Synta Pharmaceuticals
Corp and GlaxoSmithKline have en-
tered into an agreement for the de-
velopment and commercialisation
of the drug Elesclomol. The collabo-
ration was secured upon a €7.5 mil-lion payment from GSK to the
biopharma company that focuses
solely upon the treatment of severe
medical conditions.
Elesclomol is an investigational,
oxidative stress inducer that triggers
apoptosis (programmed cell death) in
cancer cells. It is not yet approved for
any indication in themarket.
The partnership makes Synta
eligible for a total of €440 millionin pre-commercial milestone pay-
ments, of which €40 million havebeen paid to date, €75 million isrelated to additional progress in
melanoma, and the remainder is
related to progress in other cancer
indications.
PROBLEM MERGERS
TEVA PHARMACEUTICALS
INDUSTRIES LTD, the world’s
largest generic drugmaker, re-
ported a fourth quarter loss
following its acquisition of rival
Barr Pharmaceuticals. The
Israel-based company experi-
enced a net loss of €519 mil-lion, compared with a net profit
of €430 million the previousyear. The company acquired
New Jersey based Barr for
€5.62 billion in late December2008, and was forecasted to
post a new profit of €2.19 bil-lion from the merger. In a state-
ment given at the time, Shlomo
Yanai, Teva’s President and CEO
said, “With the integration
process (of Barr) well under
way, we believe we will realise
even greater synergies from the
combination than we initially
anticipated.”
COMBATING COUNTERFEITS
AFORUMheld inSharjah,UAE in
February 2009, saw representa-
tives fromgovernment depart-
ments and theprivate sector
tackle the increasing
worldwideproblem
of counterfeit
pharmaceuti-
cals. The
Middle East has
been specifically
targeted, despite
recent initiatives to
limit the amount of trade
in fake, andpotentially danger-
ous,medicines. SteveAllen,
EuropeandMENASenior
Director ofGlobal Security for
Pfizer, said, “There are lots of ini-
tiativesbeing takenagainst
counterfeitinghere. Butwe can-
not say that theMiddle East region
is freeof fakemedicines, especially
becauseof thepresenceofmany
free trade zones.”
Dubai is the centreof
business transit,with
goods fromAfrica
andAsiapassing
throughen route to
the restof the
world.TheUAE
MinistryofHealth re-
quiresall companies im-
portingprescriptionand
non-prescriptionmedicines toob-
tainapermit tomove their products.
With the importationof fakemedi-
cineson the rise, theMinistrywill be
making the requirements fordrug
tradingstricter andplacingabanon
non-registereddrugs.
The UAEMinistry of Health
will be making
requirements fordrug trading
stricter
US RESEARCHERS have de-
coded the genome for 99
strains of the common cold,
and as a result,may have
comeone step clos-
er to finally find-
ing the
long-awaited
cure. Stephen
Liggett of the
University of
Maryland created
findings froma
process of cataloguing the
vulnerabilities of the virus; he
says the benefits
are a breakthrough for asthma
sufferers and those with chronic
obstructive pulmonary disease.
However, the cost for
the development of
such drugs can be
high. Anti-viral
drug experts pre-
dict the typical
cost of develop-
ing a new drug to
be around €530mil-lion. There is also a long
process of regulations to go.
With the effects of the common
cold being very minor, combined
with an expensive process in
which to manufacture andmar-
ket the drug, it seems unlikely
that the common cold cure
will take off.
The typicalcost of developing
a new drug is around
€530million
UPFRONT NGP EU7:nov08 8/4/09 13:35 Page 21
22 www.ngpharma.eu.com
FRONTLINE22
DRAGENOPHARMAPOTHEKER
PÜSCHLGmbH is a global contractmanufacturer
for solid forms in thepharmaceutical and the
healthcare sectionwithheadquarters in
Tittmoning. Additional locations areBerlin,
Neuötting andWarstein. The innovative enter-
prisewith highest pharmaceutical
competence is a leadingEuropean
guarantor concerningquality as
regards tomanufacturing and
development of pharmaceuti-
cal products in full service.
DragenopharmApotheker
PüschlGmbHwasestablished in
1949as aprivate companyandhas
alwaysbeendedicated to contractmanufac-
turing.Theenterprise is amember of Aenova, a
leadingEuropeangroupof contractmanufacturing
in solid oral formsof pharmaceutical anddietary
supplement products.
Dragenopharm isexperiencingsteadygrowth
of its fourdifferentplants,withanannualoutputof
COMPETENCE FOR SOLID FORMSP&G OUT OF THE GAME
PROCTOR & GAMBLE is taking itself
out of the pharmaceutical branding in-
dustry in an attempt to focus more
heavily on its high growth business
arms. The company is working with
Goldman Sachs to identify potential
buyers for its consumer products, fol-
lowing record low share prices of
$52.21 (€39.39) in February 2009.The company’s healthcare division,
which includes its pharmaceutical busi-
ness, recorded €11 billion in sales in2008, with a net earning of €1.8 billion.With the company’s focus moving away
from investment into new drug develop-
ment, P&G have now taken the direc-
tion of shedding some of its key
pharmaceutical brands.
sixbillionpiecesof
pressingsand80million
packageswith200mil-
lionblisters.
Dragenopharm’sprod-
uctsaregranulates,
tablets, film-coated
tablets, sugar-coated
tablets, capsules,powdersand
clinical samples inbatchsizes fordevelop-
ment, scalingup toaproductionofup to750kg.
Investments in packaging capabilities with
three new lines for blisters and bottles are now
in focus and Dragenopharm is able to offer a
broad andwide range in all different materials
and quantities with adjusted equipment.
A new administration and laboratory build-
ing in Tittmoning with 7000 sqm of
space was built in 2008 and a huge
capacity for different analytic
methods including EU-release
was created. Transparency was in
all areas provided by the installa-
tion of glass walls.
Transparencymeets security in a
perfectway: all sites andprocedures
meet the requirements ofGMP-guidelines and
ISO27001.
As one of the leading German contract
manufacturers for solid oral forms (European
Best 500 nominee), we deliver finished prod-
ucts mainly to customers within Europe, also to
other continents.
A newadministrationand laboratorybuildingwith
of spacewas builtin 2008
7000 sqm
PROPOSEDREVISIONS to the EuropeanUnion’s
animal testing directive, 86/609/EEC are current-
lymaking their way through the European
Parliament.
According to campaigngroupAnimal
Defenders International (ADI),MEPShave tabled
more than500amendments to theDirective.They
decrywhat theycall a “fierce lobbyingcampaignby
those in theprimate tradeand research industry”
which theysay threatens to tearapart thepropos-
als andopenupa free-for-all in animal experimen-
tation inEurope.
TheUK-basedRoyalSociety for thePrevention
CHANGES TO ANIMAL TESTING
ofCruelty toAnimals (RSPCA)alsovoiced fears that
theCommitteewould“opt toweaken theway the
proposed lawwill regulate theuseof animals inex-
perimentsbecauseof exaggeratedclaims that life-
saving researchwill grind toahalt inEurope if the
proposal is approved in its current form”.
TheUKbiosciencesectorwarned inadeclara-
tion thatmanyof theproposals in the reviseddraft
directive,aswell assomeof theamendmentspro-
posedsince lastNovember, “couldundermineani-
malwelfareeitherdirectlyorbydriving research
abroad,orwouldhinderbiosciencewith littleorno
animalwelfarebenefit”.
The company sawrecord low share
prices of
in February€39.39
€1.8billion
Pharmaceuticalbusiness recorded
in sales in 2008
With a netearning of
€11billion
UPFRONT NGP EU7:nov08 8/4/09 13:35 Page 22
24 www.ngpharma.eu.com
FRONTLINE24UK PHARMACEUTICALS giant
GlaxoSmithKline is to spend
US$5.1 billion on re-
structuring its or-
ganisation, the
group’s CEO
AndrewWitty
recently told
the UK’s
Financial Times.
Themove could
see the company cut
thousands of jobs in a bid to
achieve annual pre-tax savings
of US$1.4 billion within the next
In the Q2 2008 issue of NGP, WAYNE PISANO, CEO of sanofi pasteur, em-phasises the fact that the company is the only one in Europe dedicatedentirely to the production of human vaccines. In this exclusive interview,he also divulges his commercial strategy of growing existing core assetsand increasing capacities to answer medical needs in the new market.
Go to www.ngpharma.eu.com to browse ‘Past issues’ and view the coverstory of the Q2 2008 issue, and read Pisano’s vision to create “a world inwhich no one suffers or dies from a vaccine-preventable disease”.
three years.Witty did not say
howmany jobs would be lost –
and claimedmanywould
be reallocated. The
news followed the
announcement
by GSK that it
has sustained a
fall in full-year
pre-tax profits
fromUS$10.7 bil-
lion to US$9.5 billion
on sales, which were up by
seven percent fromUS$32.3
billion to US$34.7 billion.
GSK TO DRAMATICALLY RESTRUCTURE
ANEWREPORT in Cancer
Prevention Research details the
power of the three-day-old broc-
coli sprout to eliminate
Helicobacter pylori (H. pylori) in-
fections, a widespread type of bac-
terial infection and amajor cause
of stomach cancer.
The cancer-protective effects
of sulforaphane, a phytochemical
frombroccoli, have been docu-
mented for almost 20 years.
However, the effect of broccoli in
humans on the bacterial infection
that leads to stomach cancer was
explained for the first time in this
study. Seventy grams of fresh broc-
coli sprouts or its equivalence in al-
falfa sproutswere given daily to 48
Helicobacter-infected Japanese
men andwomen for a period of
eight weeks.
Using tests on the breath,
serumand stool of participants, re-
searchers evaluated the severity of
H. Pylori infection at the start of the
study. Eight weeks later, infection
levels were lower on all threemea-
sures among those patientswho
had eaten broccoli sprouts, while
they remained identical for patients
who had eaten alfalfa sprouts.
THE TRUTH ABOUT BROCCOLI
GSKis to spend
on restructuring itsorganisation
US$5.1billion
FROM THE VAULTSWEDISHSCIENTISTShave
found that heartmuscle cells are
renewedover our lifetime, sowe
are not limited to thosewe
arebornwith.The
discovery could
open thedoor
to treatments
that replace
damaged
heart tissue
with newcells.
The study, by
Professor Jonas Frisén of the
Karolinska
Institutet, in
Stockholm,
TAKE HEART
Sweden and colleagues, was
published online in the 3April
issue ofScience.
The researchers tookad-
vantageof the fact that
carbon-14generated
bynuclearbomb
testsduring the
ColdWargets
intoDNA, includ-
ing that inheart
muscle cells (car-
diomyocytes).This can
thenbeused todate theageof
theheartmuscle cells inhumans.
Frisén and his team found
that heart muscle cells renew
gradually over the human
lifetime, although the rate
declines as we get older.
One per cent of our heart
cells are replaced per year at
age 25 and this falls to 0.45
per cent at age 75.
They also found that
over a normal lifespan,
fewer than 50 percent of
the heart’s muscle cells
are replaced.
Onepercentof our heart cells are
per year atage25
replaced
UPFRONT NGP EU7:nov08 8/4/09 13:36 Page 24
26 www.ngpharma.eu.com
FRONTLINECOMPANY INDEX
COMPANY INDEX Q2 2009Companies in this issue are indexed to the first page of the article in which each is mentioned.
ABBAesica Pharmaceuticals LtdAlternatives TechnologieAmgenAnabaseApplied BiosystemsArvato Services HealthcareBayerBest ManufacturingBio-Rad LaboratoriesBiovista IncBSM ConsultingBürkertCabernet Pharmaceuticals IncCisbio BioassaysCréapharmDefiniens AGDividellaDragenopharmDuke UniversityFedExFine Organics LtdFrost & SullivanGenentechGeodis WilsonGlaxoSmithKlineGrace Davison
15, 6672
83, 859295
6, 96, 97815446
124, 125112, 11319, 151
43116
128, 12914, 69
106, 10750, 5122, 231161172
28, 14228
52, 5386
14, 57
GenostarGrindeksHamiltonHuman ProductivityIMS HealthInnovexLodestoneMelior Discovery IncMerck & CoMerck SeronoMetastormMHRAMillenniumMPI ResearchNEPICNovartisOystarPharmaflow LtdPfizerPiramal HealthcarePricewaterhouse CoopersRandoxRechon Life ScienceRescentrisRestek CorporationRocheRoche Diagnostics
2, 10558, 5916, 17148144
IFC, 138, 14049
134, 1352834
98, 99126136
130, 131, IBC72, 7564, 76
2559, 60
28, 44, 1267228
132, 13359, 63
114, 115100, 101
28118, 119
Roche NimbleGenSCA Cool Logisticssellxpert GmbHSchering-PloughSensitechShasun Pharma Solutions LtdShireSiemensSingulexSTARLIMS CorporationStratxTeraDiscThermo Fisher ScientificWatersWyeth
122, 1238, 82, 83146, 147
28787240
70, 71120, 121109, 111
274, 108, 109
32, 3890, 91, OBC
28, 102
26CUTTING RISK
ZENTIVA, the Czech drugmaker
owned by sanofi-aventis, reported
a doubling in sales in the third
quarter of 2008, compared to the
same period last year. Between
January to September, the compa-
ny recorded a two percent in-
crease in its net sales reported in
local currency. “The favourable
evolution of Zentiva’s sales in
Romania directly reflects the re-
consolidation of our local opera-
tions and the positive impact of
the changes in strategy initiated in
the last year. These changes are
aimed at refocusing our efforts
from securing market share to op-
timising working capital, improv-
ing cost efficiency and financial
profitability,” said Dragos Damian,
General Manager, Zentiva.
ROMANIAN SALES UPTHEUKGOVERNMENT’Snewhealthand
social care regulator is todraft a risk
profile for everyGPpractice so that
it can identifypoororpossibly
dangerousGPs.TheCareQuality
Commission,which tookon
regulatory responsibili-
tyon 1April, plans toevaluatepractices
usinga toolbasedonsubstandardperfor-
mance indicators.Risk scoreswouldbe
basedona rangeofdata, including total
numbersof complaints, surveysof staff and
patientsand thecommission’s inspections
ofGPpractices.
UPFRONT NGP EU7:nov08 8/4/09 13:36 Page 26
This should be a good time for big pharma. The purchase of pre-
scription drugs is usually non-discretionary – people need their
medicines – and in the US, backed by insurance. Many compa-
nies have large cash reserves, which should be enough to see
them through the downturn.
Some companies do seem to be doing all right. In January, Swiss drug-
maker Novartis reported a 25 percent jump in 2008 net profit and fore-
casted a record year for 2009. Novartis said its profit had reached €6.2
billion and that sales had increased nine percent last year, driven by vac-
cines, diagnostics and consumer health products, and a revival in its core
pharmaceutical business. The company also boasts the largest cash re-
serves among the big players – €11.4 billion.
US-based Merck & Co. also beat profit expectations when it announced
in February that it had earned €1.65 billion in the final quarter of 2008.
However, this was not achieved through increased sales – in fact, the rev-
enue from two of the company’s top drugs, Zetia and Vytorin, fell by 26 per-
cent after questions were raised about their effectiveness, and overall
revenue fell from €4.7 billion to €4.57 billion.
Instead, Merck shored up its profits by eliminating more than 10,000
jobs in the last three years, and it has said it will cut 7200 more by 2011.
UK-based GSK cut 850 research jobs last year as part of a restructur-
ing plan that began in 2007, and in February, the company warned that it
might be forced to cut its workforce further in an effort to reduce costs by
€2 billion a year over the next two years. At the same time, AstraZeneca said
it would cut 6000 jobs, and 20,000 jobs are also due to go in Pfizer’s merg-
er with Wyeth.
Cut your lossesMany of these job cuts involve US companies. So what’s going to hap-
pen in Europe? Will we feel similar effects of the downturn?
According to Jo Pisani, a partner in PricewaterhouseCoopers
Strategy’s pharma group, we have at least one advantage: it’s harder
to cut jobs in Europe than it is in the US. “It’s easier to lay people off in
the US because of the nature of the employment contract, and then the
next easiest would be somewhere like the UK,” Pisani says. “In coun-
tries like France, Germany and Belgium it’s more difficult, because of
stronger unions and the period of consultation involved. Unfortunately
at the moment, distressed companies will go for the countries where it’s
easy to downsize first.”
Pisani also points out that many companies are spinning off their
non-core activities. “This is part of a general shift within pharma to a busi-
ness model of focusing on core therapeutic areas. For instance, Pfizer re-
cently came up with a business unit structure where it’s got six core
business units and is actively out-licensing 100 compounds that don’t fit
28 www.ngpharma.eu.com
COVER STORY
SINKThe global financial crisis has prompted a rash ofmergers, consolidations and layoffs in the pharmaceuticalsector. How will the European industry stay afloat inthese challenging times?
By Marie Shields
COVER STORY v2:apr09 08/04/2009 13:41 Page 28
its therapeutic area focus. Similarly, AstraZeneca early last year sold off
its cardiovascular franchise to a joint consortium of private equity and
venture capital.” As many of those non-core activities happen to be based
outside of the US, this could mean a boost for non-American specialist
companies.
Downsizing, outsourcing, restructuring: these are the kinds of things that
go on all the time in any industry, especially one facing the challenges of patent
expiries and the death knell of its main cash cow, the blockbuster. It’s hard to
tell how much of the recent activity in the pharmaceutical sector is a reaction
to the financial downturn, and how much would have happened anyway.
One thing that does seem to have been prompted by the credit crunch
is the sudden vogue for mergers. The big news in January was Pfizer’s €52
billion acquisition of Wyeth, which will give it access to its rival’s vaccines,
and consumer health and animal products. The move was widely seen as
an attempt to boost Pfizer’s pipeline in advance of Lipitor – the cholesterol
drug that made the company nearly €9 billion last year – losing patent pro-
tection in the US in 2011. In all, 38 percent of Pfizer’s current sales will face
competition from generics by 2013.
The merger will create a massive player in the industry, creating a com-
pany with more than 15 products with €750 million each in annual revenue,
allowing it to move away from its dependence on blockbusters.
In March, Merck & Co. agreed to buy Schering-Plough for €31 billion,
in order to extend its pipeline and diversify its portfolio, while Swiss-based
Roche finally took control of Genentech in a deal that valued the US
biotechnology company at €35 billion.
Both of these deals are interesting, for different reasons. The
Merck/Schering buyout will be enacted through a reverse merger, with
Schering, renamed Merck, remaining as the surviving public company.
The reason for this rather complex manoeuvre seems to be aimed at
avoiding the loss of the rights to Remicade, a lucrative rheumatoid
arthritis drug that Schering markets internationally under a joint agree-
ment with Johnson & Johnson.
Then there’s the ongoing saga of Roche/Genentech. The two com-
panies have been linked since the 1980s, when Genentech licensed one
of its first drugs to Roche. In 1990, Roche and Genentech merged, with
Roche acquiring 60 percent of its smaller rival’s shares. At the time, it
purchased an option to buy the remaining shares at a pre-set price – an
option it exercised nine years later. Roche then brought Genentech back
into the market twice in the next year, keeping a 58 percent stake in the
company.
Roche eventually agreed to pay the equivalent of €35 billion – or €72
per share – for the cancer treatment specialist, which represents a premi-
um of 26 per cent above Genentech’s closing share price at the time. The
price is well above the €67 a share that Roche initially bid.
29www.ngpharma.eu.com
swimor
COVER STORY v2:apr09 08/04/2009 13:41 Page 29
the deal a half step forward: “Wyeth’s assets will buy Pfizer some time but
will not be enough to replenish its research pipeline or replace Lipitor.”
PwC’s Jo Pisani argues that: “It should be more about creative collab-
oration and strategic collaboration than mergers. McKinsey research has
shown that 60 percent of mergers and acquisitions don’t create value. Add
to that the period of paralysis that companies often go through while the
deal’s uncertain, a lot of those big deals won’t close for another six months.
“Against that backdrop, though, you’ve got the fact that pharma has an
awful lot of cash – there was an FT article a few months ago that said the top
companies have something like $100 billion (€76 billion) between them all.
And then you had the Pfizer/Wyeth deal in
which they put up $22 billion (€16.6 billion)
in cash, and the rest they raised through fi-
nancing. It’s a quick fix solution: if you have
the cash, you can suddenly buy a pipeline
or buy your entry into biologics.”
As Shabeer Hussain points out, “As
blockbusters fall off patent, organic growth
has witnessed major hits. Pharma compa-
nies have resorted to inorganic growth
through M&A. However, this growth cannot
form a sustainable business model for long.
This is a stop-gap arrangement, to satisfy investors.
“Though Wyeth’s Prevnar and Enbrel are expected to benefit Pfizer by
softening the loss incurred due to the Lipitor patent expiry, the deal may not
add the expected value as imagined by Pfizer. This expensive acquisition is
unlikely to bring in great dividends. In fact, expanding the business will make
it even more difficult for Pfizer to handle its enormous empire. Growing a huge
business of that size is a tall order.”
Like attracts likeSo far, much of the merger action has been confined to the US-
based pharma giants. Is this a geographical trend, or can we expect to
see more of the same on this side of the Atlantic? Jo Pisani be-
lieves it’s a question of cultural fit. “Pfizer and Wyeth have a sim-
ilar sort of culture, and that would be the same if you had
European to European consolidation. Many people are saying
that GSK must buy AstraZeneca, that it has to be the next one.
It would make sense because they are culturally similar, plus
there would be synergies in smashing together the two head of-
fices in the UK.” Pisani believes that cross-continental consoli-
dations are less likely – the Roche/Genentech deal being the
obvious exception.
Another interesting difference between US-based and
European-based pharmacetuical companies is that several of the
European companies are family-owned rather than publicly quot-
ed. German company Boehringer Ingelheim, the number 15 com-
pany in the world, is one of these. In a previous conversation with
Andreas Barner, Boehringer’s Vice Chairman, he said, “It allows
us to be more stable. We are less affected by the stock market,
very obviously, and can continue to follow our long-term vision.”
Barner isn’t exaggerating: Boehringer has invested €1.73 bil-
lion in research and development in the last year, adding 400
Old newsMergers and acquisitions in the pharmaceutical industry are not new,
and we probably haven’t seen the last of them. In the opinion of Shabeer
Hussain, Program Leader in Pharmaceuticals for Frost & Sullivan, “Plagued
with R&D challenges, patent expiries, generic competition and high drug
attrition rates, pharmaceutical companies have resorted to various crisis
management strategies to stay afloat during trying times. One of these
strategies is M&A activities. With Pfizer taking a strong and bold step in this
direction, there may be other companies to follow.”
AstraZeneca, Eli Lilly & Co., GSK, Novartis, Pfizer and sanofi-aventis all
have patents on major drugs due to ex-
pire in the next three years. Wyeth, so ea-
gerly snapped up by Pfizer, faces a tricky
situation of its own. Its two biggest selling
drugs, Effexor for depression and Protonix
for heartburn, will lose patent protection
in 2010 and 2011. In addition, generic ero-
sion is predicted to knock between two
percent and 40 percent off the revenues
of the top 10 companies between now
and 2015.
One strategy for coping with this
massive loss of income is that exemplified by the Pfizer/Wyeth deal: swal-
low up your rivals, slim them down by radically cutting staff, and take over
their pipelines in the hope that, even if they don’t produce the next block-
buster, you will at least add some diversity to your portfolio and gain
enough to prop up your bottom line in the short term.
The crucial phrase is ‘bottom line’. Such mergers are often nothing
more than a quick fix, aimed at making companies look good for share-
holders and investors. But how well does this work? When news of the
Pfizer/Wyeth merger broke, many analysts and industry leaders were skep-
tical. Michael Rainey of Accenture commented that nine out of 10 of such
big deals created no value or negative value. Bain’s Charles Farkas called
30 www.ngpharma.eu.com
COMPANIES WITH THE BIGGEST CASH RESERVES
Novartis€11.4 billion
Roche€10 billion
Johnson & Johnson€9.7 billion
Merck & Co.€7.5 billion
GlaxoSmithKline€7 billion
Generic erosion will knockbetween 2 and 40 percent
off the revenues of the top 10 companies
between now and 2015
COVER STORY v2:apr09 08/04/2009 13:41 Page 30
new employees, to bring its global headcount in R&D to 6400 people, in
a time when other companies are cutting back.
One of Boehringer’s German competitors is also majority privately
owned: 30 percent of Merck KGaA’s total capital is publicly traded, while the
Merck family owns an interest of about 70 percent. Bernhard Kirschbaum,
Executive Vice President of R&D for Merck Serono, the pharmaceutical arm
of Merck KGaA, points out that, “It means we don’t have to look every day,
every minute at the stock price; instead we can think in somewhat longer pe-
riods. The Merck family has invested a lot in this company. It’s not like with
some other families who might invest here and there and when the one busi-
ness suffers they pull their money out and put it into something else. That’s
not the case with us, which brings additional stability.”
Jo Pisani confirms this. “It does help to insulate them from the flucua-
tions in the market. Certainly you haven’t seen many of those privately held
companies become as distressed as the others. And if you look at the
strategies they’re pursuing, they have a lot more freedom.”
Of course, being family owned can go wrong as well. Witness German
billionaire Adolf Merckle, who threw himself under a train in January, after
losing billions speculating on the stock market. Merckle had taken over his
grandfather's business, creating Phoenix Pharmahandel, Germany's largest
drug wholesaler, and starting generic drug maker Ratiopharm.
One other change in the financial markets that has affected pharma-
ceutical companies is the loss of private equity investors. When credit was
really available, such investors could raise as much as €75 billion, which
meant that even the top pharmaceutical companies were within their
sights. But the current conditions have left those players unable to raise
debt, which has cut off a potential exit route or source of capital for organ-
ic growth for pharma companies.
Bad for researchWhichever way you slice it – mergers, layoffs, spinning off elements
of the business – none of these do anything to drive the engine that has
kept the industry going for decades, innovation in research. Mergers, for
example, usually result in bigger companies with more layers of manage-
ment, something that tends to stifle research, rather than encourage it.
Says Shabeer Hussain, “Innovation is not the primary focus at the mo-
ment, and these activities are just crisis management measures. Such
short-term arrangements enhance their stock prices and are purely busi-
ness-oriented, not innovation-oriented.”
According to the latest PwC report, Pharma 2020, Virtual R&D, Which
path will you take?, this ‘innovation deficit’ has enormous strategic impli-
cations for the industry as a whole: “Pharmaceutical companies need to
decide what they want to concentrate on doing and identify the
core competencies they will require, a process which may in-
volve exiting from some parts of research and development.
“But even those that regard research and development as
a core element of their business will have to make fundamen-
tal alterations in the way they work. They may, for example,
have to focus more heavily on specialty therapies, since most
of the diseases for which there are currently no effective med-
ications or cures are not amenable to mass-market treat-
ments, as well as reducing the time and costs involved in
researching and developing such medicines to ensure that so-
ciety can afford them.”
The truth is, no matter how much the public loves to hate
big pharma – much as we love to hate any powerful industry
with a major impact on our lives – the world needs the pharma-
ceutical industry. Without the innovative research and develop-
ment it funds and carries out, many serious diseases would
remain untreated.
So what’s the answer? Companies – whatever side of the
Atlantic they find themselves on – need to take a different ap-
proach. Instead of gorging themselves on their rivals, then going
on a ruthless job-cutting purge, they need to slim down from
within, stay focused on vital research, find themselves a niche.
Accept that the days of big blockbusters are over. Build a port-
folio of mid-performers – then if they lose one drug to generic
competition, it won’t smash a meteor-sized hole in their profits.
Smart companies, the lucky ones with strong enough cash
flows to ride out the recession, will target emerging markets or
focus on core competencies or rare conditions with high unmet
need. Combined with the stability afforded by private ownership,
this could mean that the European pharmaceutical sector will
emerge from the financial downturn relatively unscathed. n
31www.ngpharma.eu.com
COVER STORY v2:apr09 08/04/2009 13:41 Page 31
With drug development times of ap-
proximately 15 years and subsequent
costs approaching $2 billion by 2010,
pharmaceutical companies are increasingly in
search of processes that can help them consis-
tently deliver a return on investment during the
patent life of a drug. Enterprise level laboratory
information management systems (LIMS) are
key contributors in this effort. Delivering ad-
vanced functionality that is specific to each
stage of the drug development process, so-
phisticated, purpose-built LIMS streamline
processes and costs and present organisa-
tions with unique integration opportunities.
These LIMS provide superior capabilities by
delivering real-time analysis and reports, fa-
cilitating regulatory compliance and product
quality, integrating with the company’s broad-
er network and providing secure access to key
data throughout the organisation.
Thermo Fisher Scientific, the world leader in
serving science, has developed a portfolio of
LIMS that meet the needs of our customers. This
is particularly true in the Life Science market
where laboratory requirements are unique in re-
search and development, discovery, and manu-
facturing. There is no single system that could
answer the unique needs of these laboratories
so our position has been to develop, with the
help of our customers, purpose-built LIMS for
each area of the pharmaceutical value chain.
Generic LIMSHistorically, industry standard LIMS have
only delivered 30-40 percent of specific func-
tionality targeted to each user’s needs, requiring
extensive customisation to make that LIMS func-
tion in that particular setting. Such customisa-
tion is commonly only possible through the use
of proprietary programming languages that are
developed and provided by the LIMS vendor.
The combination of minimal industry-specific
functionality and often out-dated and/or costly
proprietary languages has been particularly
troublesome in the pharmaceutical industry. In
addition, pharmaceutical laboratories normal-
ly create their own user documentation, de-
sign documentation, validation scripts and
help files. As a consequence, the implemen-
tation of LIMS in various laboratory settings
has been, almost without exception, a long,
costly and painful process not only during in-
stallation, but also in operating and maintain-
ing the system over the years.
The growing mandates of global regulatory
compliance and long-term data traceability, as
well as the complexity of laboratory testing and
emphasis on batch versus sample management,
have forced pharmaceutical manufacturers into
lengthy, expensive adaptations of generic LIMS
to meet their specific requirements. Extensive
and costly customisation, validation and im-
plementation periods, in many cases lasting
36 months or more, have become routine, re-
sulting in decreased productivity. However,
with the increasingly higher costs of bringing
a new drug to market, pharmaceutical manu-
facturers cannot afford delaying the imple-
mentation of next generation tools that will
make them more productive.
Generic LIMS shortcomingsAt Thermo Fisher Scientific, we believe that
the challenges facing life science companies can
be ideally addressed using purpose-built solu-
tions that provide as much application-specific
functionality as possible out-of-the-box to meet
the particular needs of various laboratories.
When the required functionality is built into the
base system as standard, it eliminates the need
for user-specific customisations during imple-
mentation. This, in turn, results in reduced vali-
dation time, shortened deployment and easier
ongoing support.
Thermo Fisher Scientific has developed
Darwin LIMS, a fully validated laboratory and
data management system that is being success-
fully implemented worldwide by many of the
largest pharmaceutical manufacturers. Darwin
Enterprise level LIMS – reapingthe benefits of integration
32 www.ngpharma.eu.com
CASE STUDY
Thermo Fisher Scientific:13sept 8/4/09 13:59 Page 32
LIMS is a clear example of how the benefits of
purpose-built LIMS solutions can be found in
pharmaceutical manufacturing. Darwin LIMS is
specifically designed to address, out-of-the-box,
the unique needs of pharmaceutical manufac-
turing R&D and QA/QC laboratories to help
them meet US Food and Drug Administration
(FDA) regulations, achieve significant time sav-
ings in validation efforts and generate cost sav-
ings in personnel and production time.
Darwin’s unique batch and product-orient-
ed design aligns directly with the pharmaceuti-
cal manufacturing processes, allowing
production data to be logically organised, sum-
marised and reported. Darwin LIMS also in-
cludes built-in, dashboard-ready functionality to
allow pharmaceutical laboratory managers to
make faster, more informed decisions. The sys-
tem’s user-friendly, intuitive Microsoft-compati-
ble interface facilitates end-user acceptance and
support for processmodification as part of stan-
dardisation. In addition, Darwin LIMS contains
an environmental monitoring module as stan-
dard, facilitating product qualitymonitoring and
compliance. Further standard functionality in-
cludes dissolution, stability testing and product
and batchmanagement.
LIMS into the enterpriseAccording to the 2008 strategic analysis
of the US Laboratory Information
Management Systems Market by Frost &
Sullivan, market growth indicators are fo-
cused on providing customers with not only
purpose-built LIMS that are fully integrated
with other laboratory equipment, but also
LIMS that easily align with global enterprise
solutions. In addition, preconfigured solu-
tions with test methods for specified indus-
tries will drive growth across all markets.
Today, global deployments of LIMS solu-
tions have becomemore consistent and more
rapid. The implementation of purpose-built
LIMS across the enterprise allows for more
simplified system upgrades, minimised pro-
ject risks and enhanced compliance. In addi-
tion, industry-specific solutions facilitate
enterprise-wide application and training.
These multifaceted benefits help lower the
total cost of ownership of the solution, which
is critical to pharmaceutical companies that
are under ever-increasing pressures to con-
tain costs and increase efficiency. This goal
can be achieved by integrating the LIMS with
instrumentation and enterprise systems,
which can facilitate the global harmonisation
of business processes, automation of opera-
tions and consolidation of data management
in a single system allowing for near-instant
decision-making.
out the enterprise, providing both the integra-
tion of instruments and systems, and the inter-
operability necessary to transform data into
relevant business drivers.
Thermo Fisher’s 25 years of integrating lab-
oratory informaticswith the enterprise has been
built and strengthened by its ongoing partner-
ship with industry leaders such as Microsoft,
Oracle, NextDocs and Symyx, as well as with
members of our Global Partner Alliance pro-
gramme. With Connects, we bring a strategic
vision and the resources to help facilitate
management level discussion about the ne-
cessity of integrating the various sources of
data; including laboratory and related instru-
mentation, enterprise systems (like MES,
PIMS and ERP) and enterprise communication
tools (like SharePoint, BizTalk and document
management systems), thereby elevating the
role of the laboratory in the day-to-day mis-
sion critical decisions required of manage-
ment throughout the enterprise.
ConclusionAtThermoFisher,wehave anopportunity to
leverage our expertise, people and products to
help our customers now respondwithmore cer-
tainty to the many unforeseen challenges that
can oftenmake or break a company.We believe
it’s within our power and our responsibility to
lead themarket in transforming laboratory data
into the most relevant business drivers for
those companies committed to the advance-
ment and integrity of science, and to the
health and safety of the world we live in.
Enterprise-level integration is particularly rel-
evant in today’s business climate where near
instantaneous response is required by life sci-
ence companies to protect the public and the
environment. With Connects, our goal is to
help bring key business knowledge originating
in the laboratory to management at all levels
of the enterprise. The integration of the entire
enterprise will facilitate better data correlation
and collaboration, end-to-end report genera-
tion andmore secure data exchanges, with the
goal of providing management with a dash-
board view of the key business metrics essen-
tial to running the business, and enabling
management to have the critical data they
need before, not after, any point of crisis. �
33www.ngpharma.eu.com
For more information about Thermo Scientific informatics solutions,please visit www.thermo.com/informatics.
In response to market growth indicators,
Thermo Fisher Scientific has introduced a new
informatics initiative aimed at bridging the gap
between laboratory-generated data and the en-
terprise level information that is required for
mission criticalmanagement decisions. Because
of the breadth of our company’s product offer-
ings and our strategic partnerships, we are
uniquely positioned to offer Thermo Scientific
Connects, an enterprise-level solution set that
allows companies to more fully integrate the
work of the laboratory into the enterprise.
Connects enables our customers to extend the
business of science from the laboratory through-
Dave Champagne was named
Vice President and General
Manager of Thermo Fisher
Scientific’s Informatics business in
April 2005. Prior to joining Thermo,
he was President and CEO of
ProActivity Software, an early stage
venture that provides business
process analysis solutions. Earlier,
he was President and CEO of
UPSPRING Software, a
development tools vendor, before it
was acquired by MKS.
Thermo Fisher Scientific:13sept 8/4/09 14:00 Page 33
Much has been written about the difficult situation in which the US pharmaceu-
tical industry finds itself, with several of the bigger companies merging and cut-
ting jobs, but what’s happening here in Europe? For Merck Serono at least, the
outlook is not all bad. When asked if the financial downturn will force the com-
pany to downsize its R&D staff, Bernhard Kirschbaum, Executive Vice
President of Research and Development for Merck Serono, says, “No, I
don’t see that we will have to cut jobs. We are in a more comfortable situation than many of our
bigger competitors who face big challenges with patent expiries. We don’t have significant
patent expiries in the near future, giving us time to bring new drugs to market, and creating a
completely different dynamic than the one that exists in companies who are under pressure.
“We see a significant opportunity to build and create the right momentum and so there is no
talk of job cuts. On the contrary, we are further building our R&D capabilities, particularly in the new
core areas that we have announced.”
Staying in focusThe core areas that Kirschbaum is referring to are oncology, autoimmune and inflammatory dis-
eases and neurodegenerative diseases. “These are our focus areas,” he says.“At the same time we
want to maintain our leadership around the growth hormone and fertility business. But in terms of
research efforts, we’re doing less research for the two latter areas. Until we find cures or better pro-
tection for cancer, there will be a medical need because there are still many people dying, and many
cancers are not very treatable and we are far away from cures.”
34 www.ngpharma.eu.com
The global pharmaceutical industry is facing sometough challenges at the moment: patent expiries, alack of new blockbusters, and now the ongoingcrisis in the financial markets. But Merck Serono’sBernhard Kirschbaum isn’t too worried, as he tellsNGP’s Marie Shields.
THE BIG INTERVIEW
waveRidingthe
Kirschbaum ED:13sept 8/4/09 13:51 Page 34
steadwe can think in somewhat longer periods. I did live through this dur-
ing my time at Aventis, when you always had to look at the stock market
and to sometimes make short-term decisions that were not absolutely in
line with regard to long-term requirements.
“This does not mean we are not ambitious, and it doesn’t mean we
don’t have a lot of pressure and want to bring things forward and not lose
any time. But in our setting, there is no need to do something that helps in
the short term but which in the long termwould be amistake.
“TheMerck family has invested a lot in this company, not just money.
It’s not like with some other families whomight invest here and there and
when theonebusinesssuffers theypull theirmoneyoutandput it intosome-
thing else. That’s not the case with us, which brings additional stability.We
alsohaveboth thechemicalsand thepharmaceuticals
business sectors and this helps us to balance things
out.Thereare timeswhenthepharmabusinessprofits
fromthechemistrybusinessand thereare times, such
as right now, where the chem-
istry business profits from the
pharmabusiness.”
Another benefit that
Kirschbaum finds in working
at Merck Serono is the oppor-
tunity to work in networks rather than silos. This is
part of the reason he chose the company as the
next step in his career. “I chose an organisation
with an open and active mindset, which you par-
ticularly need in the early phase of drug develop-
ment, because you can’t do it all on your own. The
world has changed so dramatically that you could
be as big as you wish as a company, and you will
still need help. You still need the networks and the
access to experts externally.”
Kirschbaum has worked in New York, Paris and
Germany. He believes it’s important, both for him
personally and also as a leader in a global company,
to be exposed to different cultures andnationalities.
“I’ve always enjoyed that interaction,” he says. “I
found each of those places extremely enjoyable,
whether it was the LakeConstance regionwithmany
“We have a strong commitment to and a very nice portfolio in oncol-
ogy, where we are approaching the indications from different angles, at-
tacking tumor cells themselves, the tumor environment and the immune
system.
“Then we have neurodegenerative diseases like Parkinson’s and
Alzheimer’s,where there’s currently only symptomatic treatment. These are
devastating diseases and an increasing burden for an aging population.
The whole industry, including ourselves, is looking for disease-modifying
agents that are able to at least postpone the onset or the progression of
these diseases. That would have a huge impact on the individual patient
andalsoon society, if you think about the explosionof the cost and thebur-
den associated with the aging population.
“Andof courseoneof our big areas ismultiple sclerosis,wheredespite
the fact that there are great drugs, there’s still a need for higher efficacy and
for more convenience, which would then allow better compliance, more
continuity, less frequent injections and less painful or oral alternatives that
are efficacious and safe.With cladribine tablets and their favourable results
from thephase III CLARITY study,wehave theopportunity to serve patients
with a new oral alternative.”
Kirschbaum points out that with rheumatology and autoimmune dis-
eases in general, and even in rheumatoid arthritis, there are still re-
searchers looking desperately for effective, new, safe alternatives. He says
it’s a tough task tobecome curative, and this is evenmore true for other au-
toimmune diseases such as inflammatory bowel disease.
MerckSeronohas a very exciting compound in the context of rheumatol-
ogy: “We are engaged in osteoarthritis and we think with one of our com-
pounds, FGF18, we indeed have a compound that may become the first
disease-modifyingagent.Hereagainwehaveadisease that affects regenera-
tionof the jointsandhitsmanypeople,10timesmorethanRAintermsofpreva-
lence.Youhavethesurgery, thekneeandhipreplacementandotherwiseyou’d
givepainkillersbut that’s oftenmore counterproductive thanbeneficial.
“It’s ambitious because many companies have tried. We have a very
attractive mechanism with the fibroblast growth factor 18 that targets the
articular cartilage and stimulates it to grow. It would be wonderful for the
patients to find something that would be disease-modifying.”
Family valuesThe ability to continue with these important areas of research de-
pends to some extent on a stable working environment. One factor that
helps Merck Serono provide this stability is the fact that it is a family-
owned company.
“This gives us a lot of confidence for the future,” says Kirschbaum. “It
meanswe don’t have to look every day, everyminute at the stock price; in-
36 www.ngpharma.eu.com
Bernhard Kirschbaum is Executive Vice President of
Research and Development for Merck Serono, and a
member of its Executive Management Board. Kirschbaum
joined Merck KGaA in 2005 and was previously Vice
President in Pre-clinical R&D and Head of Global
Technologies. Prior to joining Merck, Kirschbaum was Vice
President Discovery Research for sanofi-aventis. He has also
worked for Aventis and Hoechst Marion Roussel in various
senior positions, and headed the Centre of Applied
Genomics in Martinsried.
“The combination of what the consumers want,what the health agencies want and the discussionaround pricing will lead to more stratifiedapproaches to medicine”
Kirschbaum ED:13sept 8/4/09 13:51 Page 36
opportunities for outdoor activities, or somewhere like New York, where
you can combine a tough academic environment and a high workload with
the best quality entertainment options. And then there was Paris, which
was perfect both with regard to my work at the Pasteur Institute and my pri-
vate life, with a home in the Quartier Latin.
“The toughest part of all those changes was the step into industry, be-
cause for industry I exchanged the espresso at noon in a nice Parisian café
with the canteen next to the chemical plant. But what I learned in all these
different situations was that I had to approach each with the attitude that,
independently of how it turned it, it would be an important experience for
me that I would profit from in one way or another. This attitude has made
me quite relaxed in approaching challenges.”
In terms of the differences between the academic world and the world
of big pharma, Kirschbaum says that as a young scientist, it’s extremely re-
warding if you are associated with a compound that makes it through de-
velopment. “There was one compound that I accompanied to the market
at the beginning of my career and that was just a great experience and a
huge learning curve. This was one of the reasons why I have stayed in the
industry, because the experience is so manifold and so broad.”
Changing timesRheumatic and autoimmune disease research has been through
many changes since Kirschbaum started working in the area in the mid-
1990s. “Then, methotrexate was the generic standard therapy. There
were some other drugs that showed efficacy – they had serious side ef-
fects, but they were cheap, and you needed to beat this type of efficacy.
During this period several oral compounds were profiled at the same
time as injectibles such as the anti-TNF treatments, which completely
changed the environment.
“The development during the past decade has been dramatic. It was
interesting to see such a field where people were on the one hand anxious
to treat the pain and on the other hand there were cheap generic com-
Kirschbaum ED:13sept 8/4/09 14:14 Page 37
pounds available and you had to decide if it was worth the effort of em-
barking on further work. There were already treatment options but there
was – and still is –medical need in this area. For example, there are people
who are not able to stay on a certain therapy because at some point they
can’t simply stand it any longer, and they need other options.”
MerckSerono’s current pipeline includes Erbitux, which according to
Kirschbaum is becoming an important standard in oncology. “It’s cer-
tainly an important pillar for us to build our oncology portfolio around.
We are continuing to look into alternative indications where Erbitux may
be beneficial.”
“In oncology, it’s very important to have combinations of drugs that
work together to bring an improvement. This was a significant break-
through in colorectal cancer. If this cancer gets reduced to a levelwhere the
metastasis canbe completely resected, this provides the chance for a cure.
The combination of Erbitux treatmentwith subsequent surgery canbeben-
eficial. If you have a patient forwhomsurgery is not an option because it is
not resectable and you can bring it down to a level where it becomes re-
sectable, then this is a significant additional benefit.”
In addition to Erbitux,MerckSeronohas several promising compounds
in later stage development for various cancers. These include cilengitide, a
peptide-like integrin inhibitor which acts as an antiangiogenic agent, and
Stimuvax, for non-small cell lung cancer, which Kirschbaum says could be
extremely exciting in the development of a vaccine for cancer. “It would be
the first successful vaccine for cancer. Of course the verdict is still out as to
whether it will work in a larger patient population,” Kirschbaum explains.
“That’s to be tested now in phase III.”
Biomarkers remain an important element in the company’s cancer re-
search. “Eachofour trials hasanassociationwithabiomarker,”Kirschbaum
explains. “Withmanyof our products, we either associate themwith certain
markers or we associate themwith single nucleotide polymorphisms. As a
midsizedcompany,weare inabetterposition to tackle this than thebigphar-
ma companies, whomayworry about losingmarket share.
“The combination of what the consumers want, what the health agen-
cies want and the discussion around pricing will inevitably lead us tomore
stratified approaches to medicine. Those companies who embark on this
earlyonwill havesetastandardandalsowill have thechance tocreatemore
credibility in the community because you can say, ‘I won’t give it to people
who have no chance to benefit from it, but I can stratify the population.’ Of
course we can never be 100 percent sure, but we can stratify it in a way that
thosepeoplewhotake thecompoundhaveabetter chanceofbenefiting.This
is a very ethical thing to do,whichwehave an obligation to engage in.
“We also have compounds for various autoimmune diseases in the
pipeline. A compoundcalledatacicept is being investigated in several differ-
ent areas such as RA, lupus andMS. This is a compound that neutralises B-
cell growth factors and therefore controls B-cell response. There is FGF18 for
osteoarthritis,which is inearly clinical development.Westill havea longway
togobutweare reallyexcitedabout this compound. It couldevenhavecom-
pany-transforming potential if it is successful.
“In addition to such diseases, we are tackling rare diseases such as in-
heritedphenylketonuria.Our compoundKuvan,whichprovides thefirst ther-
apy for this raredisease, has recentlybeenapproved in theEuropeanUnion.
It may not be the ultimate blockbuster, but if you have the chance to bring
this type of treatment to the patient, you should do it.”
Ramping upMerck Serono recently announced a $50million expansion of its fa-
cility in Billerica, near Boston, Massachusetts. As a primarily European-
based company, Merck Serono is looking to build up significant presence
in the US.
“Historically we had two sites in the US – one from Merck and one
from Serono – and we said that we need to bring those people together
and we are willing to invest in a nice campus there. We brought the dis-
covery research campus together with our technical operations facilities
at a site where there is the potential for further expansion eventually if
we decide to invest more.
“We want to create these hubs, not only to ensure a fully integrated
group of people that covers the value chain, but also in terms of having
good local interactions with excellent partners in academia and biotech.
Boston is a very good place to do this.We have a significant group there
that works on oncology, and again it’s important that they are embed-
ded in the local networks. And we have our endocrinology, our growth
hormone and our fertility approaches located there.
“There’sa lot of excitement over in Boston.We have just been ranked
in the top 10 of biotech employers by Sciencemagazine, and we have an
all-time low attrition rate in research in the Boston area. It has always
been double digit before and now we are well in the single digits, and
that’s a great achievement, especially if you remember that we just
formed Merck Serono two years ago. There’s a remarkable stability and
loyalty there, which you usually don’t see in these US regions with heavy
pharma presence.”
The emphasis on networks rather than silos also helps to create an
R&D continuum. Kirschbaum says that whenever you make a surgical cut
between research and development, you end up with silos where people
don’t interact very effectively. “We have created a structure where people
are interactingmuchmore. They are encouragedboth by the structure and
bymanagement to interact, andweare seeinggoodprogress in this. As one
of themost recent activities in this area, we havemerged the research and
development departments into one function, headed by myself. It is a big
advantage to have everybody around one table.
“Weare also developing relationshipswith university clinics andother
external partners that could be involved in early clinical development. We
have interestingmodels inBoston, theRhine-Main-Neckar area inGermany
and also inGeneva – for example,with theUniversity of Lausanne. It’s time
to try newmodels, and thedifferent partners involved aremuchmore open
to this. The stratifiedmedicine approach also calls for these types of inter-
actions. Youneed tobuild these things very early in your approach, because
otherwise you lose a lot of timeand risk not bringing your compound to the
patient.”
In the end it comes down to commitment and a willingness to excel
during times of change, both of which Kirschbaum and his company seem
to have in spades. “There is a very strong commitment to innovation. We
are currently spending €1 billion on R&D every year, which ismore than 20percent ofMerck Serono’s total revenues. This also shows if you look at the
recent investmentswehavemade in new technologies that couldbringnew
drug-likemolecules to themarket.”
It certainly sounds as if Merck Serono is well placed to ride out the fi-
nancial downturn, and emerge successful on the other side. �
39www.ngpharma.eu.com
Kirschbaum ED:13sept 8/4/09 13:51 Page 39
With the state of the pharmaceutical industry beginning to
reflect that of thefinancialmarkets,weare starting to see
big drug companies buying out those unable tomaintain
a respectable share price. In a multi-billion dollar indus-
try, differentiation from competitors is key to keeping
one’s head above water, and Shire’s entire corporate structure is based
upon this principle.
In a bid to stay competitive in the trend of large pharma company buy-
outs, Shire has adopted a strategy that sets it apart. “We’re a highly spe-
cialised business in that we focus on diseases that are very rare and have
a very high unmet meet,” explains Sylvie Grégoire, President of Human
Genetic Therapies. “Our populations qualify as orphan,which confers a cer-
tain protection in termsof intellectual property from thegovernments in the
US, Japan and Europe.
“Ourportfolioofproducts intheHumanGeneticTherapiesbusinessfocus-
eson thevery rareendof theorphandiseases: the target populationswe treat
arebetween2000and3000.Whatthatmeansisthatthedevelopmentprograms
inordertobeabletobringproductstothemarkethavetobeglobal innaturebe-
causewhen I say2000, Imean2000patientsworldwide,”explainsGrégoire.
By focusingonanicheareaofpatient care,Shiremust search theworld to
findpatientstocompleteitsclinicalstudies,andasaresultmustoperateinover
43countriestocreateaviablebusinessmodel.Commercialisationofproduct is
very important to completing themodel; the success of sucha strategy canbe
seen in two of the company’s currently marketed products, Elaprase and
Replagal,whichareusedinover43countriesasenzymereplacementtherapies.
This business strategy has not necessarily been a safe one, but the
choice to develop and bring products to themarket in such a way has ulti-
mately generated sufficient profits, despite the higher price of such prod-
ucts and the rarity of patients available for treatment. “Governments and
40 www.ngpharma.eu.com
FROM THE CROWD
FEATURE
Mike Cola and Sylvie Grégoire of Shire Pharmaceuticals explain whybeing different is increasingly important in the dark days of economicrecession. By Natalie Brandweiner
OUTSTANDING
“This year we anticipate doing a littleover €1.5 billion in revenue out of ourSpecialty Pharma business” Mike Cola
Cola Gre?goire:13sept 8/4/09 13:42 Page 40
the populations we serve are willing to pay for such products because the
impact they have on patients’ lives is significant,” says Grégoire. “If they
don’t have replacement therapies or the drugs thatwedevelop, their qual-
ity of life results in very highmorbidity as well as often early mortality.”
New productsShire’s aim is to introduceeight newproducts to such rare diseasepop-
ulations by 2015, which it hopes will bring in €1.1 billion in revenue. Thecompany’s expansion is due to the strategic reinvestment of this revenue
into new drug development. As a big fish in a rela-
tively small pond, Grégoire believes focusing on a
nichemarket will benefit the company, in compar-
ison to the approach of larger, more generic, phar-
ma companies.
“Those life-changing products are the rev-
enue generators, but they also provide hope for
those with rare and dire diseases, and that really
motivates our team, who come to work every day
with thehopeof helping and transforming families’
lives as well as the patients’ lives.”
However, producing drugswith suchhigh-pro-
file capabilities brings with it both challenges and
responsibilities. “It’s a highly specialised area, but
within our humangenetic therapies businesswe’ve
developed the internal capabilities to counter this.
You can leverage those capabilities in terms of
both the clinical development of the products and
the commercial infrastructure you have. Once
you’ve done it with success with one product, you
can leverage the know-how aswell as the capabil-
ities to add products to that particular model, as
opposed to being inmultiple therapeutic areas.
“It doesn’t matter whether the specific thera-
peutic areas are cardiovascular or GI. Generally,
these patients with rare genetic diseases have
multi-organ systemproblems, so it’s a generalway
of developing multi-organ disease expertise, and
we can leverage that know-how internally. Clearly,
a very good understanding of the regulatory ap-
proval process, as well of as pricing and reim-
bursement, in all of these countries is key,”
explains Grégoire.
Wider rangeProduct focus is obviously an essential com-
ponent of Shire’s success. As Mike Cola, President of Specialty
Pharmaceuticals explains, the company’s Specialty Pharmaceuticals busi-
ness model is far more wide ranging, with a vast array of drug programs.
“We have everything from an orphan drug in Xagrid in Europe all the way
to something that’s more of amassmarketed product in the US for ADHD,
Vyvanse, and in the past, Adderall XR.
“Wehave three business units now in our Specialty Pharmabusiness,
ADHD, GI and EPU, our emerging products business unit.Within each one
of those business unitswehave sales forces fairlywell aligned. These units
try to run as semi-autonomous companies within a company focused very
much on the needs of the specialist physician, which is very similar to the
model in our Human Genetic Therapies business that Sylvie oversees.
Within the ADHD area, our lead product is Vyvanse, which we launched
about 18months ago and it is growing nicely.We think it will be themarket
leader over time.”
EPU is the side of the business that allows the company to become
more commercial. “We haven’t talked a lot it, but we have a number of
Carrierwave initiatives underway. Carrierwave is
a technology that was acquired in our 2007 ac-
quisition of NewRiver Pharmaceuticals. It came
along with Vyvanse and we’re discovering ways
to apply that technology.We hope to be able to
sharemore about it by themiddle of 2009.
“Overall the consistency between the two
businesses is there. We leverage the same
model and the sameprinciples, they’re just a lit-
tle bit different as far as size and scale. This year
we anticipate doing a little over €1.5 billion inrevenue out of our Specialty Pharma business
andwe’ll drop somewhere in the neighborhood
of €75million to our overall bottom line. So our
Specialty Pharma unit is a growing business,”
says Cola.”
SurvivalAs a specialised pharma company with a
much smaller sales force and very fewpatented
products, it’s certainly going to be easier for
Shire than for the larger andmore generic phar-
ma companies to survive the current challenges,
given the financial markets.
“Beyond Adderall XR, we do not have a lot
of patent exposure. If you look at the IP of our
current products it goes out very far into the
2023-2024 range,” explains Cola.
“If you look at all our diseases they’re high-
ly symptomatic. We create tremendous value
for the patient. If these patients don’t have
their medication they will feel the difference
quickly, as opposed to an asymptomatic drug
lowering your cholesterol or even your blood
pressure, where youmay not notice it for a long
period of time.
“That differentiating factor – focusing on symptomatic conditions –
helps us.Weprovide a lot of value for a smaller patient population and that
value we don’t think will be taken away from these folks through reduced
access to healthcare.”
Despite the upcoming loss of patent protection on Adderall, Shire has
a portfolio of productswide and big enough for it to cover the gap. Cola re-
lates the company’s growth story, and explains that with six new product
launches in the last three years, that will continue to drive the company’s
41www.ngpharma.eu.com
Mike Cola is President ofSpecialty Pharmaceuticals
Sylvie Grégoire is President ofHuman Genetic Therapies
Cola Gre?goire:13sept 8/4/09 13:43 Page 41
“Out of that 3500 people we’ve
hired at Shire, we’ve hired close to 2500
of them in the last three andahalf years;
so I’ve seen tremendous changes.We’re
trying to consolidate all of those recent
hires and make things more efficient. If
you think of the state of the company
whenMatt Emmens took over as CEO in
2003, it reallywasnot inagoodplaceand
each year we’ve added a fair amount of
newproductsandnewstructure,building
newopportunities for Shire,” saysCola.
Grégoireexplains thecompany’sap-
proach for the future, highlighting re-
cruitment of people to Shire’s already
expanding operations to be central to
strategy. “In our Human Genetic
Therapies business, we’ve added 300
people in 2007 and 2008 to our team,
and in 2009we have plans to addmore
than 275 people.
“We plan on hiring to support our
growingbusiness, specifically,we’re launchingamedicine in Europe, Firazyr
and we are now hiring people to work on that project. We’re projecting to
hire in 2009 in a prudent way, based on the fact that we have the uncer-
tainties that come with XR. It’s completely justified by the growth of the
business and achieving the goals of the business,” she explains.
StrategyGrégoire’s experience in both the traditional and the entrepreneurial
aspects of the pharmaceutical industry have contributed to her tenure at
Shire andher influenceon the company’s strategy. As she explains, “These
kindsof experiences in termsof business, thinking about how to runa com-
pany in a nimble and entrepreneurial fashion and a global view is
very important, and is something that helps me in mapping out
the potential for our HGT business to grow.
“In just that year and a quarter that I’ve been here we’ve
added a significant amount of projects to the pipeline through
business development and our HGT business has a research
component. So we look at what’s in our research portfolio and
we’re always working on different potential new drugs that will
enter the pipeline internally, and externally. The economic dif-
ficulties that small companies are facing today in terms of rais-
ing capital whether they’re private or public provide an opportunity for
Shire to aggressively consider acquisitions of products that fit our strat-
egy, making sure that we focus on that specialist strategy. We have a
courageous way of approaching business opportunities that come from
the external world and want to manage the company in a non-big phar-
ma way.”
That non-big pharma way certainly seems to be an approach that has
boosted the company’s revenue andallowed it to further its development of
new compounds. However, with the credit crunch expecting to last at least
well into 2010, only timewill tell if such a strategywill pay off. �
success. “We knowwe need towork through the end of the life for Adderall
XR.We understand the dynamic of losing the exclusivity in April, but in fact
wehaveacitizens’petition inplace.Wedon’t knowthe impactof thecitizens’
petition. Theremay not bemulti-source generics but we’re not counting on
that happening, so it’s really agrowthstorywith thenewproducts,” hesays.
Grégoire attributes a large portion of the company’s growth to its re-
cently launchedproducts. “They still have a lot of growth in them,whether
it’s from our Specialty Pharma business or our Human Genetic Therapies
business. From the growth perspective of our currently marketed medi-
cines, and then the pipeline products that we have, we feel it’s a nice story
for the overall growth beyond the Adderall XR story, which had been a sig-
nificant part of Shire’s history. In our Human Genetic Therapies business,
we’ve added 300 people in 2007 and 2008 to our team, and in 2009 we
have plans to addmore than 275 people.”
New jobsShire’s development as a company is largely due to the substantial
growth it has undergone in the last two to three years. It currently employs
about 3500 people globally, with a sales force of approximately 1400 to
1500 people; without having thousands of salespeople relying on what’s
going to be next in the pipeline, themodel becomesmuchmore efficient.
42 www.ngpharma.eu.com
“We have a courageous way ofapproaching business opportunities andwant to manage the company in a non-bigpharma way” Sylvie Grégoire
Shire Human Genetic Therapies, Cambridge, Massachusetts, US
Cola Gre?goire:13sept 8/4/09 13:43 Page 42
44 www.ngpharma.eu.com
people who are passionate about moving the process along and de-
veloping it continuously, you will not be leading edge.”
Once you have the right people in place, the next issue to be
tackled is the constraints of legacy equipment. Sandell says this can
be overcome by building in fl exibility from the very beginning, “When
we’re building a new facility, it’s very much about building in fl exibility
in line with our knowledge. Of course there will still be constraints, but
it’s mostly about getting to a point in the construction of a facility where
you are very aware about your bottlenecks and your constraints so that
you have made conscious decisions as to what you end up with.
“When you have constructed the facility, you will then know the
ways out of potential future problems. You have to do a really big,
good planning exercise before you start building so that you know if
you build it like this, you will have a bottleneck in say, step one. Or
if you do it like this, you can remove the bottleneck in step one, but
then step four becomes the bottleneck. You have to think forward and
see where this facility could go in the future. If you have a conscious-
For Kim Sandell, building the ultimate pharmaceutical
manufacturing facility is not about bricks and mortar or
machinery – it’s about people. Sandell, who is Pfi zer’s Di-
rector of Manufacturing, knows what he’s talking about.
He is currently project director for a new biotech plant
under construction in Strängnäs, Sweden. He believes
that of manufacturing’s four elements – equipment, product material,
processes and people – people are the most important.
“If you have a newly constructed facility or an old facility, you’re
more or less stuck with the equipment. It sits there. So you need to
work around with processes, or you need to fi nd clever ways of utilis-
ing people better, such as other ways of working shifts, for example.
It’s also about empowering people to feel that, ‘I can do my job and
take decisions within my responsibility.’
“The people element of it, that’s the most important thing; that’s
where you can make a difference. Everyone can buy the right equip-
ment, everyone can get a fairly good process, but if you don’t have
CUT DOWN, COLLABORATE AND FOCUS ON THE CUSTOMERPfi zer’s Kim Sandell lets NGP in on his vision for the manufacturing facility of the future.
MANUFACTURING
SENDALL ED P44,45 47,48.indd 44 8/4/09 13:47:42
ness about that, it’s much easier to work around. Otherwise, if you
build something for a certain purpose described in the business
case at that point, you can be sure that it will change in fi ve years,
and then you don’t have the fl exibility.”
Manufacturing is an integral part of the pharmaceutical proc-
ess, but it is often not considered thoroughly enough in the design
process. Sandell says this will change, with the facilities of the
future being designed to be multipurpose. “You have to have
someone with a good imagination and good knowledge about
what might come, and you have to make some educated guesses,
so that you don’t focus solely on that one product. Building a dedi-
cated facility is a terrible waste of capital. You need to look at a
broader perspective, but you still have to go back to the process
that you’re aiming at to start with to make sure that that you can
reach the quality attributes you need.
“One of the most crucial elements is having customer input from
the beginning. You need to think about things like user demands
and fl exibility when the design is still only on paper. If you do it later,
you will already have built in restrictions that might be less desirable.
It’s about getting a customer focus: you need to have the customer on
board in the product early so that you can make the right decisions.
“Otherwise, you might miss the long-term goal; you might not give
enough consideration to lifecycle costs, for example. It might be wise
to spend €10 million on something rather than €1 million, because if
you choose the €1 million engineering solution, it might not help in the
long run, because you might need to spend €20 million on people in
the following 10 years because you need a complicated workaround.”
Breaking down silosSandell says that part of the innovation process for the future of
manufacturing will involve encouraging people to think in a broader
context. “It’s very much about getting a mixture of people and trying
not to look at the departmental things. It’s about saying, ‘I’m work-
Kim Sandell is Director of
Manufacturing at Pfi zer. He is
responsible for the end-user
representation and start-up
activities for the new biotech
plant being constructed in
Strängnäs, Sweden.
“When it comes to Lean manufacturing, the pharmaceutical industry is way behind, maybe 15 or 20 years”
45www.ngpharma.eu.com
SENDALL ED P44,45 47,48.indd 45 8/4/09 13:47:53
47www.ngpharma.eu.com
There are those who say that the pharmaceutical industry should
not only break down silos within its own walls, but that it also needs to
reach out and learn from other industries when it comes to introducing
more future-oriented manufacturing processes. In much the same way
that Novartis has said it wants to become the Toyota of the pharma-
ceutical industry, Sandell says that his company can learn from other
manufacturers on its home turf.
“I think that’s the same thing for us. We are fortunate being in
Strängnäs in Sweden; we are close to Södertälje where we have
Scania, the big truck manufacturer, and they are really advanced in
Lean manufacturing. The
pharmaceutical industry is
way behind on this, way,
way behind, maybe 15 or 20
years. We definitely have to
step up our performance.
“We can make a quick
comparison on the existing
processes we have today
and the existing facility and compare that to the new facility that we’re
building up now. We will produce the same products, but we have a new
generation of process. Today we need to handle about nine batches to
get to one final batch of a certain size. In the facility of the future, we will
be able to handle one batch all the way through with a three times higher
yield. So we are replacing 27 batches with one batch.
“Those are the things you have to do to move forward. You
can’t just have a lab model that you scale up 1000 times; you need
ing for the capital product, so I’m focusing on my parts in the capital
things. I look at equipment.’
“But you also have to have someone coming from the process side
talking to these people and saying, ‘Yes, but if you do it like this, it will
be much more beneficial from a process point of view.’ It’s all about
mixing a team, and as a manager being proactive in that and bringing
in a cross-functional team. Somehow you have to, as a manager, force
people together, because it’s very easy to sit in your silo and say, ‘I’ll
do my work and he’ll do his.’ And that’s not the way of the future.”
One concept in streamlining which many other industries have
introduced, is continuous manufacturing, but Sandell points out that
this method is not particularly suitable for the pharmaceutical indus-
try, which tends to stick to the batch process. “We are working with
E. coli fermentation, for example. E. coli is a really rapid organism to
work with: it grows for 48 hours, and after that it has generated so
much cell mass, you can’t handle it within the equipment. You have to
have a batch break. I think we’ll still stay with batches for a long, long
time. You do need to have a process where the batch flows smoothly
through the system so that you don’t have to wait to empty the whole
facility, but until batch one is done, you can’t start batch two. It will
never be a fully continuous process.
“The other big drawback of having a continuous process when
you’re working with fermentation and high potential drugs, is that
you have such enormous value in the facility, it’s nice to have isolated
batches if something goes wrong. It could be very expensive if you have
continuous operations and it takes 10 days to shut the facility down.
That might mean you have lost several million euros worth of product.”
“Building a dedicated facility is a terrible waste of capital”
SENDALL ED P44,45 47,48.indd 47 8/4/09 13:47:59
48 www.ngpharma.eu.comwww.ngpharma.eu.com
Given this, what other metrics can we then use to measure op-
erational excellence, because everyone says cost is the driver, be-
cause it gets the executive buy-in. How can we ensure operational
excellence moves in the way of empowering the people to do well
without threatening their livelihood?
Sandell says it’s about showing what you can do with the facil-
ity and the equipment you have. “Say that you can be so effi cient
so that you can free up 70 percent of the capacity. Then it’s about,
for management, fi lling that capacity; it’s not about trying to shut it
down or laying off people. We need to fi nd something to fi ll it with,
and if we don’t have products in our own pipeline, we can try some-
thing else, such as going out to do contract manufacturing.
“We can show that we will free up this capacity, but that it
should be used for something else. Otherwise, you won’t get those
great benefi ts that you might think, because you’re still saving
money, but you might spend things in capital to make these im-
provements, and you’re still stuck with the same volumes. All that
goes back to the same volumes, and you don’t get the big leverage
on the improvements that you would get if you could still utilise all
the capacity you have.”
In the end, Sandell is looking to make Pfi zer a leaner, more fl exible
manufacturing entity. “We would like to fi ll up what we have in spare
in terms of other products, and if it’s not
a Pfi zer product, it will be great if we
could fi nd a third party, and we’re work-
ing on those strategies. It’s not all about
saving, saving, saving, cutting away and
cutting away. Freeing up capacity is more
the thing; fi lling that up.”
And ultimately, Sandell says, the
big drug companies can use this to take
back ground in the battle against the
generics. “You can take the electronics
industry as an example,” he explains.
“There are a lot of joint ventures around
facilities where they are producing the
same kind of microchips, but it might be Phillips or Sony or someone
else using the same facility; the only thing you are changing is the
layout of the plasma screen.
“In the same way, why not have a growth hormone production
site where you have a joint venture of fi ve big companies making
growth hormone. Why should they all have separate facilities? If
you consolidate that into one facility, you get much better gain out
of that facility and you might utilise the capacity up to 90 percent
instead of having fi ve facilities that might be used to 50 percent.
“We need to go to more alliances like that to, into the future and
think in a much less conventional way. If you look at all other in-
dustries, this is not something new. But in pharmaceuticals we have
been too protective.”
Once it opens up to these new ideas, pharmaceutical manu-
facturing will never be the same again. It may even prove to be the
secret weapon that helps big pharma stave off generic competition
and come through the recession more or less intact.
to look at around step one – what effect does that have? – to step
two, and try to get into a free-floating thing so that you can have a
batch flowing through.
“Today we have to have a lot of intermediate steps, and that
wastes a lot of time, because you need to collect a product, and then
start the next step. But in the new facility, we can start from point A
and run all the way to point Z without having any stops. We’ve been
more moving toward that and looking at less intermediate steps and
trying to gain yields as well – and of course, looking at waste time.
“We will reduce the lead time on these processes with about 75
percent moving from the old facility to the new facility, just because
it’s a more streamlined process and we can streamline work around it
as well. Just imagine handling 27 batches at the compared to one; it’s
a huge impact.”
Reining in spendingSandell believes there is no need for enormous capital expend-
iture in creating and building these new labs. “That’s the beauty of
it: the new processes don’t have a new specification. They use the
old specification, so we can use all the old methods. The analytical
labs stays intact. You use the old labs for doing the new processes,
so what you are doing is freeing up a lot of time in those labs for
doing more production or using per-
sonnel, wherever the needs are. The
best thing would be if you could have
more product coming in and you can
do even more with the same amount of
people. Otherwise, you would have to
take away people if the volume stays
the same.
“The dilemma you end up with
when you are working with operational
excellence is you have to be very care-
ful that you don’t start to use it solely
as a savings exercise, because that
takes away all the engagement from
people. They will start thinking, ‘If I do good work here, that might
mean that I don’t have a job on Monday.’ It’s very important that
operational excellence is about freeing up capacity and then trying
to fill that capacity.
“It’s not about freeing up people and taking them away and
minimising the organisation. I guess that’s why companies like
Toyota and Scania have been really good at this, because they have
been working from one capacity base, and they needed to increase
capacity. It has not been about being more effi cient in that way, but
they gain all the effi ciency anyhow. It’s all about doing more with
what you have.
“I’m a bit worried about the turmoil in the pharmaceutical industry
now, because it’s more about doing – or saving money. Even at Pfi zer
this operational excellence initiative that we’re running now more or
less started as a saving exercise. That doesn’t empower people, and
that doesn’t engage people because in the course of the work, you
might lose your job when you are making improvements.”
“When you’re working with high potential drugs, it could be very expensive if something goes wrong and it takes 10 days to shut the facility down”
SENDALL ED P44,45 47,48.indd 48 8/4/09 13:48:02
times on the machines have to be extremely
short. For a complete changeover from our
machinery, for instancing changing of pack-
aging five vials to 10 syringes in combination
takes about 30-45 minutes.
We have seen a clear trend that time to
market is an issue. They build less and less
stock, which is also capital, and they want to
make sure they can package on their machine
whatever they want, whenever they want, and
changeover and flexibility of the machine is of
the essence. Today you buy a syringe machine
to package syringes, and in two years maybe
you will have to package injector pens, so you
want to make sure the equipment you spend
millions on can be retrofitted, and that is its
changeover flexibility, that’s the key in the
pharmaceutical market today.
NGP.What role does product packaging play in
ensuring medicines are safe from counterfeit
and tampering?
MZ.Obviously, product packaging plays amajor
role besides tight control of the distribution
channels. The features used on pharmaceutical
secondary packaging are many. Dividella can
offer features, such as hotmelt tamper evidence
closure on the TopLoad carton and cardboard
tamper evidence features on every single prod-
uct inside a TopLoad carton. (For instance every
single syringe in a multi-syringe presentation is
protected individually.)
Other features include the print and/or la-
belling features on theouter side of theTopLoad
carton that are necessary for a real track and
trace (this can be datamatrix codes, serial num-
NGP. How can the supply chain be operated
to help in the fight about counterfeit medi-
cines?
Manfred Zurkirch. There are different philoso-
phies. One of them is making sure that the final
patient, the customer, doesn’t get a counterfeit
medicine; that’s the easier way. The more com-
plicated one, the full-blown track and trace,
makes sure not only that it doesn’t happen, but
if it does, it also finds out exactly which type of
supply chain it has been done in and by whom.
This is tricky, and the pharmaceutical company
has to make sure that it has clear control over
the distribution channels down to the doctor or
the final patient bywhatevermeans. This canbe
ready in the future via RFID.
I’m skeptical that you canhave full technical
control until the end. Youhave to know theways
your products go and have a trust relationship
with someof the doctors; otherwise, you can al-
ways cheat.
NGP. How can time to market be achieved with
the shortest possible changeover time?
MZ. That’s one of the strengths of our compa-
ny, and we have seen, especially in the last
few years, that product batches are getting
smaller and smaller. This means that since
products are becoming more expensive,
they’re more specialised. Pharmaceutical
companies want to produce packages on the
same machine, and so they change over sev-
eral times a day to make sure that they do so
just in time. They get an order for a batch of
50 packs, and then they package those, and
then the next ones, and so the changeover
bers, RFID tags etc.) and special marks on the
cardboard that enable the final customer to ver-
ify where the carton originates from. Normally,
these features aredefined togetherwith the cus-
tomer during the packaging development
process even before discussion about the ma-
chine itself starts. �
Product package efficiency
50 www.ngpharma.eu.com
By Manfred Zurkirch
EXECUTIVE INTERVIEW
Manfred Zurkirch is ManagingDirector of Dividella AG, whichhe joined in 2006 from a leadingSwiss technology group, wherehe was Business Unit Manager,and previously VP Marketingand Sales. His expertise coversthe capital equipment industry,and through his extensive salesactivities he has an excellentknowledge of internationalmarkets. He previously heldvarious technical and managerialpositions in Switzerland’sbiggest telecommunicationscorporation. Zurkirch is adoctorate physicist and he alsoholds a Master’s degree from atop business school in Paris.
“We have seen a clear trend that timeto market is an issue”
Dividella ED:13sept 8/4/09 13:49 Page 50
52 www.ngpharma.eu.com
Cross-divisional solutions will play a
major factor for the success in the future
global supply chain of pharmaceuticals.
End to end integrated solutions is the true com-
petitive edge. The forwarding industry needs
to focus more on integrated solutions, meeting
up with expectations from the pharmaceutical
companies that seek to have cross-divisional
solutions.
The pharmaceutical supply chain is under
great development where the industry is going
from decentralised decision making and func-
tional focus to a model of a true integrated and
value added supply chain model, where cross
functional focus and centre lead strategies are
focus areas.
Warehouse strategies play a signifi cant
role for the supply chain and the potential mar-
kets served. The pharmaceutical industry is
seeking true long time partners that have the
ability in offering all areas of logistical activi-
ties, distribution and warehousing.
The pharmaceutical industry has become
aware of the signifi cant advantage of operat-
ing their supply chain from warehousing to
effective road, airfreight or ocean freight, this
linked with most up to date communication
platforms. The traditional business behaviour
between a logistics supplier and pharmaceuti-
cal companies are changing. Historically there
has been a clean cut in between different solu-
tions, warehousing, airfreight, ocean freight or
road freight.
The future partnerships will span over the
different areas, becoming one integrated solu-
tion. A true global logistics provider must be
able to offer these cross-divisional solutions,
best tailored in any region of the globe where
the customer chooses. It is simply not good
enough only to offer top quality air freight so-
lutions if you can not offer a warehouse opera-
tion tailored to customer needs.
The market demands global solutions
and customers are requesting the ability to
order correct quantities and lower inventory
levels. This brings a change to the order pro-
fi le; orders are becoming smaller. Produc-
tion changes accordingly. This is a challenge
for the distribution of pharmaceuticals.
Consolidation possibilities that can meet
with the lead-time demands of end custom-
ers are highly valuable.
A change of routines in the supply chain
can have dramatic effects if not properly imple-
mented at all levels. With clear communication
the cost of change reduces dramatically.
Global harmonisation enhances the possibility
of maximising effects in a supply chain.
It is the harmonisation and interaction be-
tween the pharmaceutical company, freight
forwarder and carrier that gives the supply
chain success.
There are regional variances in infrastruc-
ture that determine how the supply chain
is operated. A true cross divisional activity
achieves several synergies for both parties.
The fi nancial benefi ts are far greater than if a
customer would operate with three or four dif-
ferent partners for the warehouse, airfreight,
ocean freight and road freight services.
The logistics provider will become more
integrated into the pharmaceutical company
and its full supply chain. Better understanding
the pharmaceutical companies’ demands and
needs will secure a robust service level and at
the same time keep cost down.
Facts are that communication between
parties becomes more effective. The need for
a suitable communication platform is a must.
This part could take some time to adjust to
both parties, but ones up and running acts as
the glue between the parties.
Cross divisional partnering tends to be for
a period of three to fi ve years, this falls in line
with changes that are ongoing in current busi-
ness climate, long term partnering and fewer
partners.
Geodis Group global strategy is to meet
up with the future trends for cross-division-
al demand in the pharmaceutical industry.
Geodis has several partnerships up and run-
ning where a full control, cross-divisional
set up is operated. We see the benefi ts of
this type of approach and seek to partner
with more pharmaceutical producers or
wholesalers.
Geodis Group stand in the forefront of
end to end, cross-divisional solutions for
pharmaceuticals.
INDUSTRY INSIGHT
Cross-divisional integrated solutions
The supply chain has become a competitive edge, a sales argument and at the same time, a key area for cost cutting activities. Time to market plays a signifi cant role for the future.
Martin Svantesson is Vertical
Market Director of Geodis Wilson
Pharmaceuticals. He has 15 years
experience in Global distribution and
holds a Master’s degree in Supply
Chain Management. Svantesson’s
role is to develop Geodis Wilson’s
pharmaceutical distribution solution/
proposal for existing and potential
pharmaceutical customers, as well
as to harmonise a global approach
within Geodis Wilson in regards to
pharmaceutical handling according
to GDP standards.
GeodisWilson.indd 52 8/4/09 13:46:13
54 www.ngpharma.eu.com
In recent years, the life science industry has faced increasing challenges, often due
to long development cycles, uncontrolled failure risks and growing competition. As
SVP and Head of Process Technology at Bayer, Helmut Mothes is discovering new
concepts in the development and manufacturing of drugs to address these issues.
He explains the signifi cant challenges created by the long development cycle for
drugs, and the risks produced by the complexity of the tasks, advising that the solution
for the industry to apply specifi c concepts proven to speed up the process, containing
those risks in its early phases: “If failure happens in an early phase, the risk of having
spent too much money already is avoided,” he says.
According to Mothes, there are three major concepts that you could apply to manage
that process effi ciently. “The fi rst thing you have to do is introduce what you could call
proof of concept or proof of visibility in the developmental cycle very early, and during
the early phases of a developmental project you have to focus on activities that help to
lead to the proof of concept.
“You also need workfl ows, particularly after proof of concept, that are very stand-
ardised, very modular, and that allow you with minimum risk to achieve the goal, to
break through pre-clinical and clinical development, and then to launch the product.
Thirdly, combined with that second concept, it’s necessary to have standardised tech-
nology platforms, particularly with respect to manufacturing. So these are the three
things that are important to speed up the process and to take the risk of failure into early
phases,” says Mothes.
MANUFACTURING
NEW CONCEPTS
IN RISK CONTROL
Bayer’s Helmut Mothes examines the success of Lean and the development of operational excellence.
MOTHES ED P54-56.indd 54 8/4/09 14:33:40
55www.ngpharma.eu.com
“To be really successful in operational excellence you need in-
tegrated programs that address three topics. First of all you need an
assessment of where you are and where you could go with your per-
formance. This assessment has to be neutral. It should not be biased
by beliefs that you carry from the past, so that’s the first element: as-
sessment. Second thing, you need methodology. Very often we get pro-
posals, which we improve, but methodology means you have to have
tools, software and handbooks that guide you through the process of
implementing operational excellence projects. So assessment, meth-
odology, and the third level that is automatically linked to operational
excellence is the topic of sustainable implementation: you need things
that allow you to monitor, to steadily improve the key parameters.
“For example, you need online monitoring with respect to key
parameters: assessment, methodology and sustainable implementa-
tion to bring an integrated approach. At biotechnology services we
have put together a package that integrates these three levels and the
package actually aims at different targets,” he says.
Mothes notes the importance of efficiency in improving speed
and flexibility during drug synthesis in the manufacturing of active
substances. He advises the first step in this to be in synthesizing
an active substance, starting with the technologies that are easy to
scale up, which is often done through the setting up of laboratories
that are able to produce very small quantities in a manner that is
similar to a later production side.
Data managementIn terms of improving handling of information, a more efficient
creation of data is important to transfer some of that failure risk to
earlier phases in the development cycle. Mothes explains that central
to this is the development of a drug, whether chemical compound or
biological, which will create a huge amount of data. However, this
does not come without its challenges.
“The problem arises as to how to manage this data appropriately
and also, a challenge even more important in the future, is how to ex-
tract the right information out of this data to support decision-making.
Essentially, you need efficient ways to manage huge amounts of data,
not only for a single-track development project, but also for a variety of
projects, because that may create additional information and opportu-
nities. Also, combining data management with modelling and computa-
tional tools could allow you to extract further information to create more
insights into structures, things you can see by simply handling data.”
In order to shorten the time between target discovery and ap-
proval of the active substance, Bayer has implemented many of the
standard procedures, from high throughput screening in the early
stages of generating small quantities of an active compound, through
to efficient ways of managing clinical testing.
“Of course, there are new ways to improve the performance,” ex-
plains Mothes. “I would like to describe that with an example, which
is not so much related to drug discovery, but to the synthesis of active
ingredients and how to get an active ingredient or an active substance
from the early stages toward the production scale.”
“For example, when you start a development you generate the
first milligram of a product, and the synthesis route you have chosen
to do that will affect what you have to invest later on in the production
side, it will affect how complex the process development will be, and
it will also affect what the risks are. We try to implement a concept so
that you generate the first milligrams of a product with technologies
that can be easily scaled up and then put into reality in a production
plan: micro technology.
“The reaction is done in a single channel and then later on the pro-
duction is done in a multiple number of channels, but what is happen-
ing in a reaction channel doesn’t change. So scaling up is not really a
problem. This is very simplified, but it makes clear that it is possible
to use the same technology platform when you produce the first mil-
ligrams of active substances, and you use the same principles late in
production. That of course significantly minimises the risk of failure
and also optimises the speed of the positive element processes.”
LeanThe move to Lean and toward operational excellence is continuing
to dominate discussions within the life sciences industry, and so with
it becoming a major topic for biotechnological services, to address
topics related to performance and operation. “The idea is to apply
operational excellence in an integrated manner. We want to operate
the process, the plan and the facility as optimally and as efficiently as
possible, so that’s the target, and this objective is particularly chal-
lenging at the moment with all the changes in raw materials and global
competition,” says Mothes.
Helmut Mothes has been Head of the Process Technology
Division at Bayer Technology Services since January 2002.
Prior to this he worked at Bayer’s Animal Health Business
Group in Mannheim, where he was responsible for operations
(manufacturing, supply chain management and quality
assurance). He began his career at Bayer in 1984, working in the
Process Engineering Department of the Central Research Division.
During his five-year stay in the US, he worked first at Bayer Corp
(formerly Miles Inc) and then at Haarmann & Reimer as manager
of the biotechnology pilot plant and later of citric acid production.
MOTHES ED P54-56.indd 55 8/4/09 13:43:11
56 www.ngpharma.eu.com
Bayer also recently signed a partnership agreement to use their
modelling and simulation software, and as a result has implemented
some of the necessary hardware. “These are the first very promis-
ing projects running,” explains Mothes. “What are we aiming at? We
think that these methods could enhance certain development tasks,
such as the area of codings and in the area of formulations and drug
delivery systems.
“It’s important to integrate these computational methods with
what you do in a standard manner with experiments, and these
computational methods allow you to reduce the number of experi-
ments, but they also allow you to challenge your mental models and
that creates new knowledge. We have applied these things to two
or three actual topics in drug development and we think that these
theoretical methods definitely supplement what we do during the
normal development cycle.”
Innovation Bayer follows a strategy that can be described as openly in-
novative: the complexities of the challenges are only successful if
handled without a network of research units, institutes and univer-
sities. A single company is not capable of providing all the neces-
sary resources, making it essential to build a network of research
collaborations. Mothes names the catalysis centre in Aachen as one
example of this: “It’s one element, together with biomaterial signs,
biotechnology services and the university, which we have set up.
In the centre there are people working from the university but also
Bayer people, and in this environment we are carrying out projects
that are more long term.
“We are going for what we call dream
reactions. Currently, we have a product
that you synthesise with five or six steps.
It would be very beneficial if you could
reduce the steps to get to a polymer from
five or six to let’s say two or three, by com-
bining new technologies, new catalysts
and ionic liquids, and that will reduce raw
material demands and investment.
“Since it’s very long-term research, we
also need some time. That’s the reason we’ve supported the centre
for at least five years, but there are already some developments that
indicate there is a potential. There’s still some way to go, but first re-
sults show that we are very likely to be successful there,” he says.
Innovation is important to Bayer, especially in terms of econom-
ics. “If you look at a product like polycarbonate, then currently you
are doing that in plants where you have several steps. You synthesise
step by step and find the product would be polymer. It is feasible to
take two of the main raw materials, carbon dioxide in this particular
case, and synthesise that polymer. There have been a lot of efforts
in the past to pursue so-called ‘dream reactions’ and in principle
they are plausible, but up until now they haven’t been achievable.
“With nanotechnology, new catalysts and new process tech-
nologies, like micro technology, there is a good opportunity to be
successful.” n
“Important to this process are modular and standardised concepts,
along with being able to prefabricate certain things later on for produc-
tion. Currently active ingredients are manufactured in multi-purpose,
multi-product plants, which require upfront investment, and it’s always
difficult to get a high utilisation in these plants. These multi-purpose,
multi-product plants are very flexible but they are less efficient.
“We try to overcome that problem by moving towards continuous
production, and by small but dedicated
processes to manufacture active ingre-
dients. This could change the way active
substances are manufactured: we move
away from a multi-purpose, multi-product
chemical plant toward a more automotive
kind of production for active substances.
“Whether that will actually happen,
we will see. There are certain challenges in
terms of technology that are required, but
what I consider to be the most important challenge for us is changing
production strategies in such a manner that will require a paradigm
change, because you cannot implement a multi-purpose plan in a
small, dedicated line. That will not allow you to utilise all the benefits,
meaning you have to strategically approach the topic. Therefore
Bayer’s biotechnology services, together with those of other major
companies, have started an initiative we call F3 factory.”
The F3 factory project is supported by the European Commis-
sion, and is set up to allow different companies to put together more
flexible concepts, at a faster pace. Since it involves a paradigm shift,
companies cannot push their individual concepts through. Instead, a
consortium of partners must work together to standardise modules
and interfaces. The change from a multi-purpose, multi-product
bench production toward continuous dedicated production is one of
the trends currently being seen in the life science area.
“We want to operate the process, the plan and the facility as optimally and as efficiently as possible, which is particularly challenging at the moment”
MOTHES ED P54-56.indd 56 8/4/09 13:43:14
NGP. What advantages can companies in the pharmaceutical sector gain
from outsourcing their manufacturing requirements?
Lipmans Zeligmans. The main advantages are optimisation of resources
and concentration on the company’s long-term, strategic processes. Why
is this important? The deepening of the global economic crisis has signifi-
cantly reduced end consumer purchasing power and is leading to increased
competition between producers and the price of goods or services and ef-
fectively reducing their costs is more important than ever. This is driving
all market players to find ways to optimise internal company costs and im-
prove efficiency. One option or solution for improving business is to con-
centrate financial and human resources on the company’s long-term,
strategic processes, and to outsource less important, non-core processes
to companies specialised in effectively providing a specific service.
In the pharmaceuticals industry, companies usually prefer to use con-
tractors to perform standard processes, for which there is no risk of knowl-
edge transfer. These are usually standard production processes, but the
choice of sourcing model depends on each company’s specific strategy.
Jim Kernan. Price pressure and a lack of a strong pipeline are forcing many
manufacturers to reconsider the organisation of their production systems.
Some companies are focusing their efforts on improving manufacturing ef-
ficiency by introducing techniques such as Lean manufacturing. Others are
examining their product portfolio and looking to see if they can drop or sell
off some of the small volume products. Still others are adopting a combi-
nation of both approaches.
At the same time, the growth in demand for personalised medicines,
added to the need for multiple line extensions in order to maintain sales and
the opening of new geographical markets, are leading to greater fragmenta-
tion in the number of finished pack presentations demanded by customers.
In the face of these competing challenges, production of solid or liq-
uid dosage forms in bulk for smaller volume products may still be eco-
nomic. The real problem starts when companies want to fill or pack in short
runs and in multiple presentations.
By outsourcing the short runs to partners that have the flexibility to
respond quickly to customer demand and the ability to keep costs at a rea-
sonable level, mainstream manufacturers can free up their large volume
lines to deliver much improved efficiency with far better customer service,
whilst maintaining a full portfolio of product presentations. Inventory and
working capital can also be kept to a minimum.
Anders Ulfhielm. Pharmaceutical companies doing outsourcing activities
can get substantial cost savings and offset the high capital investment re-
quired for building in-house manufacturing capabilities, while still keep-
ing the compliance and quality level.
The companies can also focus on core competencies. CMOs can today
provide technology transfer and manufacturing capacity quickly as the or-
ganisations are small and flexible, and pharmaceutical companies can get
access to additional expertise and expensive state-of-the-art technologies.
The disadvantages are that companies have reduced the opportunity
to develop internal manufacturing know-how and expertise. The loss of
control of manufacturing is a commonly cited concern of pharma compa-
nies. It can also be a concern regarding the confidentiality of developed pro-
prietary information.
59www.ngpharma.eu.com
ROUNDTABLE
THEADVANTAGESOFOUTSOURCINGOptimising your resources toachieve long-term success, withLipmans Zeligmans, Jim Kernanand Anders Ulfhielm.
OUTSOURCING RT:apr09 08/04/2009 14:41 Page 59
win-win situation.When you use outsourcing companies or CMOs, you will
always have process and manufacturing steps with a high utilisation level,
and thus will have an efficient value-added process with gains for both the
pharmaceutical company and the CMO. It’s all about having the right criti-
cal mass and utilising the best knowledge.
LZ. Entrusting manufacturing to a company specialising in the relevant field,
with experience, know-how, reputation and all of the necessary resources
for providing the respective service, can have a positive impact on compa-
ny cash flow by optimising inventories both for raw materials and finished
products, since the service provider is fully responsible for this. Also, by
optimising capital expenditures, the company saves both time and the re-
sources required to maintain or adapt the necessary infrastructure and ac-
quire technology as this is all done by the service provider to accelerating
the products’s time-to-market. A company specialising in contract manu-
facturing usually arranges the development, manufacturing, packaging and
delivery of the product in accordance with an agreed, binding schedule in
line with JIT system and GDP requirements.
JK. By outsourcing the fragmented elements of their manufacturing re-
quirements, companies can apply the full rigour of lean manufacturing tech-
niques to improve all aspects of their retained mainline activities including
inventory management, production efficiency and customer service.
By choosing a flexible and responsive outsource partner that spe-
cialises in small volume production, they can also be assured that they will
maximise their ability to service the short run presentations effectively. In
both cases, working capital, inventory cycle and cash flow are improved.
Why should companies applying the principles of Lean Manufacturing con-
sider outsourcing their short production runs?
JK. The highly integrated manufacturing models used by the pharmaceuti-
cal industry are well suited to the application of lean manufacturing tech-
niques, but there are a number of precursors that must be put in place in
advance. One key principle is that Lean manufacturing is best applied to a
stable manufacturing environment where the number of changes to pro-
duction schedules and finished product presentations has already been
minimised.
It is no surprise that the old 80/20 rule that applies in so many indus-
tries also applies to the pharmaceutical sector. Typically, 80 percent of the
profit made on pharmaceuticals is made from just 20 percent of the finished
pack presentations, or stock keeping units (SKUs). The remaining 80 percent
of the SKUs are normally small runners and contribute only 20 percent of the
profit. These small runners also account for an inordinate amount of
changeover time. A disproportionate amount of inventory are frequently the
cause of unplanned interruptions to the production schedule and are often
found at the back of the queue, resulting in poor customer service.
To apply Lean manufacturing successfully it is essential to clear the
decks of the small runners so that full focus can be brought to bear on those
SKUs that offer the greatest potential for efficiency gains. In the meantime,
the small volume products should be diverted to suitable units within the
company’s own infrastructure or outsourced to manufacturing partners
who specialise in short run production.
AU. When outsourcing, Lean manufacturing principles should always been
taking into consideration when evaluating all types of manufacturing steps.
This is especially important when you are doing outsourcing activities with
short production runs, to avoid inefficient steps.
LZ. The lengthy process of developing a product, constantly rising manu-
facturing, equipment and marketing costs, and increasing quality and reg-
ulatory requirements can all delay a product’s entry into the market, which
is critical for efficiency in pharmaceutical companies.
By evaluating its processes and outsourcing those requiring big in-
vestments or specific knowledge, a company can concentrate its financial
and human resources on long-term development and strengthening com-
petitiveness in strategically important areas such as R&D and marketing.
This can all have a positive impact on company cash flow by reducing
product costs and time to market. And isn’t that the main goal?
NGP. How can outsourcing help companies reduce costs, reduce invento-
ries, improve lead times and facilitate improved customer service?
AU. You need to create a company outsourcing strategy which shall be ap-
proved by the executive management, find qualified partners and go for a
61www.ngpharma.eu.com
Jim Kernan is one of the founders of PharmaFlow Ltd and
is responsible for Business Development. Prior to
PharmaFlow he held senior positions within Eli Lily, Baxter,
Aventis and most recently as Vice President of International
Manufacturing at Stiefel Laboratories. He has extensive
experience of operations, quality and strategy management
within the life sciences sector.
“Price pressure and a lack of a strongpipeline are forcing many manufacturersto reconsider the organisation of theirproduction systems” Jim Kernan
OUTSOURCING RT:apr09 08/04/2009 13:49 Page 61
LZ. Grindeks has extensive experience in manufacturing a broad spectrum
of pharmaceuticals. We offer full-service contract manufacturing starting
from development and production of APIs and followed by development,
manufacturing, packaging and distribution of various finished dosage
forms (tablets, capsules, ointments, injections, syrups). This allows our cus-
tomers to optimise their costs for purchasing raw materials, maintaining
inventories, manufacturing and logistics. We are flexible in meeting the cus-
tomer needs and offer tailor-made solutions.
Grindeks constantly invests in modern, high-powered technologies – our
newly finished dosage forms plant opened in 2009, complies with world class
pharmaceutical manufacturing standards and has a capacity of 1.5 billion
tablets and 500 million capsules per year. The manufacturing processes are
organised in accordance with GMP and ISO quality standards, the plant is
equipped with a modern automatic control system that regulates the micro-
climate, manages the technical engineering systems and other manufactur-
ing processes and significantly reduces energy consumption.
An equally important factor is the geographical location of Latvia, the
home country of Grindeks. Latvia is a bridge between Europe and Russia,
which means savings on logistics costs for shipping goods from one side
to the other.
The historical background of Grindeks (links with Russia, the CIS and
Eastern countries), its European business culture, the language skills of
its staff, international quality standards and the significant research ca-
pacity of the company add up to creative and farsighted business solutions
at still very reasonable prices.
This is especially attractive to medium sized Western European com-
panies that prefer to do business on a European scale.
AU. Companies need to utilise the CMO fixed assets in an efficient way, pro-
vide an umbrella overview, be flexible, put strong efforts in improving com-
munication levels and establish a professional project management
system. n
NGP. Pharmaceutical companies are coming under increasing pressure to
reduce costs, lower inventory levels and ensure continuity of supply. How
can companies like yours help them to achieve this?
JK. PharmaFlow was established in 2004 by experienced pharmaceuti-
cal professionals to provide contract manufacturing services for small
batch/multiple presentation products in the pharmaceutical and natur-
al healthcare sectors. Operating in a fully GMP licensed facility, we spe-
cialise in providing innovative, flexible, low cost formulation, filling and
packing solutions.
By outsourcing short runs to PharmaFlow, our customers achieve in-
creased production efficiencies, minimise production delays, reduce inven-
tory, improve customer service, shorten their cash cycle time and free up their
own management team’s time to focus on improving all round profitability
62 www.ngpharma.eu.com
Lipmans Zeligmans is the Director of Final Dosage Forms
Manufacturing of Grindeks. He has worked for Grindeks since
1992 and has developed tremendous experience in managing
the manufacturing processes of company products, as well
as for contract-manufacturing partners. Under his guidance
the new solid dosage forms manufacturing plant of Grindeks
was built, equipped and opened in 2009.
Anders Ulfhielm is CEO at Rechon Life Science AB in
Malmö, Sweden. He is responsible for creating a new
pharmaceutical business in Europe with the newly founded
company Rechon Life Science, which has Chinese owners.
He has long experience in executive positions within the
pharmaceutical industry at Astra, Kabi-Pharmacia, Gist-
brocades and Ferring Pharmaceutical.
“By evaluating its processes andoutsourcing those requiring biginvestments or specific knowledge, acompany can concentrate its financialand human resources on long-termdevelopment” Lipmans Zeligmans
“Pharmaceutical companies doingoutsourcing activities can get substantialcost savings and offset the high capitalinvestment required for building in-housemanufacturing capabilities” Anders Ulfhielm
OUTSOURCING RT:apr09 08/04/2009 13:49 Page 62
65www.ngpharma.eu.com
“What we’re trying to do overall is look for the suppliers we can
keep growing with, that we can keep collaborating with, and that we
can get even closer to than we’ve done before. This is the basis of sup-
plier relationship management. But how exactly the crisis is going to
change the landscape, I’m not sure. It’s our job to try to be able to see
ahead of time which are the ones we can work with, which are the ones
we can help, and which are the ones we feel may become a greater
liability, for which we may have to put in contingency plans.
“We recognize the risk, but also the opportunity. We’re fortunate
enough to be working in the pharma industry, which is typically not
as hit during a recession. We’re still impacted, but we’re not hit as
hard as maybe more variable spend industries, although we certainly
have our business pressures to look for effi ciencies and economies of
scale. On the other hand, in our approach the supply base that we deal
with is probably even more fragile. Because to that we do have to be
a little bit cautious.
“Whenever we see some vulnerabilities, as a large, multinational
pharmaceutical company, we can offer stability of volume,” he says.
“We can offer assistance with cash fl ow – there’s a high level of cer-
tainty that we’ll be able to pay our bills at the end of the day – and
we can also look for commitments beyond the immediate short-term
future. So we can both leverage the market opportunities and also
work with our vendors to strengthen them in those times of turbu-
lence, and that’s how we’re adjusting the strategy.”
The effect of this turbulence on the required skill sets for pro-
curement executives is drastic. In a stable market, negotiation is
65www.ngpharma.eu.com
Turbulence ahead_Rashed.indd 65 8/4/09 14:01:06
67www.ngpharma.eu.com
essential, and the relationship between buyer and seller is
balanced: following the transaction, one person will lose some-
thing, one person will gain. Rashed explains that in the current
economic crisis, there are certain situations in which negotiating
and pricing is not suitable. Instead you must take an overall look,
not just from a sourcing leadership aspect, but also considering
the business continuity and the business element.
“Now is the time to make some changes; like everyone else,
we will seek gains to make it through the market conditions,
but we also have to think a bit more longer term, and this goes
beyond the purchase order transaction,” says Rashed.
New strategyA strong department depends on good people, and in 2005
Rashed launched the Talent Management Initiative within the
manufacturing department, which was considered an unusual
move. He did this not because of any personal desire to stand
out, but from a logical and business necessity.
“I had just moved into the European role and there were 100
people in the team, spread across 27 different sites, the majority
of whom had not come from sourcing. We had some who were
new learners coming on board to the function, and it was hard
to distinguish who was who and what they knew. So it originally
started off as an assessment tool, to understand competency
skill levels and requirements – what is the demonstrated versus
the needed? When the findings came out, they were pretty re-
vealing, but then the question was, “What do we do with that
information?
“We identified a lot of gaps. The outcome was that we put
together a program, which was meant to not only address the
talent gaps but also bridge them, and by doing so the needs of
the function were actually evolving faster than we were able to
bridge them, and that’s when it became a more comprehensive
program,” explains Rashed.
The initiative originally started as a tool to correctly assess the
right people, based on skills competencies, but the actual outcome
was far greater than expected. It became a talent development pro-
gram of on-the-job action learning and mentoring, expanding the
potential for growth and contribution of each individual.
“In this way, we can make sure we hold the top performers in the
organisation. It took us about a year and a half to build and is very
useful. It was once again applied out of necessity, but we took that as
a base to expand and make it a global sourcing program, which is now
being carried across all divisions,” he says.
According to Rashed, the difference following the initiative has
been huge. “If you look the quantified numbers, the savings have
undoubtedly been a lot more than in the past. We’ve doubled or
tripled our savings performance from being probably lower middle
of the pack being among the best in class companies. If you look
at the ROI of our functions, measuring the investments versus the
return based on salaries, overhead, the fixed costs and so on, ROI
has pretty much doubled versus what it was, so it has been a very
good investment.
“This has come through a change of requirements in skills and
competencies. The support function, the more traditional role, has
mainly been either automated, delegated, outsourced or sometimes
just purely eliminated, and we’ve constantly moved upstream in the
decision making chain getting closer to a customer, but adding value
much earlier in the process.”
War for talentThere is a well-publicised war for talent within procurement, which
begs the question of exactly what the hiring organisation has to get
right. Rashed advises that the answer to this involves a variety of dimen-
sions, the first being what is the exact level at which you want to hire?
“We can both leverage the market opportunities and also work with our vendors to strengthen them in these times of turbulence”
Sammy Rashed has 17 years’ experience in procurement management across
various industries, and currently heads sourcing globally across Novartis’
pharmaceuticals sites. His areas of expertise include regional program deployment
and talent development in the sourcing function.
Turbulence ahead_Rashed.indd 67 8/4/09 14:31:52
68 www.ngpharma.eu.com
“On one hand, you want to make the job responsibilities as at-
tractive as possible, and at some point they all convert from the soft
skills that we’re looking for. But you get to a certain level where you’re
competing with much more established functions, so you don’t want
to over-specify the requirements needed from the individual.
“You also don’t want to over-promise what the job will do if the re-
ality is you’re building the competencies that you need two years from
now, and it’s not going to be ready to be deployed until then. In other
words, if you hire someone with a strategic mindset, who comes with
a bag full of ideas and wants to change the world, but you put them
behind the desk to tactically negotiate with vendors and ensure com-
pliance, that’s a big mismatch. This has actually happened a few times
in the past. From that perspective, it’s about getting the level right.
“The second thing is the environment. If I look at our company
specifically, we probably offer more sustained and faster career
growth than the average company. Every so many years, you can
expect to move on to the next level. What comes out of that is the
notion of the career curve.
“You can asses an individual’s progress by measuring what has
been the growth historically versus the level of responsibility, and if
you see someone with a relatively flat curve and the position we’re
offering them now is way above the normal trend they’ve had in the
past, that should raise some alarm bells. Likewise, if it’s a parallel
move by someone who’s fully done the role before, they may not get
the same level of satisfaction from coming in and doing the exact
same role again.
“From a summary perspective, it’s about sizing the job, not just
from an aspiration perspective, but also in terms of reality: what will
the job look like, and how does that fit within one’s career growth? The
keyword for me is ‘growth’. The function is growing quickly, and we’re
looking for people who can sustain the growth, come in for a while,
either grow with the function or grow out of the function at some point
back into the business. But at the current moment it’s not a place to
come and look for stability for the next five years. It is moving too
quickly,” explains Rashed.
If there ever was a time for thinking outside the box, this is it.
The recent mergers and acquisitions within the pharma industry
are producing a knock-on affect on the ability to combine different
procurement skill sets. “I can tell you that, from my discussions with
the people impacted, this is having a drastic change within their day
jobs. The quantity of available talent is going up by a tremendous
amount. If anything, when you have mergers and acquisitions, there
are usually a number of redundancies that happen as a result of that,
and the function as a whole is becoming leaner.
“The market has seen more availability of resources in the pro-
curement field, but the quality is not there. People who can navigate
through those turbulent times have got a strategic mindset, a good
vision, good engagement skills and are strong communicators.
These are not the typical skills of procurement professionals. These
we’re still looking for, referring back to the war for talent. Anyone
who has got those qualities will be doing very well in the market
despite the number of people available,” he says.
In terms of how procurement skills will develop over the next few
years, Rashed doesn’t see much change from current trends. The
factors he emphasizes are the ability to understand and align with
the business strategy, the ability to engage with senior stakeholders
– how you get them to accept that you understand their needs and to
trust you sufficiently to give you the leadership of the projects to get
their needs met – and being more entrepreneurial, being able to es-
sentially identify, build, initiate and lead cross-functional projects.
“You’re not working for the business; you’re working with the busi-
ness, often in a project leadership role where you rally different
team members from different functions together towards a common
goal, and you essentially elevate your role internally to a business
productivity champion.
“If I compare skills with technical competencies, the technical
competencies can often be trained; the skills are a bit harder to
come by,” says Rashed. The transferable skills usually play a heavier
weight in the decision to hire or not than the technical competencies,
and you can usually get a feeling as to whether the person has those
skills in the first few minutes of a conversation or an interview, then
the rest becomes a set of validation. It’s finding those candidates
that are ready now with those skills and behaviors. Again, every
other function is looking for the same skills and mindset, we’re not
unique in that,”n
“You can asses an individual’s progress by measuring what
has been the growth historically versus the level of responsibility”
Turbulence ahead_Rashed.indd 68 8/4/09 14:01:21
The pharmaceutical industry is under great pressure, not only because
of the financial crisis but also due to low pipelines, patent end-life,
new therapies, long product development lead times, low asset util-
isation in production facilities and regulatory changes. Driven by future de-
velopment and manufacturing strategies, several major pharmaceutical
companies have initiated an acquisition process to be ready for the indus-
trial challenge which is knocking on the door.
Nevertheless, acquisitions will not only lead to the expected quantifi-
able and qualifiable benefits, but also technical and functional changes are
also inevitable to meet future challenges. Several companies have started
an expedition to increase operational efficiency, reduce the production
costs, accelerate time to market and address niche markets (such as per-
sonalised medicine). This expedition is strongly supported by the regula-
tory authorities, such as the FDA and EMEA, and they encourage the
industry to work on a consistent and high-quality drug product, ensuring
the required therapeutic effect to the patient.
Regulatory authorities emphasise that patient safety comes first and that
a consistent and high-quality end product is a must. In other words, process
understanding and management of process variability are key today for R&D
as well as for manufacturing departments. It took some time but today the
industry confirms that the PAT (process analytical technology) and QbD (qual-
ity by design) concept is key to increasing process understanding.
Also, the new draft Guidance on Process Validation describes the FDA’s
vision on the alignment of process validation activities with the product life-
cycle concept. The guidance clearly references the PAT/QbD concept as a
cornerstone for, “The collection and evaluation of data, from the process
design stage throughout production, which establishes scientific evidence
that a process is capable of consistently delivering quality products.”
Various new technologies find their way into and will change the current
pharmaceutical landscape. Intelligent and multidisciplinary solutions will
allow companies to address current and future market challenges and be-
come more competitive.
The solution of choiceSiemens can be an important partner in helping the industry to improve
R&D and manufacturing performance, supply chain, quality and asset man-
agement. Bringing together the customer’s requirements with Siemens’ ca-
pabilities is our main target. One of the key technologies in which Siemens
is investing which will continue to drastically change the pharma industry
is PAT/QbD. PAT guarantees the quality of the end product by measuring
the critical quality and performance attributes of raw materials, in process
materials and processes in real-time.
The PAT/QbD solution of Siemens, called SIPAT, is the first configurable
and user-friendly PAT/QbD solution which links all PAT tools (for example,
process analysers, multivariate data analysis solutions, off-line laboratory
data, process control data and historical data) together into one real-time
PAT/QbD architecture. SIPAT collects and aligns process data, analyser
data, laboratory off-line data and manual data, executes model-based cal-
culations for quality predictions and views all data in real time for batch
quality analysis, which can also be accessed off-line for analysis and model-
building improvements. A replay function allows new models to be tested
and validated based on historical data.
As several major and smaller pharmaceutical companies have decid-
ed to implement SIPAT in their processes (R&D and/or manufacturing),
SIPAT is becoming the solution of choice for PAT/QbD in the pharmaceuti-
cal industry. Siemens has extensive experience with PAT projects and its
multidisciplinary team can help customers in subjects such as setting up
the DoE (design of experiments), data modelling, risk based analysis, SIPAT
configuration, manufacturing control strategy (including advanced process
control) and integration of SIPAT into the IT landscape. The interaction of
Siemens with the pharmaceutical industry and the intensive communica-
tion with regulatory authorities in the US and Europe have placed Siemens
in a strong position to provide the industry with the products and solutions
which are needed, today and tomorrow. n
Better process understanding
70 www.ngpharma.eu.com
Patrick Boosyut looks at software solutions to help the pharmaceutical industryimplement process analytical technology.
INDUSTRY INSIGHT
Patrick Boosyut is PAT Account Manager in the Production and Quality
Management group of Siemens. He obtained a Master’s degree in
Chemical Engineering, with a specialisation in Biochemistry. He has
worked for seven years in the LIMS (laboratory information management
system) and PLM (product lifecycle management solution) and quality
management systems business. Today he focuses on the application of
PAT/QbD in the pharmaceutical sector, designing PAT/QbD infrastructures
and consulting with companies on their project approaches.
“Technical and functionalchanges are inevitable tomeet future challenges”
SIEMENS:mar09 08/04/2009 13:49 Page 70
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ROUNDTABLE
Strategic outsourcing of manufacturing
The strategic outsourcing of the manufacture of active phar-
maceutical ingredients, intermediates and reagents by the
pharmaceutical industry during the last three decades of
the 20th century was the key driver for the development of the
fi ne chemical industry around the world. There have been periods
when this trend was temporarily halted and in some individual
company cases reversed, but overall the outsourcing trend has
continued. This trend has been driven by the pharmaceutical in-
dustry’s need to focus on its key business drivers, fi rstly research-
ing and fi nding new medicines and treatments, and secondly the
global marketing of their products. The cost, and to some extent
expertise, of chemical manufacture, with its capital-intensive
plant and equipment, is a burden that most medicine manufactur-
ers can no longer afford to bear. Consequently partnering with re-
liable, quality driven and cost-conscious fi ne chemical suppliers
is of vital importance to modern pharmaceutical companies.
Over the last 30 years, many small and medium-sized fi ne
chemical businesses grew on the back of the pharmaceutical in-
dustry’s outsourcing opportunities. This growth in turn attracted
several major chemical corporations who thought that this was an
opportunity to move into higher added-value intermediates. The
bigger companies actively pursued and bought up many small
and medium-sized fi ne chemical units. However, it has become
apparent in the 21st century that they often failed to recognise
that the companies they had bought had built their reputation
on the speed of response, quick local decision-making and fl ex-
ibility that their customers demanded. These characteristics
are not easy to manage in large corporations and more recently
many of the businesses that were acquired have again been spun
out, freeing themselves from the overhead burden and complex
decision-making processes of large conglomerates.
The north east of England has particular strengths in fi ne
chemicals and companies in the region have histories that re-
fl ect the scene we have set out above. The North East of England
Process Industry Cluster (NEPIC) has many small, medium and
large company members that are able to work at all levels of the
pharmaceutical supply chain. Companies with bases in this region
can deal with the development of new molecules, the scale-up of
processes, the delivery of clinical trial materials right through to
full-scale manufacture and indeed into formulation and packag-
ing. Here, four signifi cant NEPIC members talk to NGP about their
experiences supplying outsourced products to the pharmaceuti-
cal sector – Aesica Pharmaceuticals, Piramal Health Care, Shasun
pharmaceutical Solutions and Fine Organics Limited, whose busi-
nesses in this region are approaching 200 years of experience in
this activity.
NEPIC ED P72-74.indd 72 8/4/09 13:44:57
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NGP. Life within the large corporate organisations clearly did not suit
your business model. What was it that drove your organisation to its
current business position?
Aidan Walker. Although the move out of big pharma wasn’t one that
the majority of staff welcomed at the time of transition, the ability
to clearly make a real difference and, to a large extent, meaningfully
infl uence their own futures is a change that many are now very posi-
tive about. The growing variety of business has also allowed us to
capitalise on the wasted inherent capabilities that had previously lain
dormant within many of the staff.
Kevin Cook. Speed, fl exibility and service have always been the cor-
nerstones of our offering at Dudley. The acquisition by Shasun has
allowed us to become a more signifi cant part of a more focused or-
ganisation, enabling faster decision-making and greater responsive-
ness, with a common goal across the entire organisation of providing
the highest level of service to our pharma customers.
Keith Hanson. Our business model is driven by customer service,
fl exibility and rapid response, which ultimately adds value to our cus-
tomer supply chain and minimises risk by reducing time to market.
Being an independent company, we are able to make decisions quickly
and expedite solutions with minimal bureaucracy. Also, the ability to
freely explore a wider spectrum of market sectors increases our scope
of business opportunities signifi cantly.
Keith Payne. The need for more entrepreneurial and innovative think-
ing to adapt faster to market conditions and customer requirements.
Aidan Walker is Site Manager
at Piramal Healthcare, Pharma
Solutions. Prior to this he had a
number of leadership roles. On the
sale of the Morpeth site to Piramal,
Walker was appointed Site Leader and
has led the site through its transition
from a supply site to a standalone
business unit within Piramal.
Kevin Cook is Operations Director at
Shasun Pharma Solutions Ltd. He has
over 22 years’ experience in chemical
and pharmaceutical manufacturing
and has held a range of managerial
positions in the areas of HSE, supply
chain, operations and new product
introduction. Prior to joining Shasun
Pharma Solutions in 1992, he served
in various operational roles with
Boots Pharmaceuticals.
NGP. Manufacturing for the global pharmaceutical market as you do,
what are the priorities that are being demanded by your customers?
KP. Globally, pharmaceutical customers are looking for us to be reli-
able, resourceful, fl exible and competitive.
KH. Security of supply, high standards for safety, health, environment
and quality, technical innovation and optimum cost.
AW. On the whole the demands are the same as they have always been:
on time delivery, at the right quality, at competitive prices. There is
growing pressure on prices as would be expected and also a growing
requirement to be able to demonstrate a secure supply chain.
KC. With the continuing trend toward outsourcing and a growing de-
pendency on external manufacturing, assurance of supply remains
a key priority for our customers with technical expertise, on-time
delivery, right fi rst time production and comprehensive quality, and
HSE systems and controls being essential components of a successful
supply chain. Within an ever more competitive landscape, this is very
closely followed by cost.
NGP. Innovation has always been a key driver for outsourcing of prod-
ucts in the sector. How has this infl uenced your business strategy?
KC. At Shasun we recognise that innovation is a critical aspect of sup-
plier selection, complementing the benefi ts of continuous improvement
and operational excellence with the ability to deliver step changes in
quality and cost. Innovation is a key element of Shasun’s offering and
is delivered through two main platforms, manufacturing innovation,
Keith Hanson is Managing Director
at Fine Organics Limited. He spent
28 years with Laporte and Evonik
Degussa, latterly as General Manager
of Seal Sands. Hanson has managed
most of the functions on site and in
the process has acquired a practical
understanding of the internal and
external dynamics of the business.
Keith Payne is Sales and Marketing
Director at Aesica Pharmaceuticals
Ltd. He joined Aesica in 2007
and became Sales and Marketing
Director in July 2008. Prior to joining
Aesica, Payne was Senior Vice
President, Product Development
Services at NextPharma and was
previously Commercial Director
for Clariant Life Science Molecules
(formerly Archimica Fine Chemicals).
NEPIC ED P72-74.indd 73 8/4/09 13:45:11
74 www.ngpharma.eu.com
with the application of new manufacturing techniques to deliver cost-
effective solutions to our customers; and combining dedicated R&D
resources with regional collaborations and a world-renowned scientifi c
advisory board to drive the application of innovative technologies, such
as Shasun’s proprietary Fluorination, ABF and HKR technologies, and
bring novel synthesis solutions to our customers.
KP. Our business strategy is driven by the goal of providing innova-
tive services, approaches and special capabilities for synthesis and
formulation of pharmaceuticals, which is responsive to our customers
needs for outsourcing.
KH. We are a toll manufacturer of pharmaceutical intermediates and
hence on many occasions the processes supplied are relatively fi xed
by registrations to the regulatory authorities. Innovation has to be
looked at in the fullness of the supply chain, starting with the most
effi cient use of assets.
AW. Innovation for us has primarily been fo-
cused around developing our one stop shop
offering. With this in mind we have invested
heavily in capabilities that extend the scope
of our offering beyond traditional manufac-
turing. These include both development
capabilities in API and formulations, as well
as a brand new clinical trials services unit.
NGP. As productivity is key to effective cost control and pricing, how
has your involvement in your region’s improvements, through NEPIC
and One North East, benefi ted your business?
KH. Our CI programme has been driven by the site management,
supported by local expertise as and when needed. We have had tre-
mendous support from One North East over the last four years. Our CI
training programme was support by NEPA and NAC and latterly we are
working with NEPIC to improve our business support mechanisms.
AW. We have received signifi cant benefi t from involvement in a number
of these programs. Right now we are coming toward the end of our
narrow and deep intervention, after which the whole workforce will
have attained the skills necessary to ensure we can drive productivity
improvements from shop fl oor level upwards on a sustainable basis.
KP. Aesica has certainly benefi ted from our staff participating in
NEPIC and One North East seminars, which raise awareness on in-
dustry best practices, operational effi ciency and other measures
that improve productivity.
KC. Through NEPIC, Shasun has participated in a number of manu-
facturing and energy effi ciency programs, sharing best practices
and benchmarking across the cluster to deliver tangible benefi ts to
our business.
There is an ever-increasing pressure on the price of
drugs arising from governments across the world. There
is also a growing moral obligation to supply cheaper
medicines to less economically developed countries.
Furthermore, pharmaceutical companies have the
strategic need to focus their management expertise
on researching and developing the next generation of
pharmaceuticals. All of this has given added intensity
to the manufacture of cost-effective pharmaceutical
ingredients. Companies like Aesica, Fine Organics,
Piramal and Shasun, by providing a range of outsourcing
opportunities, and a service that is effi cient, of high
quality and fl exible, have become key partners in the
pharmaceutical supply chain.
Within one hour drive time in the North East of
England, there are companies working across the whole
pharmaceutical supply chain. They represent over 33
percent of the UK’s pharmaceutical GDP. This sector is
provided with a wide range of support services via the
regional development agency One North East, including
world class activities such as the Centre for Process
Innovation and NEPIC.For more information, please visit www.nepic.co.uk
“In the North East of England, there are companies working across the whole pharmaceutical supply chain”
NEPIC ED P72-74.indd 74 8/4/09 13:45:15
77www.ngpharma.eu.com
Steve Dreamer always knew that achieving his desire to
change the way in which European pharmaceutical manage-
ment operated would be painful, but as he discovered, with
much pain comes much gain.
“We started off in the US in implementing some of our operational
excellence programs and we proved that they worked there, so then we
brought them over to Europe,” says Dreamer, Global Head of Pharma
Engineering for Novartis. “There was some scepticism up front as to
whether this would this really work or if this just an American way of
doing things; Europeans often like to have 100 percent of the answers
before making a decision.
“We were able to move very rapidly in the US on some of our im-
plementations and they recognised that and admired it, saying, “Well
how do we get our people to think differently? What can we do so that
they can adopt some of this 80/20 type thinking so that we can move
forward as well?”
CollaborationOne of the key ways in which Novartis developed their process
teams to bring about a change in managerial direction was to put the
quality control laboratories within the process team. The traditional
thinking would be for the quality control laboratories to stand alone,
as a separate group. Dreamer argues that by combining the two, there
is an increase in open communication and an improvement in quality.
“What the agencies are really looking for is to be able to solve
these problems collaboratively, not the previous confrontational type
arrangement. As we try to collaborate with the agencies, this builds
a level of trust and comfort, so by doing that and showing that these
changes are accepted by the agencies, that helped open up commu-
nication,” he says.
“When there’s a new technology on the market, people often buy
it, thinking it to be ‘cool technology’: it runs faster and makes things
prettier. They implement it and then they forget about the other el-
ements. So it may be a fast piece of equipment but if the materials
don’t allow you to run fast you don’t get any gains. If the process is
upstream and downstream of that new piece of technology, and if
they aren’t in line, you don’t gain anything, and if the people aren’t on
board you certainly don’t gain anything either.
“So we always look at those for elements to make sure that things
are in sync. When we look at an improvement we try not to look at
just a silo or unit operation, we try to look at what’s the impact of
the business. If we want to change the business we look the process
of material and the operations that are going to impact the business.
Then we look at the roles of the people, and then fi nally the people
that are in those roles. We always follow that formula and it seems to
work,” says Dreamer.
Originally, the changes that came in the traditional way did so via
a person joining, changing the organisation, bringing in new people,
and then letting them pick the process. However, this system was
simply not effi cient enough for Novartis, who have instead decided to
fl ip the process around.
Management change“We do this on a local scale, as well as on a global scale. There’s
a change management program that goes with it, which makes every-
one aware of how uncomfortable the change is going to be, so we take
people through this training and we support them.
“The most important thing of all of this is the leaders. We’re trying
to develop them as coaches, not as managers. We don’t want people
that are going to go out and tell their operators and workers what to
do. These people know better than anyone how to make medicines,
so what we want to do is coach them, and that helps them through the
transition,” he explains.
Novartis’ structure can be described as the creation of a much
fl atter level of management organisation. The company fi rst deter-
mines the various places in which people with specifi c qualifi cations
are needed, and then puts the right people in those places. Dreamer
explains that if this is done in the right way, then management are
able to take a step back, and the operations should be able to suc-
cessfully run independently.
How Steve Dreamer is whipping Novartis’ manufacturing process into the best shape of its life.
Dreamer.indd 77 8/4/09 13:57:22
79www.ngpharma.eu.com
“If you don’t address the process fi rst,” says Dreamer, “If you just
go in and try to do cultural training, you don’t gain anything. I’ve had
a lot of people say, ‘We don’t want to change our processes. We just
want to change the culture.’
“I’m not convinced that simply changing the culture will work be-
cause, although you may change people to think differently, they don’t
act differently. By changing the process they have to act differently
and that forces them into a new way of thinking. Then you get a culture
change. If you do that in the right way, they can’t drift back to the way it
used to be. You’ve eliminated all the different levels of management.
“In some of our sites we had eight levels of management. Today
on all of our sites we’re at three levels. There are one or two still at
four and they’re moving to three levels. When you get to that point
you’re never going to come back in and add layers, so you only hire the
people that can work within this new framework and we’ve done that
for 18 sites now quite successfully,” he says.
Target 2010Successful is certainly an accurate word with which to describe
Novartis’ management change, with a full implementation of a Lean
structure almost in place. Dreamer attributes this to the managerial
adoption of a “top-down vision”. “You can’t just sell – people go out
and do Lean or people go out and do improvements. They’ll walk dif-
ferent directions so you have to bring it together; they want some-
thing to work towards so we try to put this vision in place. We call it
‘Target 2010, The Toyota of Pharma’, which is a fi ve-year plan. We put
it in place in 2005 and it’s running through 2010, and we never waver
from the program.
“Often in large companies each year they come out with a new
fl avour, but we’re trying not to do that. We have a vision as to what
we want the supply chain to look like and we work toward that bottom
up. We enable the people, we give them the tools, we describe what
processes we want and we let them work. They start at the low level
site-by-site and we start connecting it together, adjusting the people
as we go.
“Some of these new supply chain techniques are not learnt in
university. Nobody else in the industry has done it, so you have to
create the people and that takes time. You have to bring them along,
educate them, and sometimes you have to change people as well, but
eventually we work toward that vision. We have measurements along
the way that we look at: throughput time, customer service levels,
productivity and overall asset effectiveness. You monitor those and
you advance in one area, and then you work in the other area. All of
those things have to line up well in order to really achieve that vision,”
he explains.
However, the implementation of Target 2010 does not neces-
sarily mean a rigidity of the system. With learning, change be-
comes necessary. “One of the things that we always tell our people
is identify 80 percent of it and go. Twenty percent of it you’re going
to have to figure out along the way. If we tried to get all 100 per-
cent we’d never get anywhere. Somebody asked the other day,
“Part of the reason we’re successful is that we’re consistent, we do the same thing every time and it’s very predictable”
Steven Dreamer speaking at the NGP summit
As Head of Novartis’ Global Pharma Engineering
& Innovation Quality Productivity, Steve Dreamer
is responsible for providing technical and project
management for the major capital investments, and for
building operational excellence capability for the TechOps
organisation to achieve Target 2010, The Toyota of Pharma
Vision by embedding Lean, process oriented organisation
and other re-engineering processes.
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‘Okay, 2010 is next year. What’s the next vision?’ We don’t know.
We’re comfortable in saying, ‘I don’t know’ because when we get
there we’ll f igure out the next step. If we start thinking about it
now there’s still opportunity over the next year to realise certain
improvements and we may forego something if we try to do it too
soon,” he explains.
By the end of 2009, the vision for Novartis’ next plan is due to be
implemented. Rather than a master plan, like the one implemented in
2005, this time around they are opting for a step-by-step proposal,
allowing them to continue learning on the way. The established
values of Novartis’ traditional structure are steadily being replaced to
encompass a learning organisation, and change the culture in which
managers think, encouraging them to be positive about the changes
and inspirational as to what the next steps should be.
Continuous manufacturingAnother policy that Dreamer is championing is continuous manu-
facturing. He explains that one of the advantages of the crea-
tion of a Lean structure is to reduce overall throughput time
end-to-end, from the first chemical step all the way through
distribution.
“In some cases, for major products, we’ve been able
to go from 550 days down to 200 days. If you continuously
manufacture, you conceivably go from 200 days down to 35
days or less, and it’s not just changing existing batch proc-
esses and connecting them together in a continuous way, but
it’s changing the chemistry.
“One of the advantages is that there should be signifi-
cantly less capital investment. We combine all of the steps
of the drug product together into one manufacturing step
and, because you put stuff in one end of the pipe and you get
tablets out the other, you can control quality better. You don’t
have all of these intermediate tests that you have to deal
with. No other company has done this. It’s a 15-year journey
for us: we’re in pilot now this year and we’re starting to see
some progress with it that makes us believe it’s going to be
real,” he explains.
The move to Lean and the push for continuous manufac-
turing are coalescing that vision, which is displaying the in-
novation part of the process. Dreamer notes a Lean program
already in place, Innovation Quality Productivity (IQP), which
focuses on the quality removing variability from our proc-
esses. He explains this to be the typical Six Sigma, whereas
the innovation part of pharma to be a little more difficult.
Innovation“We’re innovative in the products that we develop, but
we don’t want to have operators running around the plant
being innovative and trying new things. Part of the reason we’re suc-
cessful is that we’re consistent, we do the same thing every time and
it’s very predictable. There’s no room for innovation in the way you
make the products. However, if you can redesign the whole process,
innovation can make a difference there and we believe this might be a
strategic advantage for us in the future.
“Innovation in the pharmaceutical industry is producing products
that solve disease issues in a different way: it’s the overall health of
it. Is it important to have innovation in the way you make the product?
We’re not in the business because we make the product. We’re in the
business of healing, of solving unmet medical needs. That’s the in-
novation part and that’s where the industry really should focus: on
making the product.
“We should be able to make it with the highest quality, with the
fastest time, and with the lowest cost, and if innovation can help drive
that then we will look at it, but innovation in making product brings
probably not a lot of benefit to the customer in the end. Ultimately,
they’re going to get a tablet and they won’t know if innovation took
place in there, not like an iPod or other devices that a consumer would
see. So for us, innovation is improving quality, reducing cost, or being
more responsive to market demand, but the real innovation for phar-
maceutical is in the patient healthcare,” Dreamer concludes. n
“We have a vision as to what we want the supply chain to look like and we work towards that bottom up”
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NGP. The pharmaceutical industry is subject to increasingly stringent reg-
ulations regarding its supply chain. What challenges does this present to
companies?
Jean Bédard. Companies involved throughout the pharmaceutical supply
chain must comply with the new stringent regulations on the storage and
transportation of pharmaceutical or medicinal products.
One challenge is to gather all the necessary data and information to have
a clear understanding and knowledge of the storage and transport conditions
that prevail throughout the supply chain. This can be a long and complex
process as it involves uncontrolled environments (transports, seasons) and
many potential stakeholders, such as wholesalers, transporters, pharmacies,
etc. While pharmaceutical warehousing and storage zones are controlled en-
vironments and are easier to validate, uncontrolled environments such as
those observed during the transportation and distribution of drug products
(ground, sea and air) certainly represent a challenge to companies.
Another challenge is to reach a pharmaceutical supply chain that is both
fully compliant and economically sound. An optimal pharmaceutical cold chain
should ultimately provide compliance but limit the additional distribution costs.
Richard Harrop. I am often tasked with evaluating the impact of new regula-
tions and industry guidelines on a company. When doing this it is vital to un-
derstand the key focus areas; performance and price. Do new regulations
demand greater performance and will this greater performance increase cost?
NGP. What methods can companies use to comply with these regulations?
RH. Partnership is key. The pharmaceutical manufacturer, logistics provider,
ancillary packaging designer and data-logging supplier should be dis-
cussing the project together from day one. Building this team ensures clar-
ity is present throughout the development process and all aspects of the
supply chain can be considered.
JB. There exist various methods to be used in order to reach cold chain com-
pliance. Our approach is to start first with an exhaustive cold chain regulato-
ry gap analysis where the pertinence of the cold chain regulations, as well as
the extent of cold chain management actions to be applied, are verified and
established in regard to the audited company and supply chain.
This preliminary step enables us to develop a cold chain compliance
plan that can be orderly and progressively implemented to the company
and its supply chain.
The compliance with cold chain regulations will require acting on var-
ious cold chain quality aspects, from optimising stability and temperature
excursions test studies, updating the cold chain quality system (person-
nel training, procedures, quality agreement), validating all cold chain
processes and equipment (mapping of warehouses and storage areas, tem-
perature profiles study during transport, I/O qualification of temperature-
controlled storage systems), up to installing cold chain monitoring where
needed (temperature-controlled storage and transportation areas, ship-
ments and products).
NGP. What tools are available to enable companies to maintain the integrity
of their products during the manufacturing and supply chain process?
JB. Cold chain monitoring and packaging systems are the major tools to
maintain the integrity of products during the manufacturing and supply
chain process.
We now have efficient and user-friendly
monitoring systems to automatically and con-
tinuously monitor the environmental condi-
tions during the handling, storage and
transportation of pharmaceutical products.
Companies have access to new technologies
such as monitoring solutions, wired/wireless
sensor networks, data loggers and thermo-
couples to effectively monitor manufacturing
facilities, warehouses and storage areas, stor-
age equipment, transport, shipments and
products in transit. Furthermore, special at-
tention should be put on new RFID sensing
technologies that enable us to track and trace
cold chain products and shipments.
Meeting the challenges of supply chain regulationsNGP speaks to a panel of experts about the changes affecting thepharmaceutical cold chain.
ROUNDTABLE
Richard Harrop is the Commercial and Technical
Manager of SCA Cool Logistics and has been involved in
the temperature control packaging industry for six years,
initially in packaging design and then moving into the
commercial field.
Qualified in structural packaging design, Harrop
previously worked as a technical designer for the FMCG
sector before moving into the world of temperature
control packaging where he has worked predominately
within packaging technology.
He has developed and implemented several
successful temperature control solutions for many of the
world’s leading pharmaceutical corporations.
“The interest in creating more robustand effective cold chain solutions hasgrown dramatically” Richard Harrop
COLD CHAIN RT:13sept 08/04/2009 13:37 Page 83
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As for monitoring, shipping and packaging technologies are evolving
to offer better thermal protection and performance and to conform to lo-
gistic needs. New conditioning and insulating materials (VIP, polyurethane,
phase change materials) are introduced while reusable temperature-con-
trolled containers are proposed for international shipments. Another im-
portant tool to be developed resides in temperature-controlled
transportation modes (e.g., temperature-controlled ground trailers).
RH. Over recent years the interest in creating more robust and effective cold
chain solutions has grown dramatically. Even without the pressure of regula-
tions, companies seem to have even greater desire to ensure product integri-
ty. However, we still come back to the debate of performance versus cost.
At SCA Cool Logistics we have dedicated resources to exploring the
possibilities of new cold chain solutions and by working closely with all our
industry partners we have been able to develop solutions that meet both
performance and cost requirements.
Today our pharmaceutical partners can select solutions that come ready-
qualified against real-world temperature data, offer controlled cooling and
heating without batteries or preconditioning, hold loads from one litre up to
800 litres and beyond and last for a single shipment or can be reused. They
can also be returned to us for cleaning and can reach durations exceeding 120
hours, regardless of ambient conditions, and are thermostatically controlled.
NGP. How do you see the pharmaceutical supply chain developing in the
future?
RH. Green solutions that fulfil a company’s corporate social responsibility
whilst addressing the need for maximising cost-effectiveness – these are the
systems of tomorrow. Environmental accountability is already bringing con-
siderations regarding recyclability, carbon emissions and energy cost. Cold
chain is one part that can be re-evaluated from a green standpoint.
Green solutions already exist, but what must be considered is how they
are implemented. The green credentials of a solution must be measured
alongside how that solution is used. Will components need to be condi-
tioned within refrigerators or freezers? Are suitable facilities available to
break down the biodegradable container? How many miles does the
reusable system need to travel before it returns to its point of origin?
If we look at two different products, ZeoCool and GREENBOX, we can
see that both have the possibility to solve to green issues, but in very dif-
ferent ways.
The ZeoCool system uses the process of evaporative cooling which re-
moves the requirement to pre-condition components; this is an environ-
mental benefit considering that Europe’s refrigerators and freezers account
for 62 million tonnes of carbon dioxide emissions every year.
ZeoCool offers reduced total system payload, which in turn reduces
the transport or fuel consideration; simpler packing process, which means
reductions in occupied packing space and man-hours; and no requirement
for costly and energy-hungry refrigerated transport.
GREENBOX is a completely sustainable thermal packaging system, cre-
ated with 100 percent recyclable, organic-based, non-toxic and some fully
biodegradable components. The resilient nature of GREENBOX means cus-
tomers can use one box up to 50 times. Reclamation centres gather used
GREENBOXes and inspect, clean and re-certify them for re-use.
GREENBOX’s innovative materials are 100 percent recyclable. When
the hard plastic outer and Thermal-Lok insulating panels reach the end of
their lives they are ground down and made into new shells and panels. In
addition, GREENBOX features biodegradable, non-petroleum, non-toxic
phase change materials. Customers can save up to 65 percent on distribu-
tion-related expenses due to GREENBOX’s unique, reusable design.
Because GREENBOX maintains temperature for up to five days; customers
can ship road freight – even on Fridays – resulting in up to 65 percent re-
duction in shipping and distribution costs.
JB. As for the drug development side with GLPs, the manufacturing side with
its GMPs, and the clinical trial side with the GCPs, the pharmaceutical supply
chain side is going to be significantly impacted with good storage and distri-
bution practices to ensure the highest levels of security and
safety for the drug products going throughout the supply
chain, from the manufacturing facilities handoff up to the
final end-users (patients).
Cold chain compliance and anti-counterfeiting are cer-
tainly the two major pillars in making the supply chain
more secure and safe. As a consequence, a great regula-
tory emphasis will be put on these two aspects, thus lead-
ing to more generalised good storage and distribution
practices in the pharmaceutical supply chain.
In the near future, we will probably see a more spe-
cialised pharmaceutical supply chain, meaning a supply
chain where stakeholders such as wholesalers or trans-
porters will be more focused on providing services and
quality that fulfil the new pharmaceutical supply chain re-
quirements. n
Jean Bédard is Chief Executive Officer
of Alternatives Technologie Pharma Inc.
He has led the company and its
impressive team of cold chain and
track and trace management experts
since 2003, and has managed more
than 100 cold chain compliance
programs in the life sciences and
healthcare sectors. He holds an MBA in
Bio-industry Management.
“An optimal pharmaceutical cold chainshould ultimately provide compliancebut limit the additional distributioncosts” Jean Bédard
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be pursuing. One of the participants said at the end, ‘This is amazing
because it’s such common sense. It’s not sexy and it’s not crazy, but
it’s so pragmatic that we believe in it.’”
Before he joined GSK 17 years ago, Slaoui’s previous career was
in academia, and he is acutely aware of the differences between the
two. “In academia, partial success is still success,” he says. “You
can publish a paper in one of the great journals – Nature, let’s say,
or Science – and even if your paper is 95 percent right and five per-
cent wrong, it will still be considered a success. In pharmaceuticals,
either you’re 100 percent right and you have a medicine, or you’re one
percent wrong, and there’s no medicine. This makes a dramatic differ-
ence, because if your medicine has a safety problem, you cannot give
it to a patient, even if in 99 percent of its features, it’s fine. That raises
the bar so much higher.”
In industry, no matter how bright you are, a host of other factors
need to fall into place before science leads to a treatment that can be
given to patients. Slaoui points out that this makes you more prag-
matic, and more wary of trends. In academia, by contrast, research-
ers will often publish numerous papers in each new publication that
comes along, even if none of them is particularly transformative.
Another thing Slaoui learned from his time in the ivory tower was
to seek out people with what he calls ‘educated intuition’. “Science
and innovation are a mix, a kind of art that combines deep expertise
and intuition. You can’t put your finger on it – some people have it and
some people don’t. Some people are more often right than wrong, and
others – unfortunately most – are most often wrong and rarely right.”
Meeting the challengesOne of the biggest hurdles Slaoui has had to overcome since
taking on the Chairman’s role in 2006, he says, stemmed somewhat
counter-intuitively from the fact that the performance of GSK’s R&D
was already pretty good. He explains that applying a vision to strongly
As part of a company-wide restructuring that began in
October 2007, GlaxoSmithKline announced last autumn
that it would shed 850 research jobs in Britain and the
US, and earlier this year the company warned that it
might be forced to make further cuts in an effort to cut
costs by €2 billion over two years.
When asked about the job cuts, Moncef Slaoui, GSK’s Chairman
of R&D, says, “It is difficult to tell people who have been working
for you for a long time and doing their best to discover medicines
that now they are going to lose their jobs, because we can’t continue
doing things the same way we used to do them. That in order to stay
at the top, we have to redesign our organisation. It’s a very difficult
message. It definitely impacts the morale of the organisation and
the motivation of those losing their jobs, and also their colleagues
who have to see that happen. It’s one of the big challenges of chang-
ing an organisation.
“Scientists are faithful to their projects and to their science. They
do their best for their projects. It’s not because they fail individually
that they lose their jobs. Globally there may be an element of fail-
ure, or at least of limited success, because we haven’t had enough
blockbusters coming through, but on an individual basis and a small
team basis, it’s very hard. I’m confident that this strategy and these
changes will make us even more successful, but there is still a period
of adjustment – of grieving, if you will.
“We know that we’re making changes that will make us stronger
in four or five years. If we don’t make them now, we’re not going to be
standing when it’s havoc in the industry. But it’s hard to relate that to
an individual who may be losing his or her job today.”
Slaoui’s task must surely be made easier by his own participative
management style. He summarises his style with this anecdote: “A
few months after I became Chairman of R&D, I had a meeting with the
60 most senior R&D leaders to discuss my vision and the strategy we’d
changesMoncef Slaoui has been working hard to restructure GlaxoSmithKline’s R&D organisation in order to ensure the company’s future. But will he succeed in keeping his team on top in these challenging times? Marie Shields investigates.
Ringing the
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helm of everything you do and never settle for less. Second, empower
the talent and the people who have the expertise and the depth to do the
work that needs to be done, versus telling them what they need to do.
“It is those who have the depth of expertise in the particular area
of research they’re working on who are best equipped to make the right
decisions,” he says. “This is versus having a few leaders in an office
somewhere telling them what they should do, which is usually wrong.
“But at the same time, we should hold them accountable, because
that’s one of the things we didn’t do well before. Set expectations very
clearly, generate a culture and environment where people feel safe to
make guesses, to have judgments, to make choices and take risks.
We need to remember that this is not an academic centre, and we do
expect them more often than not to succeed.”
Slaoui hopes to achieve this by
creating much smaller units to drive the
engine of R&D. These new units – small
groups of between 30 and 60 individu-
als – will be called discovery perform-
ance units (DPUs). Three-year to
five-year business plans will be judged
by an investment board made up of
venture capitalists, bankers and other
experts, as well as scientists.
The units will have clear delivera-
bles, and the deep scientific expertise
they need to discover medicines, and,
as Slaoui puts it, they will either deliver
or they won’t. “When you’re in such a
situation, you perform better; you have
an opportunity to exert your passion
better. You need to empower people and
give them the time and the resources to
do what they need to do.
“We’re doing several things at
once. First, we looked into the basic
science and asked, ‘Where is fertile
ground for discovery to happen?’ We
didn’t look at the market. We didn’t say,
‘Where are we selling a lot of drugs?’
We said, ‘Where is the raw material for
great discovery to happen?’ And we
identified eight areas. Then we said
to our teams, ‘If those are the areas in which there is fertile ground
to discover, why don’t you use your creativity? Come to us with your
plan, come with a budget request, and then you have a three-year
period to exert your creativity.’”
Slaoui says this new structure has transformed the way the dis-
covery groups are working, because they moved from a culture where
people had a sense of entitlement and never had to answer questions,
with everybody hoping they would deliver something, to a culture
where they have to earn what they have.
“The same principle is being driven across the organisation. We
have much smaller project teams, and individuals work on a single
enhance performance is harder to do with an organisation that is rea-
sonably successful – it’s easier to drive change when you’re obviously
on the verge of disaster.
“From a management and a leadership standpoint, that’s certainly
where most of the challenge stems from, because you have to deliver
a contradictory message between acknowledging and praising the
current successes, and then pushing hard for change.
“Another related challenge is to introduce a different culture into
the organisation and make changes while continuing to deliver. It’s a
bit like fixing the engine of a jumbo jet at 40,000 feet and making sure
it doesn’t crash. That’s fascinating and very interesting.” (And most
people would add, also more than a little dangerous!)
Of course, Slaoui’s job is not just about challenges; there are op-
portunities as well. He is full of praise
for the talent that exists within his
organisation. “It’s extraordinary to see
the amount of talent we have. There are
15,000 people in R&D, and there is such
diversity and richness. One of my main
focus areas is to make sure this talent
is identified and recognised.”
Surviving and thrivingNo one can deny that the pharma-
ceutical industry is facing a time of sig-
nificant change, with patents expiring
and new blockbusters harder to come
by. According to Slaoui, the move to ge-
nerics stems partly from the fact that
payors have realised they can be much
more powerful; that they can use ge-
neric medicine and that they can make
it harder for a new medicine to be paid
for and to justify its value. Regulators
have also substantially raised the bar
in terms of the safety they expect from
novel medicines.
“There will come a time when a
significant number of players in the
industry will disappear and only a few
will remain around the table,” Slaoui
says. “Those who remain will be those
with a strong R&D pipeline and a strong R&D organisation. GSK will
be one of those, because our business model is based on innovation
and the discovery of novel medicines. That’s the name of the game for
those who will survive.
“For this reason, we have no choice but to organise our R&D or-
ganisation for maximum success. And that’s what we’re doing. It’s why
I’m pushing for quite significant and profound changes, despite the
fact that our organisation is already pretty successful. Because pretty
good is not good enough; outstanding is what it’s going to take.”
The changes Slaoui is pushing for go straight to the heart of what
makes an R&D operation a success: first, put the best science at the
Moncef Slaoui is Chairman of Research and
Development at glaxoSmithKline. he is a
member of the Corporate executive team and
the Board of glaxoSmithKline plc. in his previous
position as Senior Vice President, Worldwide
Business Development and external Alliances, he
spearheaded changes in R&D to enhance drug
discovery and accelerate product development.
Previously, in gSK Biologicals, he engineered the
development of a robust vaccines pipeline.
SLAOUI ED P86-89.indd 88 8/4/09 13:50:03
89www.ngpharma.eu.com
it. We’ve done that twice in the last year. We acquired a company
called Domantis that has a technology that will transform the way we
make antibodies.
We also acquired a company called Sirtris, which works on sir-
tuins, enzymes involved in longevity, diabetes and infl ammation. If
we can crack that nut – and I think the Sirtris people are the best
placed to do it – and make medicines out of sirtuins, they will truly
be transformative.”
Going globalFor historical reasons, most pharma companies have based
their R&D exclusively in the West, between the US and Europe, but
as Slaoui rightly points out, two-thirds of the earth’s population lies
outside of those regions.
With growth in healthcare costs in developed countries already
showing signs of slowing, many pharma companies have developed
a sudden interest in moving into new parts of the world, in terms of
both sales and research. Pfi zer, for example, recently announced that
it will set up a unit focusing on emerging markets, and sanofi -aventis
is pushing into eastern Europe with its purchase of Czech generic-
drug maker Zentiva.
A cynic might say that this move is prompted less by a heartfelt
desire on behalf of these companies to improve health conditions
across the world, and more by the lure of untapped potential profi ts, or
as a way of conducting clinical trials on the cheap. But Slaoui remains
convinced that establishing research bases in these areas can only
have a positive impact on the advancement of scientifi c research.
“Places like China or India or South Korea or even Latin America
have great scientists and great ideas that are often neglected. We
have a strategy to fi nd the talent wherever it is. We opened a big
center in China, not with the intent of sourcing low-cost research, but
to access the best scientists and the best discoverers. Our motto is:
‘We’re going to move from Made in China to Discovered in China.’”
It’s clear that Slaoui is determined to keep GSK’s R&D at the top
of its game, whatever the challenges. And after spending even a rela-
tively short time in his company, you get the feeling that he will most
likely succeed.
project or two and not on 10. In this way, we are re-personalising R&D.
What happened in the last two decades is that we, as an industry,
thought we could industrialise R&D in the same way we industrialised
manufacturing: ask people to be excellent in a very small task and do
it on many different projects.
“But R&D doesn’t work that way. R&D is about insight, it’s about
expertise, it’s about judgment; and that comes from depth of under-
standing and from spending time, a lot of time, in a given area – it’s
about depth and not breadth. Breadth is important in a few places, but
it’s not important that everybody has breadth; it’s very important that
most people have depth in the area they are working on.”
Partnering upSlaoui again stresses the need to open up GSK’s R&D to the out-
side world, because good ideas don’t occur in a vacuum. To this end,
the company is ramping up its partnering efforts.
“Like others, we partner; but in contrast to others, when we part-
ner we don’t tell our partners how they should do things, because
what we value is diversity,” Slaoui explains. “We listen to how they do
it and let them do it. We trust them.”
GSK recently announced two major partnerships with Harvard insti-
tutes, which Slaoui says are aimed at the onset of very basic science, an
almost symbiotic relationship with discoverers and innovators at that
level. This allows the company to do two things: keep its internal sci-
ence cutting edge; and have its own scientists spend time in academia,
and in exchange have university scientists spend time in industry.
“This works well, because they are usually fascinated and come
to understand how valuable and rewarding the work we do in industry
is. And many of them will, I hope, join us as great talent.
“We also have many partnerships with biotech companies here
in Europe, in the US, and farther afi eld in countries like India. We now
have 60 programmes in our pipeline that are completely run by biotech
companies. Recently we signed a deal with a company in Switzerland
for a revolutionary sleep medicine that’s in phase III; and also with
Valiant for a schizophrenia medicine.
“Sometimes when we think there is a transforming platform
technology or approach that will really change medicine, we acquire
WHO PRIORITY DISEASESMoncef Slaoui, Chairman of R&D at glaxoSmithKline, outlines the company’s work on the WhO priority diseases: hiV/AiDS, tuberculosis and malaria.
“We are absolutely committed to fi ghting the diseases of the developing world. i
spent my fi rst 15 years in the pharmaceutical industry in vaccines; i was personally
strongly involved with our malaria vaccine, for instance, and the hiV vaccine.
We have a dedicated pharmaceutical R&D center in tres Cantos, just outside of
Madrid, that’s focused on discovering medicines for malaria and tuberculosis. And
we have substantial public-private partnerships with the gates Foundation, with the
Malaria Vaccine initiative, with Medicines for Malaria, and others.
On the vaccine side, we have signifi cant malaria vaccine programs that are
currently in phase iii trials in Africa; and also programs for tuberculosis and hiV. We
have a strong rotavirus program, having just launched our Rotarix vaccine. A rotavirus
is a virus that causes diarrhea in babies, and between 600,000 and 800,000 babies
die every year in the developing world from rotavirus-induced diarrhoea.”
Aids virus attacking healthy cells.
SLAOUI ED P86-89.indd 89 8/4/09 13:50:06
cause there is simply not enough acetonitrile available to efficiently run
their labs using traditional liquid chromatography technology. As these or-
ganisations evaluate their options, the innovations behind UPLC technolo-
gy provide the best solution to today’s crisis and safeguarding against
future risk.”
Working with its key customers, Waters estimates that replacing tra-
ditional high performance LC (HPLC) with ACQUITY UltraPerformance LC
(UPLC) reduces acetonitrile consumption by up to 95 percent without com-
promising productivity and performance.
The ACQUITY UPLC System allows scientists to perform required analy-
ses, such as quality assurance and quality control tests, using fewer re-
sources than HPLC. Because the system operates with a lower flow rate and
separates samples in less time, UPLC uses significantly less solvent, in-
cluding acetonitrile. The result is the ability to maintain or improve lab pro-
ductivity and performance, with reduced costs and reduced external
pressures associated with the current acetonitrile shortage.
With the acetonitrile shortage expected to last the better part of 2009,
current UPLC users are experiencing a competitive advantage. UPLC pro-
vides a short-term solution to the crisis while also offering long-term secu-
rity, a means to demonstrate environmental responsibility, and increased
productivity many times over. n
In general, a scientist in a pharmaceu-
tical laboratory would not expect a
major sporting event, a hurricane, and
the struggling automobile industry to
impact his work. Yet these seemingly
unrelated events are providing a significant
challenge to scientists who rely on liquid
chromatography.
Why is this so important to the pharma-
ceutical business? Every pharmaceutical lab-
oratory has them – liquid chromatography
systems are an indispensable tool in con-
ducting effective R&D and product release
testing. Typically, the solvents that are used
with these systems come with a considerable
operational cost – thousands of litres that
add up to hundreds of thousands of euros
per year. One of the most used solvents in the
laboratory is known as acetonitrile.
Ahead of the games in Beijing, one of
the world’s largest acetonitrile manufactur-
ing plants was shut down to reduce area air
pollution. To date, that plant has not been
restarted. Hurricane Ike forced the closure of a second large plant in Texas.
And finally, access to acetonitrile as a production byproduct of a polymer
used in automobiles is tight, as consumer demand for cars lags.
The impact on analytical laboratories is being felt across all indus-
tries that depend on liquid chromatography. Suppliers have notified
clients they will be unable to fill all acetonitrile orders. Laboratories at
leading companies are searching for solutions to maintain their mission-
critical laboratory productivity. This situation is prompting companies to
quickly evaluate their current liquid chromatography systems and their
associated acetonitrile usage requirements to ensure uninterrupted lab-
oratory operations.
“The time for ACQUITY UPLC System adoption has never been clear-
er,” says Rohit Khanna, Vice President of Global Marketing for the Waters
Division of Waters Corporation. “Laboratory-dependent businesses and
government agencies around the world are facing difficult decisions be-
90 www.ngpharma.eu.com
Storm warning
ASK THE EXPERT
For more information, visit www.waters.com/green.
“The impact on analyticallaboratories is being felt across
all industries”
How the Beijing Olympics, Hurricane Ike and the slowed auto industry are causingheadaches for pharmaceutical scientists.
WATERS ATE:co proof 08/04/2009 14:43 Page 90
Much of the work that Kotzin and his team carry out in medical sciences
is related to biomarkers. “Our group is composed of combined groups from
research and clinical development,” he points out. “For example, we have
a molecular sciences group that’s devoted to molecular biomarkers, we
have an imaging sciences group that’s devoted to advanced imaging bio-
markers, we have a clinical immunology group that includes a group fo-
cused on cellular biomarkers, and we have the development group. It’s a
very biomarker-oriented function here in medical sciences.”
The goal of Kotzin’s studies is to maximise the information he gets from
early clinical trials. Because the therapeutics are being introduced into a
small number of people, it’s important to get as much information as pos-
sible, which is accomplished by dividing biomarkers up into different cate-
gories. “One of our biomarker-directed questions is, when we introduce a
therapeutic into people, did we hit the target? Did we do what we really
Brian Kotzin is the first to admit that his background is a lit-
tle unusual compared to that of his senior colleagues at
Amgen. “I was at the University of Colorado, at The National
Jewish Centre for Immunology, now called the National
Jewish Medical and Research Centre,” he explains. “I was a
physician scientist and did the usual things they do in aca-
demic medicine. I’m a clinician, a rheumatologist, so I saw patients within
the internal medicine and rheumatology setting. I also ran a laboratory, and
I did a lot of teaching.”
Kotzin’s appointments were in medicine, immunology and genetics.
Over 25 years, he headed clinical immunology and rheumatology groups,
as well as a centre of excellence devoted to autoimmune diseases. As this
research developed, he realised the next step would be to develop it into a
therapeutic, which can be hard to do in an academic setting.
92 www.ngpharma.eu.com
BIOMARKERS
Brian Kotzin, Vice President of Medical Sciences at Amgen, tells Marie Shieldshow biomarkers help translate basic science into medicine.
translational
Leapingahead in
medicine
Kotzin ED:13sept 8/4/09 14:43 Page 92
thought we did?” says Kotzin. “Thenwe ask, didwe cover the biochemical
pathway?Were the intracellular signaling pathways inhibited to the full ex-
tent that we thought they were?
“Then we have biomarkers that are a measure of clinical activity. We
can’t do large clinical studieswhereweuse a clinical endpoint, like survival
– we don’t do that in these early clinical trials. Instead, we try to incorpo-
rate biomarkers that will give us a clue as to whether we have a clinical ef-
fect. For example, if it’s a cancer therapeutic, did we shrink the tumor, or
were the tumor cells killed within the tumor?
“The last group of biomarkers that we try to get insight into are those
that might predict who’s going to respond to a therapeutic. We call them
stratification biomarkers or predictive biomarkers.”
One other important category of biomarker is related to safety. Most
therapeutics at this early stage do not work out: they fail for one reason or
another, and the importance of being able to make a strong conclusion re-
garding that failedmolecule is critical.The teamneeds toknow, if it hasa fail-
ure, is it because the target that they chose was not the right target, or is it
because the therapeutic they developedwasn’t the right therapeutic?
“By knowing whether you hit the target and whether you covered the
pathway, this gives you essential information you need to know whether
the approach is going to beuseful. If therewas noeffect on thedisease,we
don’t want to develop another molecule to hit that particular target. And
you only discover that by having those biomarkers that tell you whether
you did hit the target.
“We may have a molecule, for example, where we have a safety con-
cern. The question is, didweuse it at a dose thatwasmuchhigher thanwe
need, or was it the right dose, or was it not enough? By having the infor-
mation that says yes,wedid hit the target, orwedidn’t even reach thedose
that we needed to hit the target, this will tell us what the next step is in
terms of trying to develop something for the same pathway.”
PredictionsKotzin andhis colleagueshavehad successes inwhich they haveused
biomarkers that predict the clinical effect. For example, instead of going to
a several hundred-patient study that measures hemoglobin A1c for a dia-
betes drug, he has been able tomeasure the effect in a study with only 20
to 30 subjects, using biomarkers. “Wewere able to come to the conclusion
that the drug really didn’twork, and itwasn’t going towork even ifwe stud-
iedmanymore subjects. That’s a great help. It’smuch faster, andweexpose
fewer people to the therapeutic.
“Weget tomakeour conclusion earlier and faster, andweget tomove
on to othermoleculeswithin the portfolio.Within our cancer therapeutics,
we’ve been able to see tumor shrinkage, we’ve been able to measure the
death of cancer cells within the tumor. That’s really important early infor-
mation that says, ‘Yes, this potentially important cancer therapeutic should
bemoved forward, so thatwedo larger studies andmeasure clinical effects
like progression-free survival and overall survival.’”
Kotzin’s definition of translationalmedicine is very closely tied tomed-
ical sciences. He defines it as the interface between research and clin-
ical development. “When I think of the term ‘translational medicine’, I
think of discovery research: animal studies, basic research at the bench.
And then you move that science into clinical trials, trying to understand
whether there’s going to be a benefit in patients. Translational medicine
is that interface, moving it all forward. And it’s all the science that goes
along with that transition.
“It’s this interface of translating thediscoveries youhave – either in cell
culture or in animals – into humandisease. It’s a very difficult thingbecause
the animal models are frequently not predictive of the human disease.
93www.ngpharma.eu.com
“All of the science we do here is centredaround how we take what we’ve learned inthe animal studies, or in the preclinicalstudies, and move that into humans, so thatwe can truly understand things”
Kotzin ED:13sept 8/4/09 13:52 Page 93
Certainly one way to improve safety is not to inject all study partici-
pants at the same time at the beginning of the study. Instead, one individ-
ual is exposed to a very low dose, and if that causes no ill effects,
researchers can feel more comfortable about exposing several people to
that therapeutic. The dose can be gradually increased after the first sub-
jects have been safely dosed.
Animal studies are often carried out to provide enough information to
ensure that the compoundwill not causeproblems in people. But as Kotzin
explains, sometimes a negative result in animalswill not necessarily trans-
late into humans.
“This is challenging because we’re sometimes faced with situations
wherewe have an animal toxicitywhichwe don’t believewill translate into
humans.When this happens, we have to figure out how to get beyond the
problem and convince ourselves, investi-
gators and regulators that this shouldn’t
prevent us from going into people, espe-
cially when the illness is grievous, such as
a cancer therapeutic.”
DevelopmentsThere has been an explosion in basic
science, which has had a big impact in
translational medicine, because there are
so many new ideas and new discoveries
that can now be translated to humans. As
Kotzin says, “The whole understanding of
disease has been an important develop-
ment for translationalmedicine.That’s very
dependent on new research technologies,
which give us the ability to develop new
molecular techniques.
“There have been tremendous ad-
vances in proteomics, and in how to mea-
sure intracellular pathways by measuring
proteins that get phosphorylated. And
there’s beena tremendous explosion in ge-
netics in terms of the tools you can use.
Now, you can screen thewhole genome for
polymorphisms thatmight affectwhether your therapeuticwill work in cer-
tain people and not others.
“There are also new sequencingmachines that sequence at an unbe-
lievable rate, something that nobody even a few years ago could believe
that we could do. And that’s added to the information we can add in our
early clinical trials. We can sample tumors, for example, and do unbeliev-
able amounts of sequencing of all the different genes that have changed in
those tumor cells.”
“We’ve also become more innovative in our clinical trials. We’re no
longer fixed into the same type of experiments. We’re doing clinical trials
where we learn as we go, right in the same clinical trial. We’ve combined
different, single dose andmultiple doses in the same trial. Again, ensuring
safety at the same timewe go, but increasing the information that we get,
as well as the speed that we can move in terms of getting the information
that we need.”�
“We’re measuring pathways in animals, and we have to measure the
samepathways in humans. All of the sciencewedohere is centred around
howwe takewhat we’ve learned in the animal studies, or in the preclinical
studies, and move that into humans, so that we can truly understand
things. And it’smuchmore difficult. In an animal study, you can look at the
whole animal to see whether your drug has had an effect. But in human
studies, you may be limited to sampling blood. You have to be very inge-
nious, very innovative in how you get the information. This whole process
is translational medicine.
ApprovalHowdifficult is it to get approval to carry out these early clinical trials?
Kotzin explains that there are extensive regulations that govern this
process. This is to ensure the safety of the
participants when investigating a thera-
peutic that has never beenput into people
before. Patient safety is paramount.
Because of this, there are many regula-
tions regarding what doses you can start
at and what types of animal preclinical
studies you need in order to know that the
therapeutic is likely to be safe.
These regulations have becomemuch
morestringent in the last fewyears,because
of thetragicoutcomeofTeGenero’sTGN1412
study. TGN1412was a therapeutic that was
designed to target T-cells, but instead of in-
ducing the lymphocytes to not respond, it
triggered them to releasemassive amounts
of cytokines.Oneof the study’smajor flaws
was in thedecision to inject all of thepartic-
ipants at the same time, and all who re-
ceived the activedrugbecameseriously ill.
“That catastrophe understandably
colored early development around the
world,” says Kotzin. “Although at Amgen
we’re very stringent and we like to believe
wewouldnot havedoneanything like that,
everyone became afraid of approving new therapeutics, especially biolog-
ics. Now nearly every time we apply to put a new biologic into people, the
specter of the TeGenero catastrophe comes up. This has resulted in new
regulations being put into place around the globe that delay the process.
“I remember traveling to theMHRAandpresenting amolecule thatwas
an immunologic molecule, and we arrived shortly after the TeGenero
tragedy. The regulatory group in the UK just didn’t know what to do. They
were faced with the results of this tragedy and how to prevent something
like that from ever happening again.
“It became almost an irrational fear of new clinical trials, and we had
to get beyond that using really strong science to convince people that our
trials are safe. We’ve been trying to convince regulatory groups – for ex-
ample, when we come forward with a new therapeutic – that the science
predicts that thiswill be safe.We’ve been successful, but sometimes there
has been an inordinate delay related to the fact that people are still afraid.”
94 www.ngpharma.eu.com
Brian Kotzin joined
Amgen in 2004, as
Vice President and
Head, Global
Inflammation
Development,
before transitioning
to his current
position as Vice
President, Medical Sciences. He leads this
integrated function comprised of Early
Clinical Development, Molecular Sciences,
Imaging Sciences, Clinical Immunology, and
Computational Biology. Medical Sciences is
responsible for the planning and execution
of early-phase clinical development as well
as the discovery and implementation of
pharmacodynamic biomarkers in clinical
studies at Amgen.
Kotzin ED:13sept 8/4/09 13:53 Page 94
96 www.ngpharma.eu.com
EXECUTIVE INTERVIEW
Tools for screening and validationTaqman SNP Genotyping Assays, developed by Applied Biosystems, are a state-of-the-art technology for screening and validation of polymorphisms. Recently Applied Biosystems introduced two new products to complement this offering; the high throughput Taqman Open Array Genotyping System and Taqman Copy Number Assays.
NGP. What is genotyping, and what are its applications in disease
prevention?
Xavier Cristina. Genotyping refers to the process of determining an
individual’s genotype. SNPs are currently the most commonly studied
genetic variation, although microsatellites and STRs have been widely
used in the past and new markers, such as CNV (copy number vari-
ants), are of increasing interest to researchers. The ultimate goal of
this analysis is to fi nd links between a disease (or group of diseases)
and its genetic background. Advances in the technologies available
have allowed researchers to analyse thousands, or even millions, of
SNPs to discover disease-associated genes, and validate results by
replicating studies with larger cohorts of samples using technologies
like Taqman SNP Genotyping Assays.
NGP. Why is genotyping important in clinical research?
XC. Clinical studies aim to discover panels of SNPs or other genetic
markers that can be used in the prevention, prognosis or treatment
decision of complex diseases. These biomarker panels often include
polymorphisms of high clinical relevance, such as those located in
DME (drug metabolising enzyme) genes. As they affect an individual’s
drug responses, genes that code for the DMEs represent one of the
most important classes of genetic variation in drug development
studies. Analysis of SNPs in these genes is very important during the
drug development phase, as this can indicate how
a patient will metabolise the candidate drug. As a
simple example, grouping patients into low, medium
or high metabolisers can help researchers adjust
dosage to improve drug effi ciency. This strategy is
called pharmacogenetics, and is important for the
future of personalised medicine. Applied Biosystems’
DME Taqman SNP Genotyping Assays incorporate over
2600 high value polymorphisms located in regulatory
elements and coding regions of 220 drug metabolism
and transporter genes. Later this year, users will be
able to customise the Taqman Array Platform (micro-
fl uidic card) for DME genotyping research, allowing simultaneous
analysis of eight samples for up to 96 SNPs.
NGP. What benefi ts does Applied Biosystems’ new high throughput
genotyping system provide to life scientists? How does it differ from
similar systems?
XC. The recently launched Taqman OpenArray Genotyping System com-
bines Taqman SNP Genotyping Assays with the massively parallel Ope-
nArray technology, allowing researchers to analyse more than 90,000
genotypes per day at low cost and with a simple laboratory set-up. The
nanoliter sample volumes required for the Taqman technology permit a
very simple workfl ow, with the excellent call rates critical to the success
of this kind of research. Unlike other technologies, the Taqman OpenAr-
ray Genotyping System supports full analysis from DNA to results, with
customers able to choose from more than 4.5 million pre-designed
assays, or custom designed assays to suit any gene for any species.
These assays are ready to run on OpenArray, with no hidden costs
coming from oligo fees or third party consumables that may hamper
the workfl ow. With this system, Applied Biosystems delivers market-
leading performance, support, training and service to ensure customer
satisfaction for high throughput genotyping applications.
NGP. What do you believe will be the most important developments in
genotyping over the next few years?
XC. Next generation sequencing is an exciting new technology
being used by laboratories conducting disease-association studies.
Re-sequencing of a large number of individuals will bring more ge-
netic markers (SNPs and CNVs), so there will be increasing demand
for simple yet effective technologies for validation and commerciali-
sation of biomarker panels. To complement the SNP assays portfolio,
Applied Biosystems has recently launched the Taqman Copy Number
Assays. This solution is comprised of more than 1.6 million pre-
designed assays, as well as a custom design pipeline, with specifi c
analysis software to provide a platform for all researchers interested
in CNV screening and validation of array CGH.
Xavier Cristina is the European Business
Development Manager for the Molecular
Biology Systems Division at Applied
Biosystems, part of Life Technologies.
After completing a PhD in Microbiology and
Biochemistry, he joined Applied Biosystems
in 2000 and has developed his career in
various positions in the company.
Applied Biosystems.indd 96 8/4/09 13:55:42
Compliance is typically considered to en-
sure inclusion of process steps in work-
flows and SOPs to address 21 CFR Part 11,
GCP, GAMP or other regulatory requirements.
The missing piece for sustainable compliance is
the automation of business processes (SOPs es-
sentially) in a controlled way – a way that ensures
that the appropriate steps, rules and other com-
pliance factors are clearly documented and en-
forced during process execution. In addition, life
sciences companies must have a proactive, sys-
tematicwayofcontrollingaccess, trackingactions
and capturing an accurate, ‘on demand’audit trail
of both human and system actions. Effective de-
ployment of process modelling and business
process management (BPM) software has helped
a number of the world’s largest life sciences com-
panies successfully accomplish this – on a rela-
tively short timeline and for a reasonable cost.
The first step is to model mission-critical
processes, analyse them, and define standard
global processes with regional differences where
required by regulations. The secret to success at
this stage is to make the models as robust and all
encompassing as possible. Traditional, static,
‘wallpaper’ process models will not suffice.
ConnectingThe foundations for SOP automation will be
laid within the models. To establish this founda-
tion effectively, the models must connect togeth-
er with a defined taxonomy to ensure complete
process paths with no orphan processes or seg-
ments, and be easily consumable across the en-
terprise for sharing, annotating and
collaborating. They must also natively include as-
sociated documents and content – standard op-
erating procedures (SOPs), forms, work
instructions, etc – and be accessible in role-spe-
cific views for user training and guidance.
Building from these comprehensive mod-
els, BPM software can then be applied to trans-
form the models into live operating processes.
BPM is being used by top global pharmaceutical
organisations to implement processes in new
and more effective ways. This is enabled by the
ability to take process models and associated re-
quirements elements directly from the model-
ling tool into the BPM automation engine, which
significantly shortens process design and de-
ployment timelines and ensures documentation
consistency. Process execution elements are
added within BPM – user forms, dashboards, in-
tegration services, role hierarchies and more –
bringing the process to life. The direct linkage
from the process models, SOPs and other docu-
mentation to process execution is how active
process compliance is achieved.
Executing processes on a BPM software
platform implicitly means that users are required
to follow the prescribed flow and make deci-
sions only as permitted by their defined role and
authority in the organisation. All user actions
and process data are captured in real time, giv-
ing management greater visibility into opera-
tions. Further, all of the process information
captured in the BPM software exports into stan-
dard documentation formats to serve as validat-
ed evidence of process compliance.
SoftwareFor life sciences companies traditionally de-
pendent on SOP documents, deviations and
waivers, leveraging an integrated process analy-
sis and BPM software suite provides process dis-
cipline and compliance that delivers real value in
a number of ways. These include reduced SOP
deviations through enforced process adherence;
reduced or eliminated SOP waiver forms; and
real-time process visibility and information cap-
ture to monitor process compliance. They also
include readily available process documentation
and having the ability to easily update process-
es and implement process changes when need-
ed. The overall reduction of reliance on paper
makes the process greener and portable across
the globe and produces more efficient and ef-
fective business operations.
The events in the global economy over
the past year prove that a lackadaisical ap-
proach to process visibility and control can be
disastrous. The solution exists today to help
life sciences companies achieve and maintain
active process compliance across the enter-
prise – and provide the foundation for a bright
and prosperous future. Metastorm is an en-
terprise software company focused on deliv-
ering business improvements through
effective business architecture, process
analysis and process automation technology.
Due to the many process challenges life sci-
ences companies face – from safety to innova-
tion to time-to-market – our software has
proven to be a very valuable asset. �
Automating life sciences SOPs
98 www.ngpharma.eu.com
Life sciences organisations often overlook active process compliance as partof process initiatives.
Ethan Smith has extensive experience in
business process consulting in life sciences.
He has driven process initiatives across
research and development, sales
operations, incentive compensation,
physician spend management and
compliance. He has delivered well over a
dozen BPMS implementations in the
industry and developed enterprise BPM
strategies and centres of excellence. Smith
currently serves as the Director of Life
Sciences Solutions for Metastorm.
ASK THE EXPERT
Metastorm ATE:13sept 8/4/09 13:57 Page 98
100 www.ngpharma.eu.com
Improving data quality and streamlin-
ing operations, while decreasing costs
and drug development time, are on-
going goals for pharmaceutical labs.
Significant investments have been made
in UHPLC platforms and mass spectrom-
etry technology to improve productivity.
However, these assets cannot perform op-
timally if chromatographic separations are
not adequate, as is often the case when
attempting to separate drug compounds on
C18 columns. Phenyl columns offer some
aromatic selectivity, but little hydrophobic
retention. Restek’s unique Biphenyl phase
incorporates a novel end-to-end bonding
that is a significant advance in phenyl col-
umns, providing both high hydrophobic re-
tention and aromatic selectivity in a single
column. These attributes maximise versa-
tility and can be used to increase utilisation
and return on investment for UHPLC and LC/
MS systems.
Improve UHPLC performance with proper column choice
UHPLC in the pharmaceutical laboratory
is commonly used to accelerate development
of methods, which are then scaled to a con-
ventional HPLC-based platform for routine
analysis. This common application of UHPLC
makes the need for selective column phases
just as great in UHPLC as in HPLC. While
UHPLC does produce significant gains in ef-
ficiency and speed, the gain is not so extreme
that the stationary phase is inconsequential;
selectivity is still the driving force behind
separations, as it affects resolution to the
greatest mathematical degree. Higher qual-
ity separations, not just faster separations,
are needed by pharmaceutical laboratories.
To fully realise the potential of UHPLC, labs
need to consider both speed and selectivity.
Biphenyl columns offer both C18-like and
phenyl-like selectivity (easily controlled with
mobile phase choice), and, when used in con-
junction with UHPLC, they can provide much
faster and more effective resolution for drug
substances and impurities.
Maximise use of your LC/MS asset
Novel Biphenyl column chemistry also
can increase return on investment for mass
spectrometers. Here, the benefit is not so
much selectivity (the mass spectrometer
can provide deconvolution) as it is increased
retention. Since Biphenyl columns strongly
retain analytes, highly organic mobile
phases are used to elute the compounds
into the mass spectrometer. This leads to
higher sensitivities in electrospray ionisa-
tion as desolvation of the mobile phase
becomes more efficient, ultimately giving
better ionisation. Another advantage of
using highly retentive stationary phases,
like Biphenyl for mass spectrometry is
eliminating unwanted adduct formation or
charge competition from matrix interfer-
ences that are less retained by the column.
Commonly used C18 columns are excellent
for retaining hydrophobic solutes, but
fail when retaining hydrophilic solutes. In
contrast, Biphenyl columns are capable of
retaining both hydrophilic and hydrophobic
aromatics better than conventional C18 and
phenyl phases, resulting in a wider range of
applications and better mass spectrometer
asset utilisation.
Alternative and easily controlled se-
lectivities give Biphenyl columns a unique
versatility, leading to a higher return on in-
vestment and better utilisation of instrument
resources. Since Biphenyl columns offer both
aromatic selectivity and hydrophobic reten-
tion, orthoganol separations can be achieved
with simple mobile phase changes. This
‘tunable’ selectivity gives markedly better
separations for molecules differing in degree
of unsaturation, double bond position, or
electron withdrawing groups. Improved MS
sensitivity is also possible, due to the use
of more organic mobile phases. Biphenyl
columns are available on a variety of silicas,
including a fully scalable line accommodat-
ing UHPLC-HPLC method transfer. Versatile
Biphenyl columns can improve utilisation of
UHPLC and LC/MS resources and are an ideal
tool for method development.n
ASK THE EXPERT
Increase ROI with novel column chemistry
Richard Lake is the Pharmaceutical
Market Development Manager
at Restek Corporation. He is
responsible for overseeing the
development and application of
chromatographic products for the
pharmaceutical industry. He has
over 13 years experience including
positions as lead chemist, LC and
GC method developer, stability
manager, and study director for
pharmaceutical studies.
“Alternative and easily controlled selectivities give
Biphenyl columns a unique versatility”
By Richard Lake
Restek.indd 100 8/4/09 13:46:29
102 www.ngpharma.eu.com
Building relationships
around the globeWyeth’s Joan Shen examines the benefi ts of choosing
international locations for clinical trials.
As Medical Director for neuroscience at Wyeth, Joan Shen is used to work-
ing with people from around the world. She is currently focused on con-
ducting global trials for phase II and phase III, for indications including
schizophrenia, bipolar and depression. “My day-to-day job is to work with
clinical scientists to generate protocols and select the countries, and then
conduct trials and analyse the data to get the results,” she explains. “We
coordinate with the other project management functions and propose to upper manage-
ment what we think the best strategy is to move forward with a certain compound.”
Clinical trials are becoming ever more complex, with larger patient groups, and are
often conducted internationally, meaning it can be challenging to conduct trials in a
timely and cost-effective manner. Shen points out that the main things to keep in mind
are speed and quality. “Wyeth has been back and forth in terms of what are the best
methods, and in the last two years we have generated a group called country visibility.
We call it the site management group, as distinct from the study team.
“This group helps us to facilitate the selection of countries and the visibility of stud-
ies company-wide. Once we get approval to move forward with a study and get a budget
in place, we have a study mobilisation meeting with all the functions, including the man-
agement group. That needs to be planned six to nine months ahead of time.
“We generate a synopsis of the study and a questionnaire about the site country’s
visibility, and the special site management group takes them and sends them all over the
world, wherever Wyeth has attachments. They collect the feedback on what is required,
such as the number of patients or disease areas or placebos needed. They then give feed-
back to us and based on that information we select which site we want to go to. That helps
us get collective information and from that we can generate a database based on site
CLINICAL TRIALS
joan shen.indd 102 8/4/09 13:49:21
103www.ngpharma.eu.com
requirements for most of those regions ask for the particular patient
population from their region. If early on you know you’re targeting those
populations, it makes life easier when you submit to the FDA and to get
market approval. That’s one of the incentives we are moving towards
these global studies.”
Different regulationsRegulations also vary between countries. Shen has found that
India has an excellent regulatory environment. She anticipates a
three to four month approval period there, because the board of
health is relatively easy to work with. “As long as the ethics group
committee agrees with your proposal, you have no problem. This is
not always the case in other countries.
“In Japan, the PMDA is really strict on what they do. Usually they
ask for phase I data before you can move forward, and the other
problem is slow enrollment, but I think the PMDA is now much more
open-minded. They like open dialogue, so the study team has to put
a lot of effort in to support this. We send our experts over there to
talk to them so they have a whole picture of the safety data, and then
they feel comfortable.
“Right now we anticipate novel chemicals getting approval in eight
or nine months, but again this is a regulatory bottleneck. There’s a huge
potential for markets so we usually don’t give up; we’ll keep trying.”
According to Shen, South Africa also has an excellent regulatory
environment, with an approximate three to fi ve month approval period.
The downside is that it’s on the other side of the world, and to travel
there is diffi cult. “It depends on disease areas. Some of the diseases
are much easier to conduct studies in; some are not; it depends on the
availability of the treatment.
performance in the past, and the regulatory
environment changes.”
Shen points out that the downside of
this is that the quality of the site may not
get as much consideration as it should. She
believes a joint effort works best, between
country visibility groups and the study team
to look into the specifi c capacity of and the
quality of the sites.
International benefi tsShen leads trials in various sites around
the globe, including China, India, Japan,
South Africa and Eastern Europe. While big
pharma companies have been criticised for
choosing these locations based on cost, and
have been accused of ‘taking advantage’
of unsophisticated local populations, Shen
explains that there are legitimate reasons to
site trials abroad.
“We need a diversifi ed patient popula-
tion, which is very important for development
if you are marketing all over the world; and
secondly the trend toward placebo results
and so-called failed trials is increasing in the US. That means we are
getting ‘fake’ patients or treatment resistant patients, or patients who
have been recycled from other studies. We can’t see the true treatment
facts if we repeatedly use the same population, and the commercial
treatment sites who try their best to get patients don’t necessarily pro-
vide the best quality.
“We can lower the placebo rates because we know going to coun-
tries like China, India and South Africa you see many more patients who
have not been exposed to clinical trials and to second generations of
certain drugs; for example, psychotics. It then becomes much easier to
see the true effect.
“I remember one of the studies I was involved with in the US in
which we had no effect on the treatment between the two popula-
tions, but we were able to identify the drug effects with Russian sub-
jects. Overall, it was statistically signifi cant, but if you put aside the
Russian patients you didn’t see it. We were able to discuss this with
the FDA and they agreed with our data. The quality of the data speaks
for itself.”
Of course there are disadvantages to international clinical trials.
One of these, as Shen points out, is that some countries require a
much longer time for regulatory approval. “Some countries are quite
fast, while others are very slow. For example, in China in my experi-
ence once you hit the ‘yes, go’, they are able to really move very, very
quickly. In one of the trials I remember in China, they had already fi n-
ished their enrollment but some other countries were so behind that
we asked China, ‘Can you increase the number of patients to fi nish up
all the studies?’ And they did.”
While Shen prefers to go where there is a bigger potential patient
population. “It’s also the market that we’re looking for. The regulatory
Joan Huaqiong Shen
is Medical Director for
neuroscience at Wyeth. She
began her career as a surgeon,
then obtained a PhD and
training in psychiatry. Shen,
who is board-certifi ed in
psychiatry and eligible in clinical
pharmacology, worked for Eli
Lilly before moving to Wyeth in
2005. She leads clinical trials
to China, India, Japan, South
Africa and Eastern Europe.
joan shen.indd 103 8/4/09 13:49:22
104 www.ngpharma.eu.com
pany is doing. I’ve currently initiated this in China, to try to build
long-term relationships with the key opinion leaders there, as well
as the PIs. To better understand their needs we help to train them.
We help them to obtain the disease knowledge to get the best qual-
ity from the clinical trials.
“Those regions are looking for collaboration. They don’t want to
be treated just as a site: give us patients and we’re done. They want to
be treated with mutual respect and also have long-term collaborations.
They also like to have a co-author on the publication.”
In Shen’s view, it’s about building a long-term relationship. “Many
big pharma companies have been operating in countries like China for a
long time, so they already have good reputations there. This can mean
that when they have four or fi ve trials they prioritise ours, which can be
signifi cant factor in enrollment rates. As a big company, what you need
to do is build up a relationship with local government. If you get their
support, things are much easier.
“We also have good relationships with India and many other coun-
tries, and this does make a huge difference. We as a study team go to
visit the sites. We exchange scientifi c information and then make our-
selves available if they have problems or questions. Once you start the
trial, you can’t just throw that out and leave them on their own.
“In those regions they are still learning to ensure study quality.
For this reason, I would strongly suggest providing a refresher or other
visits to rejuvenate the study’s energy and to refresh the memory of
what’s needed, otherwise quality could deteriorate throughout the
study, especially if it’s long. That’s how I feel about the energies we
need to put in to help get recruitment as we need it.”
Another important aspect of building relationships with interna-
tional sites is education. As Shen explains, training at sites is very im-
portant, as well as training the company site managers. It’s not a matter
of setting up the trial and leaving them to get on with it. “You can’t just
give it to the region and wait for results. That never works very well.
“We need to educate people, to help them understand that if they
want to have those medications available for the local population, they
need to make sure patients understand that joining studies helps them
and will help others in the future to get medicines early on. That’s also
the selling point for the government when they say, ‘You’re trying to
test our population.’ Then we’ll say, ‘This is the only way we can get
this on the market early so everybody can have this available.’ Those
are the things we want to see not just for clinical trials, but also for
long-term patient benefi t.”
“Ethics committees in other countries sometimes also ask a lot
of questions about placebo: why you want it and can you do it with-
out it. Eastern European countries are stricter now about placebos
as well. Originally countries like Poland were pretty open to clinical
trials but now the psychiatric committee there has issues with some
kind of consensus.
“As long as there’s available treatment they do not suggest that
we use placebo in the studies, so we had to withdraw our applica-
tions. We don’t know the trend but it looks like as a company we are
moving towards more Asian and South American locations instead of
Eastern European countries, although Russia is currently has a pretty
good regulatory environment.”
Patient qualityPatient recruitment methods also differ depending on the country
in which the trial is being carried out. Shen says she is strongly opposed
to the notion that patient recruitment should be conducted based on
speed alone. “I want to recruit patients quickly, but I also want to em-
phasize the quality of the patient. We also face challenges with patient
trust in some regions.
“For example, in China and Taiwan the method of recruiting patients
largely depends on the relationship with the site. In those countries pa-
tients need therapeutic alignment with the physicians, so if they trust
the physician they come to the studies and stay with the treatment, but
if they don’t it’s hard retain them or get them to come to clinical trials
because it’s still a relatively new concept in those regions.
“You have to have a very good relationship with the site. I cannot
emphasise that enough because that’s one of the things our com-
WYETH FAST FACTS
• Founded in 1926 under the name
American Home Products Corporation
• Headquartered in Madison, NJ
• Operating in more than 100 countries
• 47,500 employees worldwide
“We need a diversifi ed patient population, which is very
important for development if you are marketing all over the world”
joan shen.indd 104 8/4/09 13:49:23
A lthough we are now beginning to benefit
from the genetic, genomic and proteom-
ic discoveries over the last decade, the
implementation of biomarkers for patient strat-
ification to improve diagnostics, prognostics and
companion assays for oncology targeted thera-
pies is still an extremely challenging endeavour
with limited success. This is due to many factors,
including the lack of implementation of true sys-
tems-based approaches in clinical development
to achieve multiplexed, multi-parametric, phe-
notypic profiling of protein biomarkers and cor-
responding tissue microanatomy.
PredictionsAccurate prediction of biological events,
whether it be disease prognosis, toxicity or thera-
peutic response, will become increasingly similar
to how we predict other multivariate phenome-
non; for example, the weather. A hundred years
ago farmers had to rely largely on qualitative, non-
integrated methods such as a weathervane, cloud
patterns, and an almanac for identifying weather
trends. Today, when one wishes to see the weath-
er forecast, a visit online to any one of a myriad of
weather-related websites provides a variety of im-
ages and quantitative information at our finger-
tips. Multivariate modeling integrates several
factors (images, temperature, barometric pres-
sure, wind speed, historical data, etc.) yielding ac-
curate weather forecast information, which we are
then able to make decisions with.
There is no doubt that our efforts in ‘forecast-
ing’ biological events could benefit from a similar
approach. However, at the present time, we are
often looking for ‘silver bullets’ that will facilitate
medical decisions, drug prioritisation or clinical
trial enrichment. In the press, we often read about
a single gene or protein that is responsible for can-
cer. This kind of over simplification of the problem
further inhibits our abilities to make strides in di-
agnosis, prognosis and drug development.
ProblemsCompounding the problem is the fact that the
current sequential clinical development paradigm
does not facilitate the development of multivari-
ate assays that can aid in a better understanding
of how multiple signal transduction pathways can
affect the progression or therapeutic response of
an individual’s unique cancer. This is because in
order to develop these kinds of assays for a spe-
cific patient set, pathologists need access to pa-
tient tissue samples from the specific clinical trials
in which they are conducting.
Phase III clinical trials are where there are
usually adequate patient numbers for multivari-
ate assay development. However, by the time clin-
ical trials are in phase III, it is too late to develop
a training model, validate the model, and then run
an additional prospective study to demonstrate
feasibility under FDA guidance. As such, bio-phar-
maceutical companies are forced into a dynamic
that often only considers the target in question
(i.e., Her2/neu, EGFR, etc.) or related molecules
within the pathway that the therapeutic agent
seeks to perturbate. The result is that even
though we have examples of personalised medi-
cine such as Herceptin, response rates are still
lower than desired even among patients who
have been classified as potential responders via
a companion assay (i.e., immunohistochemistry).
Although a particular patient may have an over-
active angiogenesis-related biomarker which
shows up in the immunohistochemical test, there
is currently little opportunity in the clinical devel-
opment process to stratify patients by utilising the
simultaneous measurement of biomarkers that
belong to multiple pathways. These other path-
ways may be compensating when the original
drug target is inhibited, leading to the low re-
sponse rates we are faced with today.
SolutionsA few solutions might be for the FDA to fa-
cilitate a clinical development process that is
more interactive than sequential, which could fa-
cilitate true systems-based, multivariate ap-
proaches. Additionally, further guidance for in
vitro diagnostic multivariate index assays
(IVDMIAs) is needed. Bio-Pharmaceutical drug
developers, cancer research centers, technolo-
gy providers and clinical service labs should
work together more closely, synergising efforts
where possible. As described in the article in
‘Imaging is Key to Success in Translational
Research and Drug Development,’ image intel-
ligence solutions that can be implemented
across the entire biomedical continuum will also
be needed. Further, we should accept that com-
plex biological problems will require systems-
based approaches to understand them as
opposed to approaches based on an oversim-
plification of the underlying biology. n
106 www.ngpharma.eu.com
Why the implementation of biomarkers for patient stratificationto improve oncology-targeted therapies is still an extremelychallenging endeavour with limited success. By Peter Duncan
ASK THE EXPERT
Peter Duncan joined Definiens AG in December of 2008 as Global Director, Marketing and Business
Development, Life Sciences. In this capacity, Duncan manages external collaborations with leading
cancer centres, industry partners and biopharmaceutical companies. Prior to Definiens, he served as
Vice President, Business Development at Aureon Laboratories and was responsible for several
collaborations around applying morphometric imaging techniques to multiplexed
immunofluorescence assays applied to formalin-fixed, paraffin embedded tumor tissue. Peter has
over 15 years of executive sales, marketing and business development experience spanning the
analytical chemistry, biotechnology and diagnostic industries. He holds a BS degree in Biochemistry
from the University of Vermont.
The challenges of biomarkers
“The implementation of biomarkersfor patient stratification to improve
diagnostics, prognostics andcompanion assays for oncologytargeted therapies is still an
extremely challenging endeavourwith limited success”
DEFINIENS ATE:mar09 08/04/2009 13:42 Page 106
109www.ngpharma.eu.com
NGP. What technologies can companies use to
help reduce the cost of drug discovery?
Simon Wood. It is clear that many different
informatics solutions are used to manage the
huge amounts of data generated in the drug
discovery process. This data and information
are key to making informed management
decisions for individual discovery projects,
especially as far as go/no go or fail early de-
cisions are concerned, and these are key to
efficient use of resources, including people
and money. However, this information is often
fragmented and isolated throughout the dis-
covery organisation. Laboratory informatics
solutions, such as scientific data manage-
ment systems (SDMS), can unify this data
into a single source, and make it available
to the people and systems that need it. This
supports efficient decision-making, therefore
helping control costs.
Ed Addison. At TeraDisc, we are reducing the
cost of drug discovery using a QM/MM algo-
rithms with intelligent search over molecular
space using a 2200 CPU high performance com-
puting cluster. The software is patent pending
and university generated and has shown prom-
ising results in terms of achieving very accurate
binding predictions for both small molecules
and peptides. We are able to discover lead
compounds by searching theoretical space
rather than an existing molecular library. The
results are a highly focused library of good
binding leads generated ‘in silico’ in just a few
months using a tool known as ‘Inverse Design’.
We do this for clients as a service.
Life sciences computing, modelling and in
silico design have been used only in a limited
way up to now. However, the in the past four
years, the speed, memory improvement and
throughput of high performance comput-
ing has been nothing short of breathtaking.
TeraDisc is deploying over 10,000 CPUs in a
high speed network over the next 18 months
in anticipation of greater demand for process-
ing high throughput biological data, and to be
able to conduct ultra high performance in silico
binding affinity assessments using quantum
mechanics for hundreds of millions of leads per
target project. Today, we are working with the
forward thinking organisations who want an
early adopter advantage in this area.
NGP. With looming patent expiries, pharma-
ceutical companies need to be more efficient
in R&D to stay ahead of the competition. What
tools can they use to help achieve streamline
their drug discovery process?
EA. The pharmaceutical companies that are
able to use high performance computing as
a preliminary step in discovery – for virtual
screening, target validation, toxicity assess-
ment, or mechanism of action studies – will be
better positioned to save time and money in
the discovery process.
Examples of tools running on high per-
formance computers that help with drug
discovery costs are biomarker extraction al-
gorithms, target simulation, virtual screening
and toxicity evaluations.
SW. From an informatics point of view, the tools
that help companies cut the cost of drug dis-
covery are the same as the tools that will help
streamline the drug discovery process by facili-
tating the decision making process. So again it
comes down to those systems that will provide
unified access to the required data no matter
where it comes from or what systems generate
it. An SDMS, for example, should be capable of
taking project data from multiple sources, ex-
tracting key data, storing it in a format-neutral
way (which also preserves long-term value of
the data) and making it available for searching
and reporting.
Making inforMed decisions
NGP talks to a panel of experts about using
informatics solutions to manage data in the drug
discovery process.
ROUNDTABLE
“The software has shown promising results in terms of achieving very accurate
binding predictions”Ed Addison
Starlim RT.indd 109 8/4/09 15:20:57
110 www.ngpharma.eu.com
NGP. Drug firms are facing increasing demands
for compliance from regulatory bodies. What
tools can they use to help them meet these
requirements?
SW. Perhaps the most important tools that will
help drug firms meet their regulatory require-
ments are the ones that will help them imple-
ment and manage the traceability requirements
of those regulations. Some estimates put the
amount of time spent on regulatory and compli-
ance activities within the lab to be as high as
70 percent. Clearly, any informatics systems
implemented in the lab must support the
regulatory needs to try and reduce this burden.
Perhaps the most obvious example of this is
the support of electronic signatures in line
with FDA 21CFR Part 11 regulations. However,
systems such as LIMS will also support other
regulatory requirements – including managing
instrument maintenance and analyst training
and certification, inventory management and
chain of custody records. They will also provide
an automatic audit trail of actions taken and
changes made. Using informatics solutions to
manage regulatory needs not only eliminates
possible missing records, where lab staff forget
to record the required information, but also
makes the retrieval of regulatory data easier.
EA. One tool that we are developing is a high
performance PK/PD algorithm that runs on
high performance computers and that is capa-
ble of analysing clinical trials outcomes on very
large trials with many parameters, even high
content data. Our tool is based on a Bayesian
approach. This will enable drug developers to
provide statistical proof of fine grain outcomes
useful for personalised medicine, biomarker
identification, and/or risk assessment.
NGP. How do you see the future of drug discov-
ery developing in the next few years?
EA. We believe the market must prepare for a
transition to a greater use of life science com-
puting to be more efficient, and from a busi-
ness point of view the market must address
the transition to personalised medicine. This
means that more drugs with smaller market
sizes must be developed quicker.
Despite the uncertainties surrounding
precise cost and time estimates in the field
of personalised medicine, various impacts on
the drug development process, pipeline and
industry value chain have been identified as
more powerful and safer drugs, due to genetic
specificity and ability to choose dosing based
on biomarkers. This also requires the provi-
sion of genetic and other diagnostics to test
biomarkers, which has led to an expected im-
provement in drug discovery and development
through increasing knowledge of genomics
and bioinformatics.
Another impact has been the increased
need for IT in the drug development, discovery,
approval and clinical administration process,
along with a decrease in pharmaceutical pric-
ing and healthcare costs, due to lower develop-
ment costs
The onslaught of personalised medicine
in the marketplace represents a classic dis-
continuity. It is currently in the ‘incubation’
period. However, when personalised medicine
Simon Wood is Executive Director,
Marketing and Education at STARLIMS
Corporation. A leading authority in
laboratory informatics, he is a popular
lecturer on system implementation
and laboratory IT. His prior experience
includes establishing, for Thermo
LabSystems, the industry’s largest LIMS
implementation team. He holds a PhD
from Sheffield University.
Ed Addison is an established serial
entrepreneur and CEO of TeraDisc, a
company that provides high performance
computing applications for drug discovery.
Named “Entrepreneur of the Year” after
achieving #51 on the National Fast 500
in 1994, he is also an Adjunct Professor
of Bioinformatics at Johns Hopkins
University.
reaches the rapid growth period, there will be
a paradigm shifting affect in the industry that
accounts for all the factors above. While the
specific timing and magnitudes of the met-
rics involved are not known yet, the gradual
industry shake up expected to occur will have
a significant impact on the business models,
pipelines and growth rates of major pharma-
ceutical companies. Embracing life sciences
computing models will greatly improve the ef-
ficiency of this transition.
SW. The pressure on drug companies to
streamline their pipeline and bring candi-
date compounds to market quicker will only
continue; and the pressure will be on drug
discovery organisations to identify high po-
tential compounds to deliver to the rest of the
value chain. Continued consolidation within
the industry in terms of mergers and acquisi-
tions and the continued development of col-
laborative projects will all affect drug discovery
organisations. The reliance on IT solutions will
increase, but organisations will be looking for
unified systems and solutions that allow them
to concentrate on realizing the true value of
the data and information that exists within the
whole organisation, as opposed to just manag-
ing the data produced. The ability to deliver the
data and information produced throughout the
organisation to the people and systems that
require it will be of paramount importance. n
“Some estimates put the amount of time spent on
regulatory and compliance activities within the lab to be
as high as 70 percent”
Simon Wood
Starlim RT.indd 110 8/4/09 15:20:59
NGP. Drug repositioning seems to be attracting
increasing interest in thepharmaceuticalworld.
Is there a real need for it?
Andreas Persidis. Drug repositioning has been
attracting the interest of pharmaceutical and
biotech companies for two reasons: commercial
and scientific. On the commercial side, the sim-
ple truth is that companypipelines are not grow-
ing at the desired pace. At the same time, the
return per dollar or euro spent in the lab has
been steadily decreasing. Pharmaceuticals have
been trying a number of tactics such as ‘light re-
formulations’ that extendpatent protection and
company buyouts that instantly grow their
pipelines with new compounds. These tactics,
however, are proving less viable as regulatory
bodies tighten their criteria andwe begin to run
out of companies to buy.
On the scientific side, thepromiseof certain
technologies is not unfolding as hoped for. At
the same time, we are all beginning to realise
some of the limitations of our existing knowl-
edge, not only at the disease, but also at the bi-
ology and drug mechanism levels. In this
context, it makes sense to ‘milk the knowledge
cow’by recombiningourexistingknowledge inas
manynewwaysaspossible,with the specificaim
of identifyingworkabledrug-therapeuticareacor-
relations that have so far escaped our attention
and screening systems. So, yes, in my opinion
there is a real need for drug repositioning.
NGP. Is drug repositioning here to stay?
AP. I think drug repositioning is here to stay and
eventually could even lead to the transformation
ofdrugdevelopmentaswecurrentlyknowit.Drug
repositioning representsashift in thewaywe look
at biology and develop drugs, by actively exploit-
ing the interconnectivityofbiological sub-systems
andprocessesaswell as themulti-facetednature
of disease mechanisms. The tools and methods
that are currently developedwith repositioning in
mind, could however be applied to de novo com-
pounddiscoveries,aswellas to improvingourun-
derstanding of biology itself. Then, there is a very
sound financial argument that works in favour of
repositioning. In certain circumstances reposi-
tioningcandeliver results for20percentof thetyp-
ical cost of bringing a new compound to phase II
using traditional approaches.
Finally, thereareefficiency reasons thatmake
active repositioning a sensible strategy to follow. I
think it is clear that everyVPof clinical or business
developmentwants to knowall viable uses of the
compoundsat theirdisposalsoastomaximisethe
exploitationpotentialof their company’sportfolio.
This isnotpresently thecase,anddrugreposition-
ing isonegoodway toaddress the issue.
NGP. In adrug repositioning context,what is the
role of academia and of traditional drug devel-
opment processes?
AP. By definition, drug repositioning works on
existing knowledge – it reshuffleswhatweknow
about diseases and compounds in new and in-
terestingways that hopefully lead to newor bet-
ter therapies. Butmanymayhold thatmuch that
can be repositioned already has been. Here
however, we need to remember that each new
bit of knowledge interacts with many prior bits
of knowledge, potentially creating opportunity
for new discoveries.
If we look at each newdiscovery as a singu-
lar chunk of knowledge, then every single new
chunk that is added to our existing collection of
chunks (our entire body of biological and drug
knowledge) creates thousands, if notmillions, of
new combinations to be explored. It is also clear
that the clinical trials phases are here to stay for
quite some time.Drug repositioningholds some
significant promise to shorten and make less
costly the development of drugs; it is clear, how-
ever, that traditional scientific discovery as cur-
rently practiced in academiawill continue toplay
a significant role.
NGP. Is there a best way in which drug reposi-
tioning can be practiced?
AP. Drug repositioning is not a new idea. It has
beenhappening since the early 1990s,mostly as
a serendipitous process. In recent years, how-
ever, and as its value becomes more evident, a
number of companies have developed tools to
make the process more systematic. Most use
mathematical or othermodels that by necessity
make certain assumptions andmay omit seem-
ingly unrelated but probably relevant knowl-
edge. They also tend to focus on thebenefit side
of the equation, i.e., finding the newapplication
for the compound or drug. Some companies,
such asBiovista, go a step further by simultane-
ously addressing the risk side of the equation,
namely the adverse effects profile, making for
much more balanced predictions of the clinical
outcome of the repositioned drug. �
The future of drug repositioning
112 www.ngpharma.eu.com
Andreas Persidis is the co-founder
and CEO of Biovista Inc. He has
conducted research work in the field of
applied artificial intelligence,
culminating in the development of
Biovista’s technology platform. Persidis
is a project reviewer and evaluator for
the European Commission and the
Austrian government and serves on a
number of expert panels on knowledge
discovery technologies.
EXECUTIVE INTERVIEW
Andreas Persidis talks to NGP about the transformational potential of drug repositioning.
For further information please contact [email protected].
Biovista ED:13sept 8/4/09 13:41 Page 112
114 www.ngpharma.eu.com
loses a scientist affiliated with your project, you can lose access to
months – even years – of knowledge. If the only other record of the
scientist’s work is a paper notebook, the odds of recovering that
knowledge fall dramatically.
Patent filing and defenseOnce the research is completed, your partner must assist in
identifying and protecting your research. This includes: findings that
match the raw data, human readable and printable records in accept-
able forms (such as XML and PDF), preservation of time/date stamps
and signatures by inventors and witnesses,
preservation of the audit trail for the records,
and authenticating that the records are origi-
nal and have not been tampered with.
PreservationEven after a patent has been protected,
your partner’s procedures could still under-
mine the profitability of your investment.
Regulatory agencies require many records
be retained long-term, in some cases beyond
even the end of the patent. This includes
disaster recovery, data backup, role-based
access controls, audit trails, computer system
security and other measures that will help
safeguard your R&D investments. Indeed,
you must even look beyond the partner’s
procedures and consider their longevity as
well. If the company may not survive to meet
regulatory requirements, you must address
the preservation of critical IP.
Partnerships can deliver tremendous
benefits through innovative technologies,
lower costs, greater speed and agility, and a
range of talent and expertise not practical to
maintain within a single organisation. How-
ever, the value generated in a partnership is
realised not through the contents at the bottom of a test tube, but
rather through the creation, capture and exploitation of the resulting
knowledge, records and intellectual property. With great opportunity
comes great risk, increasing the necessity of protecting your invest-
ment by enforcing adequate procedural and technical controls both
within your organisation and within your partner’s. Be certain you
can trust – and verify – the results of collaboration; your success is
at stake. n
DocumentationIf collaborators have inconsistent documentation practices, you
must assume that Intellectual property (IP) defense will be judged on
the lower of the two standards. Your investment can be put at risk if a
partner does not share your compliance with appropriate local and in-
ternational regulations including: signing and witnessing lab records,
fully documented evidence trails, and recent US procedural require-
ments to keep electronic lab records in their original electronic form.
If a partner were to lose data or witnessed signatures, you run the risk
either of failing to adequately support your claims or that the partner
might subsequently falsify this information to
redress the losses.
Advanced disclosureDisclosure of data before patents are
filed is always a concern, but this risk is ex-
ponentially greater in a collaborative environ-
ment. Policies relating to the presentation or
publishing of data can vary greatly between
organisations, particularly in academic envi-
ronments that place greater weight on public
disclosure. Technology has also increased
the number of communication channels,
including conferences, papers, grants sub-
missions, webcasts, email, chat, podcasts
and wikis. Each new communication medium
makes it that much more difficult to monitor a
partner’s activities.
Adverse dataFailure to identify and address adverse
data findings is another source of risk for re-
search organisations. During legal proceed-
ings for patents or efficacy, these ‘skeletons’
can put your investment at risk. Recognise
the implications of the procedural and tech-
nical measures that your partner uses to
identify potential issues with drug safety, efficacy or stability; as
well as notes or collected evidence that fails to support your scien-
tific hypotheses.
Organisational risksWhen considering the risks of collaboration, it’s natural to focus
on paper and electronic records. Unfortunately, even the company’s
personnel policies can create risk for your investment. If a partner
INDUSTRY INSIGHT
Six riSkS to intellectual property By Jeff Spitzner
While partnerships play an increasingly critical role in the drug development lifecycle, a poorly structured partnership can expose your intellectual property to considerable risk. By understanding six common sources of risk, you can take steps to protect your investment.
Jeff Spitzner has more than 20
years’ experience in management of
scientific software and biotechnology
companies and has been recognised
as a leader in electronic lab notebooks
(ELNs), bioinformatics, and knowledge
management. He is currently President and
Chief Science Officer of Rescentris.
Rescentris.indd 114 8/4/09 14:00:09
NGP.Why is it hard to predict a patient’s response during the development
of a new drug?
Allen Roses.One never knows how one is going to respond to an external
chemical given to the body. What is made harder is if you don’t study it
when it occurs, andmost people have not done so because it was prohib-
itive and there was no way of really doing so in
the past, but now you can apply pharmacoge-
netic technology during the development peri-
od. As a result of this, when an adverse event
occurs, there are now ways of finding the ge-
netic markers that are associated with those
people who will respond or those people who
may get an adverse effect.
NGP.What effects will multi-gene studies have on
the discovery and the drug development?
AR. When we’re working on a drug that’s in a particular therapeutic area,
we canuse candidate gene lists that have to dowith either the disease and
whatwe thinkweknowabout thedisease,or themechanismof themolecule
thatweareproviding,whichwewouldknowabout.These couldbehelpful in
termsof focusonefficacyeffects thatwewouldsee inusingthedrug.Thedrug
isused ina trial thatcontainsacertainpercentageofpeople thathavetheclin-
ical endpoints. The initial candidate gene lists that wewould use –which ac-
tually arepolymorphisms, or varianceswithinor around the candidate genes
– thosewouldbe thefirst thingswewouldstudy.Andabout80percentof the
time,weachieve reasonable data.
NGP. Why is pharmacogenetics expanding in the
industry?
AR. There are a couple of reasons. The industry is
contracting because it has been operating on the
overall ‘one size fits all’ concept. We’re going to
make a drug, everybody’s going to take it at the
dose at which we put it out there. With all the
failures of proof of concept – the inability to
show efficacy with many, many molecules – and
with the safety problems that are associated
with many molecules, drugs have come under both public and news-
paper/journalistic attack for being unsafe and for not working. But the
real driving reason for all this is always the finances, and it isn’t as im-
portant that you get your drug registered, although that certainly is im-
portant, what’s critically important is to get it reimbursed.
The genetic advantage
116 www.ngpharma.eu.com
Allen Roses tells NGP how pharmacogenetics can help cut the size and costof clinical trials.
PHARMACOGENETICS
106,000deaths and 2.2 million seriousevents are caused by adverse drugreactions in the US each year
Roses ED:13sept 8/4/09 13:59 Page 116
Pharmacogenetics can identify the
people in advance who will respond to
the drugonce it’s on themarket because
of studies that were done during devel-
opment – companion diagnostics. The
insurer or the national health service, or
whoever’s making these decisions, can
estimatewhat the cost of thedrugwill be
if given to those people with predicted
responses, and not given to those peo-
ple who don’t have a predicted re-
sponse.
There is a very different approach in
Europe than in theUS. In theUS, thegov-
ernment or a government agency does-
n’t make the decisions; they’re made by
panoply of large healthcare providers.
Pharmacogenetics can provide value to
the drug at a reasonable cost by identi-
fying people who will respond that the
drug can be reimbursed, protecting the
drug against adverse events by develop-
ingprognostic or diagnosticmarkers and
identifying people who might have ad-
verse events.
NGP. What is the importance of an effi-
cient collaboration between industry
and academia in regards to collection of
pharmacogenetic data?
AR.There are twowaysof looking at this:
a pharmacogenetic study, in a single
study, can be done in a general universi-
ty. Usually this isn’t done until after the
drug is on themarket, before they canhave access to it, and is usually look-
ing at adverse events,which are all a negative influence as far as drug com-
panies are concerned.
We’ve established a series of external companies, small, which are
called the BlueWine Group, after the Duke Blue Devils mascot. The Duke
Wine Group has three companies: one of them is Cabernet, and Cabernet
Pharmaceuticals has a strictly laser focus on pharmacogenetic consul-
tation and project management for large pharma. This is how I spend 20
percent of my consultation time at Duke.We’re not getting anything out
of it except keeping these studies going and allowing them to achieve a
better chance of getting proof of concept, and a better chance of keep-
ing their drugs on themarket and providing new drugs, all of which they
totally own.
However, becausewe’re creating companion diagnostics for themand
their drugs, we also have the opportunity to commercialise those com-
panion diagnostics. Therefore, a second company, called Shiraz
Pharmaceuticals, is in charge ofmaking the arrangements and taking care
of all the things the drug company doesn’t want to, or doesn’t have the ex-
pertise in-house to do, to commercialise those companion diagnostics.
In the case of Shiraz
Pharmaceuticals, it’s part of Dean
Drug Discovery: it has a relationship
with theDeanDrugDiscovery research
institute that we have, which is called
the Dean Drug Discovery Institute. Any
milestone in royalties thatare collected
by Shiraz, 80 percent will be paid to
DukeUniversity.So itbecomesasource
of income for Duke, and it also be-
comes an automatic thought process
about, if we have some IP that’s devel-
oped inside the university, maybe we
should go to Shiraz to see about com-
mercialisation.
We get commercialisable IP from
private individuals, from Duke and
other universities, andas timegoeson
from the companies with whom we
have contracts for the development of
companion diagnostics. That then al-
lows people within the university to
understand how the market for drugs
actuallyworks, and it also shows them
ways that we can share in technology,
not as a one-off but with defined ex-
pertise. That defined expertise is
being developed transferred in educa-
tional programs, both to the Fuqua
School of Business and to the Duke
Medical School.
The third company that’s been
started is a company called Zinfandel
Pharmaceuticals, so they’re all red
wines. Zinfandel Pharmaceuticals is preparing to do a prevention clinical
trial studywith Alzheimer’s disease. It’s taking IP thatwasdeveloped for di-
agnostic purposes to predict whowill develop Alzheimer’s disease atwhat
particular age, sowe can take an epidemiological population between ages
62and87 and predict a high-risk group versus a low-risk group.
Then we would design and register our study with the regulators
using pharmacogenetics to identify the high risks during the course of
the study of the people who would go from normal to the development
of Alzheimer’s disease. Instead of needing hundreds of thousands of
people to do that kind of study, you can do it with much lower numbers,
if it works.
Wewill partnerwithmajor pharmaceutical companieswhohaveamol-
ecule thatweare interested in.We’re designing thepreliminary studieswith
several epidemiological populations across the world to see how fast we
could recruit people who are virtually or seemingly normal between the
ages of 62 and 87. At the time the study would be ready to start, probably
in late 2010 or early 2011, we would already have names of people who
have said theywould be interested in participating and get a very, very fast
start to the study. �
117www.ngpharma.eu.com
Allen Roses is Jefferson Pilot Professor of Neurobiology at
Duke University and CEO of Cabernet Pharmaceuticals,
Inc. He also serves in several capacities at Duke
University: as Jefferson-Pilot Professor of Neurobiology
and Genetics, as Professor of Medicine (Neurology) as
Director of the Deane Drug Discovery Institute, and as
Senior Scholar at the Fuqua School of Business. He
recently returned to Duke after a decade-long career as a
Senior Vice President at GlaxoSmithKline .
Roses ED:13sept 8/4/09 13:59 Page 117
118 www.ngpharma.eu.com
The three genomic technologies (se-
quencing, microarray analysis and
real-time PCR) have contributed signif-
icantly to the understanding of biologi-
cal mechanisms underlying disease processes
and are well-established research tools in the
drug discovery and development process.
In particular, the identifi cation of dis-
ease-specifi c genetic signatures, the inves-
tigation of mutations in disease-associated
genes, and the quantifi cation of expression
of these genes can provide new insights into
the pathogenic mechanisms of a disease,
and may ultimately lead to new therapeutic
approaches. In addition, gene expression
monitoring could potentially be used for im-
proving the drug development process, such
as in predictive toxicology or in better predic-
tion of dose-response effects.
The identifi cation of sub-segments of
patient populations on the basis of meaning-
ful biomarkers to allow for selection of the
group of patients most likely to respond, to
improve the dosage of a drug or to monitor
disease progression, is also increasingly
based on the use of molecular methods.
ThroughputHypothesis free analysis of the expres-
sion levels of all genes involved in the biology
of a disease would provide great insight into
the alterations leading to a particular disease
state. Although this approach is increasingly
employed, driven by the availability of next
generation sequencing approaches, the
use of microarray analysis has a longer his-
tory and track record in the measurement of
gene expression levels, SNP profi ling or copy
number variation measurement. Microarray
profi ling is powerful in providing data points
at reasonable costs. The results, however,
need to be validated by real-time PCR to allow
for greater sensitivity, increased dynamic
range and confi rmation of specifi city.
Among the challenges in real-time PCR
is coping with the complexity of the study.
Many experimental set-ups will require high
sample numbers to be measured for one or
a few target genes, whereas measurement of
gene signatures will require the analysis of a
higher number of target genes per sample.
Currently, real-time PCR is well established
in 96- and 384-well format. Especially for
the analysis of gene expression patterns,
the required sample amount for multi-well
analysis on 384-well plates can be insuf-
fi cient, depending on the sample type being
used. Whereas pre-amplifi cation of the RNA
can increase the number of analysis that
can be performed on a single sample, many
researchers prefer to decrease the sample
volume required. Innovative technologies
have been developed that allow real-time
PCR measurement in volumes well below the
µl range. Whereas these technologies can
be applied without pre-amplifi cation when
the target gene concentration in the sample
is high enough, they will suffer from lacking
sensitivity for lower expressed genes.
To balance throughput requirements
with sensitivity, the availability of a 1536-
well real-time PCR system has several advan-
tages. Real-time PCR can be performed in 0,5
– 2 µl for suffi cient sensitivity, plates can be
loaded with a selection of existing automat-
ed pipetting technologies and the plate can
be fl exibly confi gured with regard to number
of samples/ targets, fi tting the needs of the
individual experiment.
Another challenge in real-time PCR is the
development of assays with good perform-
ance. Especially when measuring the expres-
sion levels from multiple genes the design
of assays is extremely laborious. Important
criteria are PCR effi ciency 2.0 +/- 0.2, linear
dynamic range of at least three logs and
similar signal heights of amplifi cation curves.
Also important are R2 value of standard curve
between 0.99 and 1.00, high specifi city and
no side products, Cp <= 34 of highest cDNA
concentration and good shape of amplifi ca-
tion curve.
Highest convenience for users is offered
when assays are offered pre-formatted on
PCR-plates, provided that the validation
criteria listed above can be met. Logical
panels, based upon well described biological
pathways allow the measurement of expres-
sion of many relevant genes simultaneously,
thereby greatly reducing the effort in assay
development.
Ultimately, the combination of high
throughput (384- / 1536- well) platforms
with formatting of validated PCR assays of
the researchers choice on PCR plates will
make it easier to employ molecular methods
in pharmaceutical research.
ASK THE EXPERT
Extending molecular methods
Robertus van Miltenburg, MBA is
the Director of Marketing for qPCR and
Nucleic Acid Preparation Systems for
Roche Applied Science. Roche Applied
Science is a business area within the
Roche Diagnostics Division of Hoffmann-
La Roche. Roche Applied Science
develops and markets analytical tools and
systems for the life science industry.
“Innovative technologies have
been developed that allow real-time PCR
measurement in volumes well below
the µl range”
ROBERTUS VAN MILTENBURG
RocheDiagnostic.indd 118 8/4/09 13:46:47
NGP. What biomarkers are being used to
allow for drug development?
Philippe Goix. Biomarkers, are widely used
in virtually all therapeutic areas including;
Cardiovascular (e.g. Cardiac Troponin I),
CNS diseases (e.g. Amyloid βeta 40, 42),
Oncology (e.g. VEGF, Akt-1, PSA), Metabolic
Diseases (e.g. Insulin, GLP-1), and Infl amma-
tory Diseases (cytokines and chemokines).
Biomarkers serve a variety of different pur-
poses in support of pharmaceutical develop-
ment; a wide range of biomarkers are being
used in drug development covering nearly all
classifi cations of analytes, including proteins
and metabolites, genetic markers, DNA, RNA
and many others across a wide range of plat-
forms. For example, Singulex immunoassays
focus upon proteins such as cytokines, chem-
okines, growth factors, transcription factors,
and hormones, regulatory proteins such as
troponin and metabolites such as cAMP.
NGP. Why are biomarkers important for per-
sonalised healthcare?
PG. Biomarkers are used in personalised
healthcare as a diagnostic tool to identify pop-
ulations for stratifi cation and abnormalities in
individuals, to be better able to tell who can
benefi t from therapies and to track individual
disease progression. They are also used to
modify or switch therapies when one mode is
not successful, and also to maximise the utili-
sation of drugs e.g. to better enable drugs and
delivery modes to be cost effective.
NGP. How can they be used to measure dis-
ease progression?
PG. Many biomarkers can be used as pro-
gression monitors from normalcy. The pri-
mary logic is that there are baseline levels
of biomarkers that can be measured in indi-
vidual patients. By following the patient over
time, medical professionals would be able
to monitor the progression from any given
state, either healthy to sick or preferably sick
to healthy. It is hoped that the detection of
the disease arrives in time for a therapeutic
intervention.
Many biomarkers that are clinically relevant,
however, are diffi cult to monitor with given
technologies currently available (such as
lacking the necessary sensitivity to measure
the changes). By increasing assay sensitivity,
it is possible to observe the minute levels of
the analyte of interest. Thus, allowing for
observation of small incremental changes
(approximately 50-250 fg/mL) from a given
state providing the researcher or clinician
with vital data about the effi cacy of a given
drug or treatment regimen.
For example, Singulex has pioneered devel-
opment of a very sensitive troponin I assay.
With this assay it is possible to observe
very small changes in troponin. In placing
patients on a treadmill it is possible to ob-
serve a difference between resting states
and exercise states and determine those at
highest risk. Our work with rats verifi ed that
many of the same principals apply to animals
and troponin.
NGP. How can effi cacy and safety be suc-
cessfully balanced during drug discovery?
PG. By increasing sensitivity, the therapeutic
index can be optimised on both ends (safety
and effi cacy) to obtain the optimal amount
(least amount) of drug to have the greatest
effect. To accomplish this task requires a re-
producible and sensitive surrogate biomar-
ker. Knowing the stability of the analyte in
your population helps to provide a framework
or a relevant base from which to measure.
With this baseline of the biomarker/analyte
one can observe signifi cant changes beyond
baseline variation.
Surrogate biomarkers can track disease se-
verity and the effect of the drug to modify or
minimise the disease. Additionally, there are
specifi c markers that are indicative of toxic
effects and can be monitored in relation to
the effi cacy of dosage.
Philippe J. Goix is the President and
CEO of Singulex, Inc. Dr. Goix took the
position in 2004 to spearhead Singulex’s
commercial efforts in the life science and
diagnostic markets. Previously, he founded
Guava Technologies and was a senior
scientist at Sandia National Laboratories,
Stanford University, and CNRS France.
Biomarker use in drug development
120 www.ngpharma.eu.com
EXECUTIVE INTERVIEW
Singulex.indd 120 8/4/09 14:46:57
122 www.ngpharma.eu.com
The rising costs of bringing a
drug to market and the cost
pressure under which health-
care systems operate has cre-
ated an environment in which
the development of successful
drugs has become increasingly challenging.
In order to grow profitability, pharma must
focus on both reducing the costs of drug
development and on increasing the medical
value for segmented patient populations.
Flexible solutions are required to address
the needs of the drug discovery process and
support downstream clinical trials. Next gen-
eration sequencing, coupled with genomic
enrichment technologies, offer new technical
solutions for more efficient pharmaceutical
and diagnostic development.
The genomics revolutionGenetics play a large role in human
health and DNA sequencing has proven to
be an important tool in understanding the
genetic basis of disease. However, the cost
and resources needed for capillary (Sanger)
sequencing has limited the scope of genomic
analysis of disease. The next generation
sequencing era, marked by the commer-
cialisation of the Genome Sequencer System
from 454 Life Sciences in 2005, triggered a
fundamental change in the way researchers
approach personal genetic variation. Rather
than analysing a single sample at a coarse
level, the speed and throughput of next
generation sequencing systems enables
scientists to study hundreds of samples at
significant depth and quality.
With the introduction of genomic enrich-
ment technologies, such as Roche Nimble-
Gen’s Sequence Capture Array products, the
time and cost of sequencing has decreased
further, as it is now possible to capture and
sequence only the human genomic regions
of interest. These arrays target specific can-
didate gene or exon sets, the whole human
exome, and contiguous disease-associated
regions. The combination of 454 Sequencing
and NimbleGen Sequence Capture arrays has
created a paradigm shift for the analysis of
variants within genomic loci and megabase-
sized disease regions that play critical roles
in human health. The challenge now is to
rapidly and accurately apply these technolo-
gies to understand how disease-associated
genetic variation can ultimately lead to pow-
erful discoveries of new drug targets.
Accelerating discoveriesThese technologies enable innovative
approaches to develop novel therapies and
diagnostics, and are considered one tangible
pathway toward personalised healthcare.
Recent studies have used 454 Sequencing
alone or in combination with NimbleGen
Ushering in the era of personalised healthcare
Gerd Maass has worked for
Roche since 1997 in several global
programs in the field of cancer drug
research and development. From
2001-2006, he was responsible for
the management of the pharmaco-
diagnostic programs in cancer.
Between 2007 and July 2008,
Maass headed the research and
development activities of Roche
Applied Science. Effective August
1st, 2008, he was appointed as
President and CEO of Roche
NimbleGen, located in Madison,
Wisconsin.
Sequence Capture Arrays to uncover new in-
sights into the genetic basis of a wide range
of diseases, including the following:
Oncology: In a pivotal paper published
in Nature Methods in 2006, Thomas et al
demonstrated that 454 Sequencing could
be used to elucidate cancer tumour micro-
heterogeneity. The study identified two
minority EGFR populations at a frequency
of two percent and three percent of the total
EGFR, both of which were associated with
clinical resistance to EGFR inhibitor drugs.
In another study, the combination of 454 Se-
quencing and NimbleGen Sequence Capture
Arrays was used to analyse specific exons
in a lymphoma cancer cell line (Albert et al
Nature Methods, 2007). The study demon-
strated the effective capture of exons with
high coverage of the targets.
Viruses and infectious diseases: The
throughput of 454 Sequencing has allowed
researchers to deeply analyse viral popula-
tions and identify viral subtypes. Recently
Simen et al. ( Journal of Infectious Disease,
2009) used ultra-deep 454 Sequencing to
identify low-frequency drug-resistant HIV
variants in patient samples. The study found
that mutations present at the one percent
level are likely to lead to premature failure of
treatment. Identifying these rare viral muta-
tions may ultimately enable prescription of
a more effective drug regimen and sophis-
ticated surveillance, based on an infectious
agent’s genetic characteristics.
Autoimmune diseases: In another recent
study, Nejentsev et al (Science, 2009) outline
a path from genetic association to the iden-
tification of protective and causative alleles
for type 1 diabetes, marking a key step for the
development of clinical applications based
on previously identified molecular markers.
The clinical setting: While there is still tre-
mendous progress to be made toward the
dream of personalised healthcare, current
medical research demonstrates the power
of the next generation sequencing and ge-
nomic enrichment technologies to uncover
the genetic basis of human disease. n
ASK THE EXPERT
Roche NimbleGen.indd 122 8/4/09 13:49:59
The polymerase chain reaction (PCR)
has traditionally been optimised for
specificity and, to a lesser extent, prod-
uct yield. The speed with which the re-
action is completed has been of secondary
importance. The availability of software for
primer and PCR product design and the use of
reagents that can tolerate a range of reaction
conditions have allowed researchers to focus
on maximising throughput by minimising PCR
cycling times. Here we discuss the time savings
in fast PCR and fast quantitative PCR (qPCR)
that can be made by modifying thermal cycling
conditions and choosing appropriate enzymes
tailored for fast cycling.
Saving time during PCR andqPCR runs
Standard protocols for amplifying targets of
less than 1000 bp include several steps, each of
which can be modified to shorten overall run
times from about 90 minutes to less than 30
minutes.
Initial denaturation – When using an anti-
body-modified hot-start polymerase, both poly-
merase activation and initial denaturation can
be accomplished in 15-30 seconds at 98°C.
Denaturation while cycling – A one second
denaturation at 92°C is sufficient for various PCR
products. This is consistent with the observation
that temperatures above 92°C are unnecessary
for denaturing PCR products shorter than 500 bp
(Yap and McGee 1991).
Annealing and extension – Because most
polymerases are highly active in the tempera-
ture range typical for primer annealing (55-
70°C), the annealing and extension steps of a
PCR or qPCR protocol can often be consolidated
into a single shortened step. A 15 second com-
bined incubation can be sufficient for PCR prod-
ucts up to 500 bp. Furthermore, a combined
annealing and extension step at 60°C is typical
for qPCR assays using dye-based fluorescence
or dual-labelled probes.
Final extension – A post-PCR final incuba-
tion step of five to 10 minutes at 72°C is often
recommended to promote complete synthesis
of all PCR products, for visualisation on gels or
for cloning. We have found that this step can be
shortened to 30-60 sec for products up to 1 kb.
Number of cycles – Target DNA concentra-
tion is often unknown in PCR, and may be only a
few hundred copies per reaction. For this reason,
researchers usually prefer to run 30-45 cycles of
PCR despite the potential time savings of run-
ning fewer cycles.
Novel enzyme revolutionisesthermal cycling
Historically, PCR polymerases provided ei-
ther high fidelity or high processivity, but not
both. Now, using patented Sso7d fusion protein
technology, Bio-Rad has incorporated both
these parameters into a single enzyme: iProof*
high-fidelity DNA polymerase. This novel poly-
merase accurately amplifies a wide range of
DNA templates for use in various applications.
Sso7d gives polymerases a sliding grip on the
minor groove of the replicated DNA, dramatical-
ly increasing processivity without compromising
catalytic activity or enzyme stability. This tech-
nology improves speed, robustness, capacity of
synthesising longer products and tolerance of
PCR inhibitors.
In general, longer targets (above 1 kb) need
longer extension times, resulting in runs that can
last several hours. The extremely high proces-
sivity of iProof polymerase enables extension to
be completed more quickly with significantly
less enzyme than is required for other poly-
merases. Time savings of up to three-or-four fold
and increased reaction success have been ob-
tained with iProof DNA polymerase.
Sso7d fusion technology has also been in-
corporated into a supermix for use in fast real-
time qPCR – SsoFast EvaGreen supermix. The
unique combination of a fusion DNA polymerase
with EvaGreen dye and an optimised buffer sys-
tem delivers unrivalled speed and performance
for various qPCR applications, including high res-
olution melt analysis and direct PCR. This mix is
uniquely tolerant to PCR inhibitors, allowing qPCR
results to be obtained in less than 30 minutes.
We have described several ways to max-
imise the time savings in PCR and qPCR.
Portions of this article have been excerpted from
Fast PCR: Minimizing Run Times, Maximizing
Throughput, appearing in Volume 118 of Bio-
Rad’s periodical, BioRadiations. Please visit
www.bio-rad.com to download your copy of the
full-length article. n
Maximising throughput
124 www.ngpharma.eu.com
By Kamni Vijay
ASK THE EXPERT
* U.S. patent 6,627,424.
Yap EP and McGee JO (1991). Slide PCR: DNA amplification from cellsamples on microscopic glass slides. Nucleic Acids Res 19, 4924.
Kamni Vijay is Marketing Manager
for Genomics at Bio-Rad
Laboratories. She directs product
development in the areas of PCR,
qPCR and emerging technologies.
She began her career in the life
science industry at MJ Research after
completing her PhD from the
University of California, Davis in 2001.
BIORAD ATE:mar09 08/04/2009 13:35 Page 124
126 www.ngpharma.eu.com
Discerning whether the pharmaceutical supply chain
has been breached and investigating alleged cases is a
responsibility certainly not for the faint-hearted. Mick
Deats, Group Manager of Enforcement at the Medicines
and Healthcare products Regulatory Agency, is respon-
sible for sniffing out counterfeit medicines, and with many cases
becoming criminal investigations, it’s no easy task.
Through a recent series of advertisements screened in cinemas,
the MHRA, in conjunction with Pfizer and several patient associations,
aimed to raise awareness among the public of the risks of purchasing
counterfeit medicines. The World Health Organisation recently issued
statistics suggesting that up to 50 percent of medicines supplied from
websites that conceal their physical address are counterfeit.
The ad was aimed at persuading people not to buy drugs from
the internet or other dubious sources. The message was delivered
to the public through a very hard-hitting campaign –a man is seen to
cough up a rat, making reference to the fact that rat poison has been
found in the past in counterfeit medicines. As Deats explains, the ads
attracted a lot of interest. “We were pleased to see that hard-hitting
approach. It’s what was required. And when you look at other ad cam-
paigns that are trying to increase public awareness about risks, you
generally see that they have to be hard-hitting for you to remember
them, and this one certainly was. It was shown in cinemas to those 15
and above, which is our target audience.”
Vigilance is keyThe MHRA is a UK government agency responsible for ensuring
that medical devices and medicines work, and that they’re accept-
ably safe, which it does through a regime of licensing, inspection and
market surveillance. The agency is exceptionally vigilant and has an
intelligence group as its enforcement to tackle any allegations that
are made regarding medicine and the law.
“There are cases referred to us by members of the public, other
regulatory bodies, law enforcement, healthcare professionals, pa-
tients; there’s a whole range of ways that referrals are made into the
agency. In my particular unit, we receive around 1500 referrals a year,
which are assessed and a proportion of them will become criminal
investigations,” says Deats.
Discovery usually through reports to the agency, via members
of the public reporting suspicions, or reports from others working
within the supply chain. Onsite inspections have led to numerous
discoveries of counterfeit medicines, and once these have been
found, MHRA works quickly to protect public health by launching a
full and very detailed criminal investigation, with a view to prosecut-
ing those involved.
“We’ve run counterfeit hotlines here, and there are methods for
people reporting any suspicions through our website. We’ve seen
numbers rise due to people’s awareness increasing. We always en-
courage that. If people are suspicious about their medicines then it
can always be reported to us very easily from the front page of our
website or on the phone to a counterfeit hotline,” explains Deats.
Organisational structureThe MHRA is made up of 10 divisions, with approximately 900 staff;
45 of whom make up the enforcement group. Every European country
Pest control
COUNTERFEITS
How an image of a man coughing up a rat can help protecting the public and pharmaceutical companies against counterfeit drugs.
counterfeit-deats.indd 126 8/4/09 13:42:53
127www.ngpharma.eu.com
has a medicines agency, but the UK is quite unusual in terms of the
enforcement and intelligence group being substantially larger.
“Counterfeit medicines in Europe, but specifically in the UK, arrive
in two different ways. Firstly, and most commonly, it’s through unregu-
lated internet websites that could be hosted anywhere in the world,
who make their products available to any-
body in Europe or in the UK.
“The less common way of counterfeits
reaching patients is through the regulated
supply chain, and that’s through licensed
wholesalers and pharmacies. Fortunately,
that is a very rare occurrence, but never-
theless, since 2004, it’s led to nine recalls
of medicines here in the UK. There’s a high
degree of confidence in the medicines you
obtain from a pharmacy. So anything that
damages that confidence is a really bad
thing to occur,” he says.
The MHRA focuses much of its attention
on the counterfeits trafficked through inter-
net supply. However, with the internet being
completely open and continuing to expand,
this is no easy task, and the difficulty of
defining the lines of jurisdiction adds to the
already existing problems.
“If the websites are hosted in the UK
or the medicines are being supplied from
within the UK, that brings it within our juris-
diction, which we can investigate. If neces-
sary we can prosecute the case, which we
have done on a number of occasions. But
if the website is hosted elsewhere in the
world, then it’s not within our jurisdiction,
and so we pass that information to the rel-
evant authorities. It’s up to them as to what
action they take.
“It’s a challenging area. Our focus is
to give the public sufficient information to make an informed choice
as to whether it’s a good idea to be obtaining your medicines from
unregulated websites, which is why we’ve begun the advertising
campaigns.”
Legitimate leaksAnother increasingly worrying issue is the potential for counterfeit
medicines to infiltrate into legitimate supply chains. “We’ve seen it
happen in the past, where unlicensed traders or brokers are feeding
counterfeit medicine into people who are authorised to trade in medi-
cines in the supply chain. These traders have either been duped or
turned a blind eye, or are criminally involved and knowingly inserting
that into the supply chain for profit,” explains Deats.
“We tackle that type of thing firstly by taking steps to ensure that
the product is seized or quarantined and prevented from getting out
to market. However, if it has got out to market, that’s when we con-
sider issuing a recall notice and getting it back and getting it taken off
the shelves.”
How can companies protect themselves against fake drugs making
their way into the supply chain? Deats explains that most of the large
drug companies have security departments that are devoted to tack-
ling those people that are infringing
their intellectual property rights. This
often leads to an overlap between
intellectual property rights issues and
public health issues. However, the
MHRA does not function to protect
brands, but solely public health, unlike
pharmaceutical companies, who can
also seek to protect their brands.
This angle of brand protection ena-
bles prosecutions from investigations
to be carried out using a combina-
tion of medical, intellectual property
and money laundering legislation, to
ensure the courts have a full report of
the criminal activity with which to pass
the sentence.
“It allows the court to deal with
the case in an appropriate manner. The
maximum sentence under the medi-
cines act is two years in prison with
unlimited fine. The maximum sentence
under trademark legislation is 10 years,
and under money laundering it’s 14
years. So we don’t restrict ourselves
by purely dealing with them under the
medicines legislation.
“The European Commission and our
agency have just completed the public
consultation process on measures to
tighten the supply chain, and part of the
recommendations of this are the need
for specific criminal offenses to tackle counterfeit medicine, because
at the moment we rely on Medicines Act legislation. This doesn’t carry
the type of penalty that you need to deter people controlling multimil-
lion-euro organisations, importing medicine from the other side of the
world and infiltrating it into our supply chains.
“Obviously, we’re keen to get the message out about public
safety and the risks attached to obtaining your medicines from the
internet. We would always advise people to have a face-to-face con-
sultation with a healthcare professional and obtain their medicines
with a prescription.
“As far as the internet’s concerned, we’re very keen to get the mes-
sage out to the public because the internet wasn’t originally designed
to be regulated, and because of its global nature, it’s extremely dif-
ficult to deal with. The people that run these operations realise that it’s
a wise move on their behalf to host their websites in countries that are
difficult to do business with.” n
“Current legislation doesn’t carry the type of penalty you need to tackle people
dealing in multimillion-euro organisations, importing
medicine from the other side of the world and infiltrating it
into our supply chains”
counterfeit-deats.indd 127 8/4/09 13:42:55
In a recent publication, Maurel et al* pre-sented the combination of Cisbio’s HTRF
and Covalys’ SNAP-tag technologies to
specifically address cell-surface protein-pro-
tein interaction. In this study, an application
for GPCR oligomerisation is accurately docu-
mented and the advantages of this new ap-
proach presented.
Today, Cisbio introduces a comprehensive
reagent platform developed with this combi-
nation of technologies. This offer is based on
the expression of a fusion protein between the
external position of the 7-transmembranaire
fragment (7TM) and a SNAP-tag (20 kDa).
Streamlined for highly selective ligand binding
and receptor dimerisation assays, this rapid
and non-radioactive platform will meet needs
for a comprehensive investigation of receptor
network signalling, and will preserve the func-
tionality of the receptor and the intracellular
signalling pathway.
GPCRBeyond thewide variety of classes of GPCR
and drugs, signalling pathways induced by the
specific receptor ligand binding receptor are
ubiquitous. The GPCR signalling network is a
cascade of intracellular events that serve as
models for the development of functional tests.
It is admitted today that a proper understanding
of the drug action mechanisms and the activa-
tion of this signalosome requires the implemen-
tation of cell-based assays covering receptor
binding, second messenger accumulation, or
more downstream assays such asMAPK activa-
tion pathway, with the measurement of ERK
phosphorylation or desensitisationmechanisms
involving beta arrestin.
SNAP-tagSNAP- & CLIP-tags are fusion proteins de-
veloped by Covalys. Those tags can be consid-
ered as suicide enzymes that specifically and
covalently combine to their substrates, respec-
tively benzyl guanine andbenzyl cytosine. These
substrates can be derivatised with HTRF part-
ners such as terbium cryptate (Lumi4-Tb) and
green or red derivatised acceptors.
Once transfected into thecell, aplasmidcon-
struction developedwith the appropriate pSNAP
or pCLIP plasmid and the gene of the GPCR of
interest leads to expression of the GPCR as a
fusion protein with the SNAP- or CLIP-tag pro-
tein (Fig. 1).
In their study, Maurel et al describe the si-
multaneous dynamic localisation of het-
eromeric and homomeric receptors at the cell
membrane surface. As mentioned by the au-
thors, this new technology is an alternative to
existing bioluminescence resonance energy
transfer (BRET) and FRET assays. The combi-
nation of SNAP-tag and HTRF technology re-
sults in particular features sought for the study
of cell surface receptors.
In addition the tag-substrates developed
by Cisbio are non-permeant and therefore
specifically label cell surface proteins with the
appropriate HTRF-compatible fluorophore. In
fact, no fluorescence resonance energy transfer
(FRET) can occur within intracellular compart-
ments where proteins accumulate during GPCR
internalisation ormaturation process.
Finally, those substrates are chemically inert
for other proteins, avoidingnonspecific labelling
in themembrane labelling.
With this new HTRF-based cell-surface re-
ceptor platform, Cisbio provides reagents and
technology to address the latest evolution in
the GPCR drug discovery field. Applications to
highly selective and non-radioactive ligand
binding assays are described and the 7TM
dimerisation model can properly be investi-
gated with streamlined and specific cell-sur-
face tools. �
New HTRF cellular platform
128 www.ngpharma.eu.com
Jean-Luc Tardieu has been productmanager at Cisbio Bioassays in Bagnols-sur-Cèze, France, since joining thecompany in 2004. He earned his PhDfrom the Technology University ofCompiegne (UTC), France.
JEAN-LUCTARDIEU
pSNAP +1
Gene ofGPCRX
pSNAP-GPCRX
2
*Maurel et al, Nat. Methods 5, 561-567 (2008) Cell-surface protein-protein interaction analysis with time-resolved FRET and SNAP-tagtechnologies: application to GPCR oligomerisation.
ASK THE EXPERT
Reagents and technology to address the latest evolution in the GPCR drug discovery field.
Fig 1: Fusion of GPCR X with SNAP-tag in N-term position. The first step consists of creating aplasmidic construction encoding for both the receptor and the labelling tag. Then, thisconstruction is used to transfect the cell host.
Cisbio Bioassays ATE:13sept 8/4/09 13:41 Page 128
130 www.ngpharma.eu.com
A new PeT imAging AgenT
agent 64Cu-DOTA-bevacizumab is able to serve as the next genera-
tion of PET imaging agents in preclinical cancer drug research in the
following directions.
Tumour growth: The new imaging agent could help researchers detect
and observe the growth of tumours located at greater depth in the
body and offers better sensitivity and diagnostic imaging contrast.
Estimate tumour size: According to our results, bevacizumab imaging
offers clearer contours of the tumours than other probes. With
appropriate image analysis and experiment design, it could help
researchers estimate the size of tumours and further monitor the
therapeutic effect of certain treatments.
Observe angiogenesis-related events: The release of VEGF is strongly
related to angiogenesis. 64Cu-DOTA-bevacizumab can provide
information about distribution and change of VEGF at different time
points. Furthermore, this information can be used for evaluation of
the functional effect of other anti-angiogenesis drugs. Also, it can
tell the researcher which part of the tumour is actively undergoing
angiogenesis at a specific time point. VEGF is related to hypoxia and
inflammation as well. Therefore, this probe may be used to obtain
indirect indication of hypoxia and inflammation.
Evaluate other anti-cancer drug candidates: It could offer information
on the percentage of the total injection dose of bevacizumab
accumulated in a tumour and in other organs as a contrast. The
pharmacokinetics and distribution of bevacizumab in the tumour
could be revealed by dynamic PET imaging. The same imaging strategy
can be used to evaluate the pharmacokinetics and distribution of
other anti-cancer drug candidates, such as antibody, aptamer, siRNA,
hormone, peptide and oligonucleatide.
64Cu-DOTA-bevacizumab can be used as a
tumour diagnostic agent by PET imaging in pre-
clinical research on animal models. The radiola-
belled tracer as a new imaging agent is highly
sensitive in pancreatic, breast and lung cancer
animal models, and possibly in other types
of solid tumour animal models. The tumour-
tissue contrast and in vivo bio-distribution are
superior to the current clinical standard 18FDG
imaging in tumour animal models. n
For more information, please visit www.mpiresearch.com
INDUSTRY INSIGHT
A new imaging agent, 64Cu-DOTA-bevacizumab, has been developed for scanning of tumor growth and functional imaging of angiogenesis in animal tumor models.
The new agent gives a much clearer and more precise image
than existing methods (18FDG). This discovery has the poten-
tial to revolutionise preclinical cancer research and possibly
clinical practice of cancer diagnosis.
Tumour imaging New drug discovery generally spans 10 to 15 years. To develop
novel drugs more quickly and cost-effectively, many new technologies
have been used, including multi-modality imaging techniques. Posi-
tron emission tomography (PET) is a noninvasive imaging technique
that provides a means to obtain information about drug behaviour
and functional efficacy during drug development.
PET is used extensively in both preclinical research and clinical
practice of cancer diagnosis and therapy. In the past two decades,
hundreds of articles have been published on cancer drug development
in the field of therapeutic PET imaging of cancer patients and preclini-
cal cancer research on tumor animal models. The articles focus mainly
on the gold-standard imaging agent 18FDG (fluoro-18-deoxy-glucose),
which monitors the metabolic functional change of tumours. In recent
years, tumour angiogenesis imaging has drawn a lot of attention to
anti-angiogenic drug development.
Angiogenesis is a fundamental process in which a growing tumour
creates its own blood supply by forming new blood vessels around
tumour tissue. Bevacizumab is an antibody that targets vascular
endothelial growth factor (VEGF), a signalling protein released by
tumour cells, and plays an important role in angiogenesis. VEGF-relat-
ed angiogenesis is a nearly universal phenomenon for most types of
solid tumors. Currently, bevacizumab is being used to treat patients
with advanced colorectal cancer and is being tested in several other
metastatic cancers.
Based on our preliminary imaging results, the new imaging
Zheng ‘Jim’ wang has more than 12 years of experience in molecular imaging research and nuclear medicine. He was an assistant professor at the University of Texas Health Science Center at San Antonio and is currently the Director of Molecular Imaging at MPI Research.
Thepharmaceuticalmarket is changing fast
and industry has been required to move
quickly to keep pacewith this dynamic sit-
uation. There is, however, a lot of work still to be
done, with only 30-60 percent of common drug
therapies being successful and up to seven per-
cent of hospital admissions in the US due to ad-
versedrugreactions,manyfatal.Thetrialanderror
approach applied to drug treatments is no longer
aviableoption for the industry, formedicalpracti-
tioners, for healthcare payors or for patients.
Biochip array technology (BAT) now offers rapid
genetic screening in amultiplex array, to facilitate
thedrive towardspersonalisedhealthcare.
One of the key breakthroughs in the post-
genomic era is the realisation that small genetic
changes can greatly increase an individual’s risk
of developing disease, or can influence their re-
sponse to therapy. This has led to the rapidly ex-
pandingfieldof pharmacogenetics. All themajor
pharmaceutical companies are now conducting
research in this exciting arena and are applying
this to all facets of their work, from drug discov-
ery to companion diagnostics.
This is reflected in the increase in thenumber
of submissions to the Food and Drug
Administration (FDA)andtheEuropeanMedicines
Agency(EMEA) involvingpharmacogenetics.There
areanincreasingnumberofapproveddrugsonthe
market, including tamoxifen, warfarin and 5-fluo-
rouracil, which strongly recommend companion
geneticprofilingtestsbefore treatment. It isenvis-
aged (and included in FDA guidelines) that phar-
macogeneticswill becomeastandardcomponent
in drug development in the near future.
Pharmacogenetics testing is currently ap-
plied to preclinical investigations of biomarkers
for drug response or drug-induced toxicity, in-
cluding identifying genes with variations that
may identify sub-populations. It is being applied
to phase I studies to explain outliers or inter-pa-
tient variability, to stratify patients into response
groups andphase II and III studies to exclude in-
dividuals at risk. This allows the development of
drugs for specific patient groups with differing
clinical genetic profiles.Where newpathways or
metabolic influences are discovered, itmay lead
to the re-investigation of previously faileddrugs,
if a genetic influence can be established. This
will identify niche therapies, adding value to the
pharmaceutical back catalogue.
Conversely, poorly metabolised drugs may
notbenefit thepatient in themanner requiredand
accumulate to toxic levels, leading to an adverse
patient reaction.Determiningthegeneticprofileof
theenzymesknowntoinfluencemetabolism,such
as the CYP450 gene family, can, in combination
withtraditional indicators,suchasage,weightand
disease severity, facilitate the correct dose of the
rightdrug thatmost suits theneedsof the individ-
ualpatient.This is the foundation for trulyperson-
alisedmedicineandiswherescreening forSNPs in
CYP450 genes canmake a profound difference to
clinical treatment and prognosis.
Genetic testing can follow threemain path-
ways; predisposition screening, early detection
throughpopulation screening andpharmacoge-
netics, with dual-purpose markers. An example
of how Randox BAT can provide a combined ap-
proach for clinical solutions is the diagnosis and
treatment of colorectal cancer (CRC).
RanplexCRC is a mutation detection assay,
utilising biochip array technology (BAT) that can
detect CRC at a pre-malignant stage, enabling
rapid and effective treatment regimes. This fae-
cal DNAmultiplex assay looks for 28 mutations
in four genes known to be associated with CRC
(APC, KRAS,BRAF andTP53). Detectionof anyof
these mutations will indicate the presence of a
pre-malignant ormalignant lesion in over 70per-
cent of CRCs. KRAS mutations may also deter-
mine whether the patient will respond to
anti-EGFR therapy, a treatment commonly given
toCRCpatients.MutatedKRASgeneshavebeen
found in 40 percent of metastatic CRC, so this
percentage of patients may receive anti-EGFR
therapy unnecessarily, unless a primary screen
has been conducted.
Utilising Randox’s award-winning biochip
array technology,weareworking closelywith in-
dustry experts to develop custom SNP arrays,
both for predisposition screening and drug me-
tabolismprofiling. Randox provide protein, DNA
andRNAdiagnostic solutionswith clinical levels
of evidence onplatforms that can accommodate
basic research (investigator), high throughput
clinical screening (evidence) andnear-patient di-
agnosis (multistat). Thewell-established princi-
ples of the assay and test platforms ensure a
rapid development time, so assays can quickly
be customised to suit the needs of pharmaceu-
tical testing or service laboratories. �
A revolution in personalised medicine
132 www.ngpharma.eu.com
How biochip array technology is transforming pharmacogenetics.
INDUSTRY INSIGHT
Martin Crockard is a molecular
biologist with a role in both R&D and
business development at Randox.
Research interests include the
development of prognostic expression
arrays for breast and ovarian cancer
and SNP profiling for predisposition
and companion screening for cardiac
diseases and cancers.
For more information, please contact [email protected] orvisit www.randox.com.
“Small genetic changes cangreatly increase an individual’srisk of developing disease”
Randox ed:13sept 8/4/09 14:44 Page 132
With only 18 NCEs approved in 2007,
and an average cost of developing a
single NCE now exceeding $1 billion,
the pharma R&D model is arguably unsustain-
able in its current form. In comparing the pro-
ductivity of the industry over the last several
decades it is useful to consider the evolvingdrug
discovery paradigm during this period. Within
the last 20 years the drug discovery paradigm
has increasingly embraced a central dogma for
discovery that is recognised today as ‘target-
basedmedicinal chemistry’.
Central to this paradigmare thewell-recog-
nised and structured stages of early drug dis-
covery, including target identification, high
throughput screening, and lead optimisation
efforts. Prior to this period, the industry dis-
covery paradigm was not as well organised
and much more subject to serendipity.
Contrary to widely held expectations, themod-
ern paradigm has delivered the lowest rate of
new drug approvals in a generation.
It is important to note that target-based
drugdiscovery is a hypothesis-based approach.
These hypotheses have their origins in an exist-
ing collective knowledgebase thatwemust now
accept is incomplete. Although the post-
genomics era heralded thediscovery of a pletho-
ra of ‘new’ molecular targets, there remains a
very poor understanding of the spectrum of bi-
ology influenced by any given target. For any
given protein receptor, for example, our under-
standing of the biochemical pathways does not
begin to describe the complex interactions in
that pathway that may be biologically relevant,
neither is there a complete appreciation of the
putative target’s influence on intersecting path-
ways. This statement is certainly true in a simple
cell-based system, yet the complexity of these
interactions rises exponentially when we con-
sider a fully assembled organism.
In a pharmaceutical R&D environment this
biological complexity, and associated incom-
plete knowledge, manifests itself in the high
attrition rates associated with drug develop-
ment. It further reveals itself in the form of un-
expected beneficial effects such as the
analgesic properties of the gabapentinoids in
neuropathic pain and the many pleiotropic ef-
fects of the statins.
Melior Discovery proposes that, in consid-
eration of the limitationsof the current industry’s
central dogma, the existing pharma discovery
paradigm needs to be supplemented with a
complementary strategy that offers the poten-
tial tomore rapidly and efficiently identify alter-
native beneficial activities. Given the apparent
limitations of target-baseddrugdiscovery, there
is a compelling rationale for an approach that is
not constrained by the aforementioned knowl-
edge gaps.
Melior Discovery has developed a platform
for the optimal phenotypic screening of large
numbers of compounds. TheraTRACE is com-
prisedof approximately 40animalmodels of dis-
ease representing a very broad therapeutic area
spectrum. Normally, the proposition of screen-
ing a compoundacross 40 sophisticated animal
modelswould bedeemed impractical. However,
the company has succeeded in making the
largely impossible, possible by developing a
means to ‘multiplex’animalmodelwithout com-
promising the quality of the underlyingmodels.
By taking therapeutic candidates and system-
atically screening them across 40 models of
disease, Melior has adopted a form of non-hy-
pothesis-driven drug discovery. Only in this
way is it possible to uncover otherwise truly
unpredicted biology associated with a com-
pound. Further, by screening in clinically rele-
vant preclinical models of disease, this
approach uncovers the most salient unpre-
dicted biology as opposed to generating less
useful phenomenology.
Very often, the unexpected biology is of
therapeutic relevance andhas been the basis of
Melior’s drug repositioning efforts. Indeed, in a
relatively short time, the company has built its
own pipeline of therapeutic candidates reposi-
tioned from a library of drug candidates previ-
ously developed for other indications.
Increasingly, pharmaceutical companies are
adopting this approach and partnering with
Melior in order to profile discontinued com-
pounds aswell as preclinical candidates in order
to fully explore the pharmacological fingerprint
of compounds destined to enter the clinic. �
A new model for drug discovery
134 www.ngpharma.eu.com
The productivity crisis in pharmaceutical drug discovery, or ‘innovation gap’ as it has been coined,is well recognised and the subject of much debate in the industry and spectator commentary.
INDUSTRY INSIGHT
Andrew Reaume, is President and
CEO of Melior Discovery, Inc.,
which he co-founded in 2005 with
Michael Saporito. Prior to Melior,
Reaume held positions of
increasing responsibility at Pfizer
Global Research and Development.
Reaume received a PhD in
genetics from the University of
Connecticut and an MBA with
honours from the Wharton School.
“The existing pharmadiscovery paradigm needsto be supplemented with acomplementary strategy”
Melior Discovery :13sept 8/4/09 13:56 Page 134
As we continue stumbling through
times of uncertainty and despon-
dency, the call for transparency and
accountability has been height-
ened throughout society, from
politicians who don’t pay their taxes, to over-the-
top executive bonuses. The same is true for the
coordination of marketing in the pharmaceuti-
cal industry, as the power of patient desire for in-
formation is determining the way in which
pharmaceutical companies operate.
“Patients have become much more aware
of and assertive in finding information about
their disease and their treatment options,” says
Isabelle Mercier, VP of Marketing at Millennium.
“What’s changing, from a marketing perspec-
tive, is the way in which we provide additional in-
formation and insights to the patients, allowing
them to become more informed and educated
about their treatment options.
“From a marketing perspective, we have to be
prepared to engage them differently: traditionally
it’s been more the healthcare team being the con-
duit of information to the patient, but increasingly
you hear of the patient coming in with printouts
from the internet, with information they heard on
the radio or saw on TV, demanding more from their
healthcare team. We as a pharmaceutical compa-
ny have an opportunity to play a role in educating
patients, which is probably the most striking
change in the pharmaceutical marketing.”
More responsibilityPharmaceutical companies are now facing
the responsibility of providing patients with
treatment information and must take on a
more informative role than they have previ-
ously. “The most relevant trend is that of de-
mand for full disclosure of information, which
is becoming more stringent. That full disclo-
sure is an opportunity for the pharmaceutical
company to enhance the understanding of the
treatment options and/or the particular ther-
apeutic option that the pharmaceutical com-
pany has to offer,” says Mercier. A greater role
of responsibility, if seized upon with an oppor-
tunistic approach, can allow for pharmaceuti-
cal companies to approach healthcare with an
element of creativity as it provides more valu-
able and insightful information.
In her new role as Vice President of
Marketing, Mercier will be leading and develop-
ing the US and global marketing strategy for the
commercialisation of late phase development
products, along with oncology market products.
“Millennium is specific to oncology and has a vi-
sion of developing and delivering first class ther-
apeutic agents, aiming to offer more patients
across the globe new innovative therapeutic
agents to advance cancer care.
“When you look at the portfolio of pipeline
agents, the late phase products, as well as cur-
rently marketed products, are either best or first
in class, which speaks volumes to the engage-
ment that Millennium has. This is done from a
scientific perspective of understanding the spe-
cific mechanisms that lead to cancer genesis
and targeting the ones that are the most rele-
vant to counter that cancer development, pro-
viding that option to offer more patients
treatment across the world.” It is global visions
such as this that provide the company with its
methods for branding.
Millennium’s approach to branding is very
different to that of other pharmaceutical com-
panies. As their entire focus is cancer care, the
link between the product and the company vi-
sion is inherent. “Due to the fact that we are
solely focused on cancer care and interested in
serving the patient with high level science ther-
apeutic options, that potential conflict between
corporate branding and actual therapeutic
agents is not an issue here at Millennium, which
136 www.ngpharma.eu.com
Patient powerMillennium’s Isabelle Mercier tells NGP about therising power of patient influence and marketing’sdelivery of information demand.
MARKETING
“Patients have become much moreassertive in finding information about their
disease and their treatment options”
MERCIER:apr09 08/04/2009 13:47 Page 136
it makes it a unique organisation from that per-
spective,” says Mercier.
“If you think of the larger pharmaceutical
companies, the struggle they always find them-
selves facing is due to them not focusing on a sin-
gle therapeutic area: on a single disease, or
disease state. Since every cancer is different from
each other, they do face an identity barrier be-
tween the therapeutic options they offer and their
organisation as a whole. As a specific oncology
company, Millennium is a therapeutic agent en-
tirely dedicated to advancing cancer care, and
therefore we avoid that identity barrier.”
Strategic decisionsAs a company that has demonstrated how
to successfully build a corporate brand, Mercier
advises that it is the strategic decisions the com-
pany has made that allowed them to success-
fully project a specific image. “Branding is a
question of what the company wants to be
known for. We want to be known for having the
ability to take high-level science and transform
it into therapeutic options for patients, and we
have already demonstrated this through cur-
rently marketed products, such as the delivery
of Velcade. So the concept of bringing science
from the bench to the clinic is something that’s
very familiar to us.
“Other organisations tend to identify them-
selves more as pharmaceutical companies and
do not necessarily have that sort of predefined
identify of being a pharmaceutical company that
is known for its science. We have transitioned al-
ready from that perspective because we are fo-
cusing on cancer care and stated this by naming
ourselves as Millennium, the Takeda Oncology
Company,” says Mercier.
As Mercier explains, the development of
marketing strategies is not about to change in a
dramatic way, both for the industry and
Millennium itself. “Understanding to a greater
extent your customers, understanding their
needs, their wish lists, and designing and as-
sessing how you can address those needs and
wishes is what is subject to change.
Specialised approach“What will evolve is the development of per-
sonalised medicine, especially in cancer care.
It’s a significant trend, so from a pharmaceuti-
cal company perspective our need is to be laser-
focused on the disease, on the customer and on
the patient, and the positioning of a brand will
need to be there to address those needs. We’re
going to take even more of a specialised, cus-
tomised approach, just like medicine is evolving
in that direction.
“A specialised approach is going to involve
targeting specific diseases with specific charac-
teristics, avoiding the over-treating of patients
that probably would not benefit from the thera-
py, and instead providing maximum benefit with
balancing the risk associated with any thera-
peutication for a better defined group of pa-
tients and/or diseases that your therapy might
be best suited for.”
Such marketing techniques of specialised
products and focusing on the development of per-
sonalised medicines have certainly benefited
Millennium’s branding, as it continues to align its
strategies on cancer care. “This is a tremendous
opportunity for Millennium to be part of the trans-
forming of cancer care into a chronic disease. The
evolution of cancer survivals have made great
strides in the past ten years; there’s a lot more to
be done and certainly we are very much engaged
in being part of making that happen and serving
the patients.” n
137www.ngpharma.eu.com
Millennium Pharmaceuticals, Inc., was established in 1993 as a genomics
company applying world-class recombinant technology to the discovery and
development of innovative new therapies in a broad spectrum of diseases.
Millennium has since grown into a fully integrated biopharmaceutical company
with a pipeline of investigational drug candidates, as well as a commercialised
medicine derived from Nobel Prize-winning science that is now approved in more
than 87 countries worldwide.
In 2005, the company's leadership changed as Founder Mark Levin turned the
helm over to Deborah Dunsire. For the next several years, significant refocusing
and reconfiguration took place within the company, as well as improvements in
the scale and strength of its commercial operations.
In May 2008, Millennium was acquired by Takeda Pharmaceutical Company
Limited. Takeda is the largest pharmaceutical company in Japan, and a global
enterprise with an important presence in key markets.
Millennium now operates as an independent subsidiary, serving as the global
center of excellence in oncology under its new name: Millennium: The Takeda
Oncology Company.
MILLENNIUM HISTORY
MERCIER:apr09 08/04/2009 13:47 Page 137
138 www.ngpharma.eu.com
The role of the payor in determining treatment paradigms for pa-
tients is growing globally. ‘Payors’ are those who manage the
cost of healthcare, and they are under increasing pressure to
balance the budgets in the long and short term. Their decisions are
therefore infl uenced by a range of health economic arguments, which
presents a more complex perspective of the cost: benefi t ratio.
In the US healthcare system, the managed care marketplace rep-
resents a key payor sector that wields a signifi cant level of clout in
the healthcare landscape and has changed the dynamic between care
organisations and pharmaceutical suppliers. As the impact of man-
aged care’s growth continues to unfold, questions about how phar-
maceutical companies approach and sell to this channel have become
increasingly important to drug companies’ bottom lines.
This phenomenon is not new however. For years, drug companies
around the world have struggled with exactly how best to approach
payor audiences. With sustained pressure to moderate healthcare
costs, payors, particularly those that manage large populations,
remain a critical audience, if for no other reason than the potential
for volume selling. For many drug makers, however, a number of fac-
tors are contributing to the unstable nature of selling to such groups.
In the US, these factors include the second year of Medicare Part D
programs, rapid generic substitution rates and possible increased
political pressure from the change of political control within the US
Congress.
In the UK, with a 60-year history as the world’s largest nation-
alised healthcare system, the NHS provides a full-scale example of
the reliance of payors on robust data and information when making
decisions about access to drugs. The National Institute for Health and
Clinical Excellence (NICE) determines what drugs will be funded by
the NHS based on the same safety and effi cacy information used by
national health systems around the world, but with additional require-
ments to prove cost-effectiveness.
NICE guidance has indisputable power in determining which
treatments the NHS ultimately includes in the formulary. Pharma
companies selling to managed care organisations in the US and other
payor groups across the globe will increasingly have to use similar
standards of evidence. They must then ensure that their sales forces
are equipped to succeed within a complex environment with multiple
stakeholders, potentially with different roles being applied across the
life cycle of a product.
As payors gain increasing power over access to medicines, Justin van Gennep examines their particular priorities and explores how to address their needs for the benefi t of the patient.
KNOCKING ON A DIFFICULT DOOR
INDUSTRY INSIGHT
Innovex.indd 138 8/4/09 13:58:31
139www.ngpharma.eu.com
Justin van Gennep, serves as Senior Vice President and Head of Innovex for Europe, Middle East and Africa. He joined Quintiles/Innovex in 1998 as Managing Director for Innovex and Quintiles in Germany and possesses more than 25 years of experience as a business leader in the pharmaceutical industry.
A complex environment The increased presence of organisations charged with ‘gate
keeping’ access to care is an example of the more complex selling
environment that pharmaceutical sales reps can face. To make their
decisions, payors are now demanding more robust information from
pharma, including data on the long-term cost impact of medicines and
treatments, which highlight the health and cost benefits over the long
term, rather than just considering the unit cost.
Also, evidence of disease prevention is being used, such as the
prevention of co-morbidities in chronic diseases (diabetes, cardiovas-
cular disease and obesity), and real-world data to support the safe and
effective use of pharma products across the general population. Payors
are also using ongoing product value demonstrations, so that following
initial pricing approval, many regional and local payors will look for data
to support continued availability of products on formulary.
The need for value Healthcare providers and payors are thus focusing increasingly
on value and health outcomes, preferring to fund and prescribe medi-
cines that are supported by a wealth of ‘real-life’ data. As a result, the
pharmaceutical industry must ensure its offerings are closely aligned
with these desires and needs; in short, to help gatekeepers allocate
resources equitably and efficiently.
In Spain for example, it is a requirement of regulators that pharma
companies prove the favourable economic profile of new drug treat-
ments. In addition, they must deal with autonomous regional health
authorities and it is therefore essential that they establish solid and
transparent alliances with these regional governments and back up
their claims with real data obtained with clinical practice.
Safety and efficacy data that support new entrants into established
product classes will need to be not only stronger, but more comprehen-
sive – requiring developers to collate real-world patient information for
regulators on a continual basis. The influence over prescribing deci-
sions of proven outcomes and established tolerability is set to surpass
even the industry’s most powerful branding activities.
Health technology assessment too is developing, placing greater
emphasis on the broader value contribution that a medicine makes
to healthcare and society (i.e. evaluating its budgetary impact over
the longer term and taking into account the benefits supplementary to
direct treatment, such as reducing hospital admissions and prevent-
ing exacerbations).
In the UK, NICE is consulting over its future expansion – in size
as well as in scope, giving more weight to a medicine’s broader value
contribution. Many health authorities are looking to what is happen-
ing in the UK as they do develop methods of controlling and managing
healthcare.
Key to success The key to successful pharmaceutical sales within the payor
market is in the ability to offer something more than a volume dis-
count on the product itself. Because pharmacy directors and medical
directors often are responsible for both clinical and fiduciary respon-
sibilities, pharmaceutical sales representatives increasingly seek new
ways to bring additional value to the table. Of course, this requires a
team of people who have good understanding of the market and the
considerations that are important to payors.
For pharmaceutical sales organisations, the issue comes down in
large part to the complex mechanisms used to determine the ultimate
relationship between physician, payor, patient and product. For a
pharmaceutical manufacturer, the ability to place a product in the first
or second line of a payor’s formulary can mean the sales equivalent of
life or death. However, in order to achieve this placement, a broader
focus and more seasoned sales experience is usually required.
In some parts of Europe, payors are looking into new pricing
strategies such as pay for performance or risk-sharing. In both cases,
pharmaceutical companies will need to prove – in real-world scenarios
– that their drug or treatment works effectively and efficiently, either
to get a better price for the product or to continue to be listed on
the formulary. Patient-centric programmes can be designed to both
support the delivery of such information and help to better manage
chronic diseases by identifying patients and treating risk factors
early. Such programmes, managed by an independent organisation
such as Innovex, can also provide the all-important real-world clinical
data that – owing to strict regulations governing their relations with
patients – pharma cannot collect on its own.
One example that can be used is in diabetes: programmes de-
signed to identify uncontrolled diabetes patients can provide clear
benefits to all. Patients benefit from improved understanding of the
disease and its treatment, increasing therapy adherence and improv-
ing quality of life. Physicians gain improvements in their relationships
with patients, better health outcomes for their patients, and a better
understanding for practice staff in how to run patient identification
programmes in the future. For payors, the benefit is in preventing the
cost burden of treating co-morbidities associated with uncontrolled
patients, whose symptoms are inevitably worse, and treatment there-
fore more expensive, when left undiagnosed or untreated.
With payors becoming such a significant stakeholder in determin-
ing what drugs patients can access, and their increasing reliance on
data and real-life evidence in decision-making, the sales process for
these organisations requires a more consultative sell. It is essential to
have good understanding of and the ability to respond to the unique
and complex concerns of payors to be successful in this new era of
pharmaceutical sales. n
Innovex.indd 139 8/4/09 13:58:33
141www.ngpharma.eu.com
A term first used by former US Sena-
tor Lloyd Bentsen, astroturfing has
come to be known as the imitating
or faking of popular opinion or be-
haviour. Within the pharmaceutical industry,
it is the name given to the behind-the-scenes
funding of prominent patient representative
groups by some pharmaceutical companies.
Such close-knit relationships between
drug companies and patient groups throws
the integrity of both parties into question.
But should the drug firms bear the brunt of all
the negative press, or should patient groups
be dealt just as much responsibility for ac-
cepting their funding?
There are very few patient groups that
are transparent about funding: how much
they get and how they arrived at that figure.
Non-profit organisations are not required by
law to outline the sources of their funding or
how much they may be storing in their kitties.
It’s only through careful examination of tax
returns and annual reports that detailed fig-
ures can be arrived at.
As representatives of those affected by
certain diseases, the function of patient groups
is to offer support to the public, with the pa-
tients as their primary concern, campaigning
for treatments and sitting on advisory commit-
tees. Although some patient groups are large
and powerful, many are small and are subject
to the financial and lobbying restrictions. For
those with little or no lobbying power and only
a small membership in tow, there is a perhaps
understandable temptation to accept the read-
ily available funds from pharma companies
to help fund their activities and prolong their
existence.
And why shouldn’t the drug companies
seize upon these opportunities? They are look-
ing to make a profit like any other business; their
stock price will always be among their primary
concerns. By filtering their marketing message
into patient groups, drug firms can reach the
public in a very effective way. The problem
with this being that so many people place their
trust in the groups they believe are represent-
ing them, and have limited awareness that a
group’s agendas and actions may be influenced
by its ties to a pharmaceutical company.
The timing of the donations is often care-
fully planned by the drug companies to coincide
with their marketing strategies. For example,
Pfizer was a major fund provider to the Restless
Leg Syndrome Foundation in 2003 and 2004.
However, after the company announced plans
to stop manufacturing its candidate RLS drug
in July 2004, all donations to the patient group
stopped.
InfluenceA study undertaken by the New Scien-
tist magazine in 2007 to investigate the
extent of influence by drug firms on patient
groups attempted to find out exactly how
many dollars were being used to buy mar-
keting power. In certain cases, the donation
funds were huge; the American Heart As-
sociation, for example, was found to have
received more than $23 million (17€ million)
from drug companies, and the study found
that in total, seven groups received more
than 20 percent of their funding from drug
firms.
Are the drug companies really all to
blame for astroturfing? Just as the funding
provides the pharma firms with influence,
it also brings significant benefits for the
patient groups. Some groups argue that
without the funding, they would be unable
to operate, and with the additional funds
they are able to serve more patients than if
they excluded drug firms altogether.
However, many critics claim that even if
the level of transparency of a patient group
is extremely high, it still loses its claim to
objectivity and cannot properly represent
its patient group if it receives funding from
a specific group, pharma or not.n
The grass is always greenerHow pharmaceutical companies influence patient groups to create a grassroots demand for their products. By Natalie Brandweiner
“The timing of the donations is often
carefully planned by the drug companies
to coincide with their marketing strategies”
COMMENT
Astroturfing.indd 141 8/4/09 13:45:34
142 www.ngpharma.eu.com
Frost & Sullivan’s Growth Team
Membership recently completed its 2008
marketing priorities survey. Marketing ex-
ecutives in North America and the
European Union were asked to identify the most
pressing challenges facing the marketing function
for 2009. The results were as reported by director-
level or above executives from companies with
revenue of $100 million/€70 million or more.
Frost & Sullivan conducted the survey to
better understand the business environment
factors and the key issues facing marketing ex-
ecutives in 2009.
Current impactRespondents were asked to select the top
two environmental factors. The top business en-
vironment factors were the global economic
downturn (54 percent) and the increasing need
for product/service innovation (10 percent). The
secondary business environment factors were
MARKETING
Times are tough for marketers everywhere, and no less so in the pharmaceutical sector.But take heart – the latest marketing priorities survey from Frost & Sullivan shows thatmarketers are not giving up the fight.
decreasing customer demand (20 percent) and
intensifying competition (17 percent).
In response to how the business environ-
ment factors are impacting marketing, the top
three ranked factors were judged to have a neg-
ative impact – global economic downturn (80
percent), intensifying competition(70 percent),
and decreasing customer demand (80 percent).
The survey contained 12 questions broken
out into three sections: company demographics;
business environment; and key marketing issues.
Company demographicsThe majority of North American respondents
(70 percent) work for public companies and more
than 90 percent operate in a business-to-
business (B2B) environment. Sixty percent work
for firms with revenues higher than $1 billion.
Conversely, 55 percent of EU respondents
are from private companies and 98 percent of
the EU work in B2B companies. Fifty-seven per-
Downout
MARKETING FUNCTIONEFFECTIVENESS
GOOD65%FAIR
29%
EXCEPTIONAL4%
POOR2%
OTHER6%
but not
MARKETING:apr09 08/04/2009 13:45 Page 142
143www.ngpharma.eu.com
cent of respondents report working for compa-
nies with revenues higher than €700 million.
The healthcare and life sciences (20 per-
cent), and information and communication tech-
nologies (18 percent) industries had the largest
participation.
When asked about the effectiveness of their
marketing function, only three percent of North
American and four percent of EU respondents
rated it as ‘exceptional’. Sixty-one percent of
North American peers rated their effectiveness as
‘good’, and almost 30 percent rated it ‘fair’ or
‘poor’. Forty-five percent of EU marketers rated
their effectiveness as ‘good’ and 51 percent con-
sider it ‘fair’ or ‘poor’.
ChallengesIn both North America and the European
Union, the survey data highlighted the negative na-
ture of the business environment and its effects on
customer demand and competition (see Table 1).
While there is some variation in the key is-
sues shaping marketers’ decision making in
North America and the EU, there are many
shared challenges. Accordingly, marketing has
to justify its expenditures yet create new sources
of growth for the company (see Table 2).
Respondents were asked to identify whether
their top three issues were primarily an issue of
“staff, technology, or process.” Overwhelmingly
in North America, respondents identified
‘process’ at the crux of their top three issues. In
the EU, ‘process’ and ‘talent’ were identified as
the main factors.
Going forwardThe global economic downturn is having the
biggest impact on marketing decisions. Marketers
have to justify their budgets as companies
squeeze spending in light of falling customer de-
mand. At the same time, marketing is under pres-
sure to spur growth opportunities whether
through finding new markets or developing inno-
vative products and services. This pressure will be
telling as many respondents feel the effectiveness
of their function could be improved.
As expected, the data highlights the nega-
tive nature of the economy and its effects on cus-
tomer demand and competition. However, this
recessionary environment also provides new
growth opportunities in emerging markets, de-
mand for enhanced products and services, and in-
novation in green and sustainable offerings.
The top five key issues are focused on mon-
itoring and justifying expenditures or creating
new sources of revenue. The data highlights that
although budgets are being scrutinized, mar-
keting continues to be charged with catalyz-
ing growth through identifying unmet cus-
tomer needs, or speeding up innovation.n
TABLE 2 KEY MARKETING ISSUESISSUE NORTH AMERICA EUROPEAN UNION
Measuring market spend effectiveness and efficiency 30% 16%
Identifying emerging customer needs and preferences 30% 21%
Justifying the ROI on marketing budgets 28% 29%
Enhancing the pace of new product and 25% 24%
service introductions
Identifying new, adjacent market opportunities 23% 24%
Evaluating and prioritising innovation investments 18% 29%
Improving sales and marketing integration 18% 26%
TABLE 1 TOP FIVE BUSINESS ENVIRONMENT FACTORS
FACTOR NORTH AMERICA EUROPEAN UNION
Global economic downturn 64% 47%
Decreasing customer demand 24% 19%
Intensifying competition 21% 17%
Emerging global markets 17% 11%
Increasing need for product/ 14% 28%
service innovation
0
10%
20%
30%
40%
50%
60%
TOP SIX PRIMARY BUSINESS ENVIRONMENT FACTORS
As can be expected in these turbulent times, theforemost business environment factor is theglobal economic downturn (54%). This is alsoreflected in the second business factor, theincreasing need for product/service innovation tocapture and retain market share.
Globaleconomicdownturn
Product/service
innovation
Green/sustainabilityinitiatives
Emergingglobalmarkets
Intensifyingcompetition
Corporaterestructuring
54%
10%
5% 5% 5% 5%
The research for the survey was carried out by Holly Lyke Ho-Gland, Donald Savant and Keith P. O’Brien.
MARKETING:apr09 08/04/2009 13:45 Page 143
pharmaceutical companies, creating both win-
ners and losers. In the UK, the Primary Care
Trusts now have power over how prescribing is
done in each region. And in the US, managed
care programmes and the increasing burden of
healthcare are influencing treatment decisions.
Consequently, there’s an urgent need for com-
panies to make changes to their commercial
models in thesemarkets.
In themiddle tier, there aremarkets that can
bedescribed as ‘mature’, but still waiting for the
market to develop to such apoint that new com-
mercial models will be mandatory. Many of the
southern European countries fall into this cate-
gory, plus Latin America.
In the third category – what IMS has called
the ‘pharmerging’markets (China, India, Brazil,
Russia, Turkey, Korea and Mexico) – growth re-
mains high, healthcare systems and funding
models are still developing, and a middle class
is emerging that can fund healthcare. Here the
traditional model still operates successfully.
NGP. What has IMS been doing to advance a
solution?
SS.Manufacturers have been applying a num-
ber of generalised frameworks in their early ex-
perimentation and pilots with new commercial
models. IMS, however, hasmadeuse of its local
NGP.What is drivingpharmaceutical companies
to re-think their commercial models?
Sati Sian. Several converging business condi-
tions are forcing most major pharmaceutical
companies to review their core, go-to-market
strategy and how they commercialise their
products. The most direct one is a decline in
sales force productivity – a trend first ob-
served a couple of years ago – precipitated
because the ability to access and inform
physicians has been tightened in response to
the stricter controls that have been placed
around them.
But the larger issue is that companies are
straining to sustain profitability in light of grow-
ing generic competition, slower innovation and
a much less robust pipeline, tightening regula-
tions and growing safety challenges, and cost
controls imposed by a variety of new decision-
makers. Payors are becoming increasingly ag-
gressive in controlling costs, a trendmadeeasier
by the availability of generics and the growing
number of ‘me too’ drugs in themarketplace.
In this environment,most companies recog-
nise the importance of reviewing their assets in
sales, marketing, market access and medical af-
fairsandthenrationalisingthemagainstabroader
set of customerswith different needs.Many com-
panies began experimenting with pilots of new
New commercial models
144 www.ngpharma.eu.com
EXECUTIVE INTERVIEW
Sati Sian looks at how pharmaceutical companies are reviewing their strategies to meetchanging market needs.
commercialmodels a few years ago, and a select
fewhavemoved to full implementation in2009.
NGP. How do the new commercial models com-
pare to the old?
SS. The former model was designed to achieve
‘share of voice’. At its core was the simple (and
at one time valid) notion that ‘more reps equal
more sales’. That singlemodel nowappears fun-
damentally broken for a large proportion of the
market. In its place are multiple models flexing
to accommodate regional differences and the
nature of the controls that have been put in
place in each country. Thesemodels take into ac-
count new, additional stakeholders and the
complex interactions needed to work success-
fully with each of these groups.
NGP.What trends are you seeing across major
markets?
SS. Markets across the globe are at different
stages of evolution. In advanced markets such
as theUS, Canada, theUK andGermany, the dy-
namics have already changed. The return on in-
vestment in physician-calling programmes and
larger sales forces is dramatically down for a
large segment of themarket. In Germany, for ex-
ample, new legislation gives the sick funds con-
siderable power to negotiate directly with
IMS Health ED:13sept 8/4/09 13:49 Page 144
footprint in each of the eight leadingmarkets to
study what has really been driving change and
to understand the current commercial context
for products across 80 therapeutic areas.
We’ve segmented each therapeutic class in
each country into three market categories: dif-
ferentiated, commoditised and transitional. This
research has shownushow the need for change
varies by class and country and what invest-
mentswould nowmake a real difference in each
market. Across the board, we’ve found consid-
erable opportunity for optimisation; many bil-
lions of dollars of promotional spending are no
longer warranted or could be better deployed.
Based on the evidence we collected, we
also developed insights into the competencies
and structures that pharmaceutical companies
will need in order to respond appropriately. We
then created a strategic framework for aiding
companies in devising commercial models that
accommodate their portfolios, the competitive
landscape, and their own threshold for change.
To help companies make the transition – which
will in all likelihood be the most ambitious
change effort the industry has ever undertaken
–we’ve structured anapproach to implementing
change using the collective talent and knowl-
edge of ourmanagement consultants.
NGP. What framework for designing and im-
plementing new commercial models does IMS
recommend?
SS.We believe, for starters, that each company
should understand the real return it is getting
from its go-to-market efforts and assess its
broader strategic options before undertaking
the ‘downstream’ work of developing a new
commercial model. Once a cohesive under-
standing is established, work can progress
along three work streams.
Themost near-term involves stimulating the
efficiency and the effectiveness of the existing
resource, and these efforts are currently having
the most impact on clients’ businesses.
Companies are primarily using technology to
look at more efficient segmentation schemes
and pushing to create more value through the
existing resource pool.
The second focuses on stakeholder en-
gagement. One of the most significant factors
that will drive improved performance is achiev-
ing clarity about the new stakeholders and how
best to engage them. For example, this may en-
tail knowing how to use key account manage-
ment structures, deciding whether resources
should be regionalised so that they are closer to
the plan owners, and determining what re-
sources are needed to engage successfullywith
the new stakeholders.
The third area is around creating additional
value from the current portfolio of products. IMS
is encouraging companies to think beyond the
therapy itself and to wrap total treatment plans
around the product set.
NGP. What’s required to adopt a customer-
centric approach?
SS. First, understand that the definition of the
customer is changing. The customer used to be
the physician, and so as much as 90 percent of
the sales effort was physician-focused. Now
‘the customer’ includes amuchbroader groupof
stakeholders.
This means that marketers face a very dif-
ferent set of needs that must be satisfied in the
market. Companiesmust, therefore, have differ-
ent value propositions, different organisational
structures, and different skills, capabilities and
assets that face the stakeholders.
We’ve seen this customer-centric approach
workquitewell.A top tenpharmaceutical compa-
nywanted to build stronger, customised relation-
shipsacross its customerbase, andsowehelped
it isolate the variables that customers appreciate
in their interactions with the company. We then
recommended newmetrics for driving behaviour
that included measures of customer value and
plan influence by region, rather than share of
voice. The company was able to realise an incre-
mental$900millionannually inonecountryalone.
NCP. Can you point to some examples of com-
panies that have got it right?
SS. Although a few businesses are in some
stage of implementation, it’s too early to pro-
nounce that they have been successful.We are,
however, beginning to see strong implementa-
tions of new regional structures in which com-
panies are moving resources from a national to
a local level. In the US for example, three major
players are implementing and executing region-
al organisations that have the autonomy to re-
spond to local needs by re-tuning their
proposition. One of our clients operating in
Spain has also adopted a regional approach,
aligning the management framework to the ge-
ography of the new stakeholders. The company
is seeing significant improvement in the uptake
of newproducts, as itsmarket access teams are
integrated at the local level.
NGP.What does IMS bring to the challenge?
SS. First, IMSprovides access to the information
required to understand the current landscape in
eachmarketandtheability toquantify thedegree
to which a company’s existingmodel is working.
Plus, we have in-depth, local knowledge about
the health outcomes that local healthcare
providers are demanding. Having framed the
strategic decision-making process, we can help
companies select the best approach for their sit-
uation. For example, we helped a mid-tier com-
pany map out its future operating environment
across 19 countries, outlining what models
made the most sense in each geography and
what skills, processes and assets it would need
inorder to succeed.
Wecan thenguide the onerous and lengthy
implementation process and measure the
success of the resulting programme. It’s worth
noting that our recent acquisition of Skura
Professional Services enhances our ability to
implement customer-centric approaches with
particular experience in implementing closed
loop marketing. �
145www.ngpharma.eu.com
Sati Sian is Global General
Manager, Commercial Effectiveness
at IMS Health.
IMS Health ED:13sept 8/4/09 13:50 Page 145
146 www.ngpharma.eu.com
For sellxpert, early involvement of the sales team in planning
the future field sales initiatives was extremely important. This as-
sured seamless and professional communication at all levels from
the very beginning.
Following successful conclusion of the respective project phases
– targeting, CRM, PR, marketing, medical competence sessions and
logistics – the Flector Pain Plaster made its debut at the German
Congress of Orthopaedics and Trauma Surgery in Berlin from 21 - 25
October 2008. Not only did the product quality meet high approval,
the key visuals, which were pre-tested by the
field service, were also very well received. The
viewers associated the ankle bearing a criss-
cross plaster against a red background with
Swiss quality and high class workmanship.
The sellxepert ad team received intensive
specialist training in Switzerland and compre-
hensive training in Bruchsal prior to beginning
the nationwide introduction of the Flector Pain
Plaster on 20 October 2008. The product is
available from pharmacies and general prac-
titioners and also from sports doctors and orthopaedists. The Flector
Pain Plaster has met a very positive reception from both doctors and
pharmacies and has received positive feedback from all sides during
the first six months. This demonstrates that professional preparation
on all levels, together with professional communication between the
project team and field staff, minimises friction and provides sustain-
able support for success in the market. n
The expanding healthcare service provider sellxpert has suc-
cessfully extended its product portfolio to include an area that
was almost exclusively the responsibility of pharmaceutical
companies in the past.
Its comprehensive overall concept won sellxpert the contract for
the launch of the pain plaster for the renowned IBSA Institut Bio-
chimique SA, whose registered office is in Lugano.
Mr U. Sidjanski, IBSA Sales and Marketing Manager for Swit-
zerland and the designated General Manager of IBSA Germany,
described the specified requirements as
follows: “We wanted everything from one
source, i.e., a contact person with a good
knowledge of all the players in the German
market. This meant knowing, on the one
hand, how to approach doctors and pharma-
cists. On the other, they had to be familiar
with the wholesale trade and the entire lo-
gistics behind it. They also had to be capable
of coordinating all our marketing initiatives
in Germany.”
Alongside excellent know-how and a high quality sales team,
the decisive factor in awarding the contract was the sellxpert part-
ner network, which is unique in this branch. The network includes
marketing experts, advertising/PR agencies, medical data collec-
tion specialists, CRM specialists and logistics companies. It enables
sellxpert to guarantee fast and streamlined implementation on all
levels – from a single source.
Launch of fLector Pain PLastersellxpert GmbH & Co KG introduces the OTC product ‘Flector Pain Plaster’ to the German market for the Swiss company IBSA.
Sybille Queißer is the
Managing Direcotor of
sellxpert GmbH & Co KG. Most
recently she worked freelance,
prior to which she was the co-
founder of pharmexx, where
she worked until 2002.
Sybille Queißer
SELLXPERT ED P146.indd 146 8/4/09 13:46:38
portant to ensure the camera is out of sight, because people behave dif-
ferently when they’re aware they are being filmed.
“Telepresence firms minimize the bezels, use large rear projection
video walls, or large beam-splitters to create a more immersive experience,
so that it’s much different from the observant experience of watching a
TV set,” Lichtman says. “When you get the human fac-
tors of the experience right, people will actually use
it, and they’ll use it much more than they would have
used traditional videoconferencing. Statistics collect-
ed from five pharma companies show that they used
traditional videoconferencing for no more than 11
hours per month. But when you make an investment
in these environments, people will use them 50, 60,
70, 100-plus hours per month.
“You don’t need draconian travel restrictions, be-
cause you still want people to travel and move the ball
when that is the most appropriate form of communica-
tion. However, there are many times when, if you could
have the same dynamics as a personal meeting but save the cost, you
would accelerate your time-to-market advantage, the development cycle
of a drug and the approval and testing process.
“Being able to give your employees that tool is very, very important,
and that’s why companies have been investing in this technology. They
Since technology became centrally important to business op-
erations, researchers around the world have been working
to streamline communications across long distances.
Communication via digital channels began in the 1980s, and
spread to the masses though software such as MSN
Messenger and Skype. Now the next
level has arrived, in the form of telepresence.
Howard Lichtman, President of Human Productivity
Lab, defines telepresence as: “Visual collaboration so-
lutions that address the human factors of participants
and as closely as possible attempt to replicate an in-per-
son experience.”
According to Lichtman, the technology of telepres-
ence is so advanced it is capable of convincing users
they are in the same physical space with someone who
is on the other side of the world. He describes the intel-
ligence behind the technology: “The creation of an in-
person experience is accomplished by a combination of
factors: Mirroring the environment, so it seems like all the architectural el-
ements on both sides of the world are the same, creating a feeling of being
in the same physical space.” Low-latency video and audio codecs, high-
quality private IP networks, life-size images, fluid video, accurate flesh
tones and spatial acoustics are also used to maintain the illusion. It’s im-
Virtual reality
148 www.ngpharma.eu.com
Howard Lichtman tells NGP about the revolutionary new technology that ischanging the way pharma companies do business.
“As the value goesup, more people willjoin; as more peoplejoin, the value goesup more – it’s avery positive cycle”
Lichtman ED:13sept 8/4/09 13:53 Page 148
have seenusagegoup, theyhave seen their travel godown, theyhave seen
time-to-market advantage, they have seen improvedproductivity; all of the
things that videoconferencing promised but never delivered because peo-
ple didn’t like it. It was unnatural, it was painful, therewas delay, therewas
lag,” explains Lichtman.
More reliableNot only is the technologybeneficial for creating apersonal experience
and avoiding the ‘pain’ of the old system, it is also creates a much more
reliable network with the right kind of bandwidth, ensuring there are no
screen remnants or fragments. Lichtman explains that it maintains a
very low latency to ensure there is no delay between sites.
“in the old days,” Lichtman explains, “videoconferencing was deliv-
ered over a lot of point-to-point circuits. So firmsmight have had aT-1 data
line between a main videoconferencing room in London and an office in
New York, that’s all it’s dedicated to. You couldn’t have other IP applica-
tions competing for the videoconferencing bandwidth because
video traffic is delay intolerant, and if it suffers packet loss, then
you lose the experience and then the technology becomes a dis-
traction instead of a benefit,” he says.
Instead of point-to-point circuits, companies are now chang-
ing the way in which they communicate, using IP videoconfer-
encing both internally and externally. Previously, the technology
was generally used for headquarters to talk to remote offices.
Now companies are investing in what Lichtman describes as
‘telepresence community of interest networks’ (CoINs).
“You can invest in telepresence CoINs thatwill not only connect
you to your other locations butwill connect you to the othermembers
of the community of interest network. You’rebuying connectivity into a
cloud that’s going to support your own locations, but now you can call
people in other companies. You can call your vendors, suppliers, joint
venturepartners,your lawfirm,yourserviceproviders,etc.Whatyou’re
seeing is the value of joining this telepresence community, and the in-
terest ofwatching thenetworks grow,” says Lichtman.
Lichtman says COINs are nowbeginning to take off in a bigway,
as the ROI becomes even greater with more companies joining the
community. And the more partners a business is able to communi-
cate, the better.
Industry specific“Asmoreandmorepeople joinCOINs, thevalueofbeingconnectedgoes
up,”Lichtmansays.“As thevaluegoesup,morepeoplewill join;asmorepeo-
ple join, thevaluegoesupmore– it’s a verypositive cycle.”
“Forthemovie industry itmeansthey’rebuildingeditingrooms,whereyou
canwork in theeditingprocess in real-timebetweendifferent locations.That’s
what HPHalo started out as. They’re building pitch roomswhere you can do
storyboardinganddevelopment for thefilm industry.
“In thebanking sector, they can take subjectmatter experts in one cen-
tralised location and transport them toanyof their branch locations. For ex-
ample, youmight have a relationshipwith a big bank inOhio and youneed
a foreign letter of credit, but the foreign letter of credit specialist is in New
York; now you’re able to move this expertise around the world in this very
compelling and natural way.”
According to Lichtman, many pharmaceutical companies are using
telepresence systems in their research and development environments.
“For example, Teliris has built one for GlaxoSmithKline. The big boys view
this as a strategic, competitive advantage, and they’re not that willing to
share someof the trade secrets of exactlywhat they’re doing, but suffice to
say, it’s pretty clear which companies are beginning to build application-
specific telepresence solutions.What thismeans for thepharmaceutical in-
dustry is that there canbe shared research anddevelopment between labs
in the US and Europe.”
Lichtman compares the development of telepresence to that of the tele-
phoneandfaxmachine.Asmorepeoplebegantousethem, theybecamenor-
malised into business operations, and thetechnology continued to improve.
Telepresence communications currently exist mainly on the executive floors
of Fortune 500 companies, with only executives seeing, using and under-
standing this new process of communication. Lichtman advises that the ex-
perienceof telepresence cannot beunderstoodwithout being experienced.
“To understand the power of it, you have to go and sit in one of these
environments, and say, ‘This feels like I’m sitting in the same room with a
guywho is half way around theworld.We’re having a normal conversation,
it’s not painful, we can be very effective in it, we can share data. I can show
himmy PowerPoint slides. I can show him this Excel spreadsheet and we
canwork in it simultaneously.’”
Oneof themain advantages of telepresence is the ability it provides to
avoid the need for travel when holding meetings. Lichtman gives the fol-
lowing example: “When I was Vice President of Business Development at
TeleSuite, which was one of the pioneers in the industry, GSK was one of
our customers. At the time they were making around 700 flights a month
between between London and Philadelphia. They had a corporate policy
where business class travel was available for flights over five hours in
length so itwas very expensive proposition. Theywere able to put in telep-
resence solutions and cut that travel in half.
149www.ngpharma.eu.com
Howard S. Lichtman is President of the Ashburn, VA-based
Human Productivity Lab, the world's leading consultancy on
telepresence, telepresence managed services, and
telepresence inter-networking.
Lichtman ED:13sept 8/4/09 13:53 Page 149
“The other advantage is that if you have a problem you can im-
mediately huddle the team. You can immediately get people around
theworld together in a natural formatwhere you canbeproductive,
where that might not have even been possible with travel. You can
also hook up testing informatics and other R&D tools, for example,
to look at amicroscope slide remotely.
High adoptionTheUS currently boasts the highest rate of telepresence adop-
tion, but Lichtman says the rest of the world is not far behind.
“Europe is number two by far, and it’s spreading rapidly to Asia; the
Pacific Rim is now starting to get more popular. Telepresence was
essentially a homegrown technology in the US, and the major
companies in the space are American companies – Cisco, HP,
Polycom, Teliris – and so the sales forces and corporate market-
ing groups are there, but it’s definitely a global phenomenon. I’ve
seen stories recently about firms in South Africa, Dubai, Israel
and Russia that have deployed it.”
Although telepresence offers many advantages over tradi-
tional teleconferencing, there are still a few familiar downsides.
You can’t shake hands with the person you are meeting, for ex-
ample. You can’t go out and have a drink at the pub, or even
hand them your business card. “And because it is an environ-
ment where the camera is on you, that can be good and bad,”
Lichtman says. “It’s good in the sense that people pay more at-
tention. People will actively listen and participate more versus
checking their Blackberrys. The flipside is that they may be less
candid because of the potential for the meeting to be recorded.”
Lichtman says the technologywill only getmore realistic as the
technology develops. “There’s an amazing jump in realismbetween
the average telepresence setup and traditional videoconferencing,
which I call the ‘plastic camera on theTV set on thedessert cart’. The
experience is only going to getmore real. It will also get cheaper; as
IP networks develop around the world and there are submarine ca-
bles and fibre optics going to more countries. The cost of delivery
and the cost of the network and themanaged services that support
it are more expensive than the endpoints. It’s those costs that will
go down.”
Lichtmanalsopredicts thatutilitywill goupasmore telepresence
CoINs join together and have network-to-network interconnects be-
tweenthem,andasmorecompanies thathaveproprietarycodecsand
calling plansmake their systemsmore interoperable. “Wewill get to
thepointwherevirtually everymajor company in theworldwill havea
room, and you will be able to walk into the room and call any other
company in theworld,andsitdownandhavearealmeeting,and itwill
be like you’re in the samephysical space. You’ll be able to share infor-
mationmuchmoreeasily, and that is going to supercharge theflowof
knowledgeand the speedof innovation.
“Good things will come of this, in the same way that good
things came out of the internet. Good drugs will be developed
faster and bad drugs will be discovered sooner. The quality and
the amount of information that is being exchanged will go up
dramatically, and that will be overwhelmingly positive.” �
150 www.ngpharma.eu.com
Lichtman ED:13sept 8/4/09 13:53 Page 150
152 www.ngpharma.eu.com
Money has been fl ow-
ing into innovative
cancer research pro-
grams and biotechs
in Texas over the
past few years. Its
residents have already approved Propo-
sition 15, a $3 billion (€2.25 billion) bond
program, which will be ploughed into
fi nding a cure through research and pre-
vention, clinical trials and the construc-
tion of laboratory facilities throughout
the state. Each year, 37,000 Texans die
from cancer, and state fi gures show the
disease now costs Texans about $30
billion (€22 billion) a year in direct and
indirect costs.
The state is one of the top fi ve regions
in the US attracting biotech companies.
In fact, central Texas-based life science
outfi ts have attracted about $500 mil-
lion (€373 million) in venture capital over
the past year, while the amount of ven-
ture capital invested in bioscience over
the last six years came to $1.34 billion (€1
152TEXAS FOCUSBiotech investment in the Lone Star stateThe American state of Texas has a reputation for doing everything bigger and better, which is good news for the state when it comes to medical innovation.
70 percent of the population of Texas lives within 200 miles of AustinTexas possesses three of the top 10 most populous cities in the US – Houston, Dallas and San AntonioTexas has 215 cities with a population of 10,000 or moreTexas has 90 mountains a mile or more high, with Guadalupe Peak in West Texas at 8751 feet being the tallestAlmost 10 percent of Texas is covered by forest, which includes four national and fi ve state forests
FUN
FACT
S
STATE STATS
Population: 22,859,968
Capital: Austin
Governor: Rick Perry
Number of counties: 254
Colorado River, Austin at night
BACK-TEXAS.indd 152 8/4/09 13:42:04
153www.ngpharma.eu.com
billion), according to the Biotechnology
Industry Organization.
MD Anderson Cancer Centre in Hou-
ston leads the way in the state and is
Texas’s only dedicated cancer hospital.
Its mission statement is clear and simple
– to eliminate cancer. Some notable
achievements of the hospital include
designing a rapid chromosome ‘painting’
technique to pinpoint gene abnormali-
ties in chromosomes for use in diagnosis
and treatment monitoring of cancer and
genetic diseases; and documenting a
direct molecular link between cigarettes
and lung cancer, based on research stud-
ies that showed a carcinogen in tobacco
smoke binds to key mutagenic sites in the
p53 gene. The centre also developed a sim-
plifi ed BCR-ABL diagnostic test that uses a
tiny amount of blood to detect and monitor
chronic myelogenous leukemia and some
acute leukemias, thus reducing the need for
multiple bone marrow aspirations.
North Texas will soon have its own
cancer hospital following the news that
Baylor University Medical Center is set to
open its own facility. The centre will be
committed to advanced cancer treatments.
It will allow for a more comprehensive
personalised medicine program, including
areas of research such as targeted therapy.
The new 450,000-square-foot centre is
scheduled to open in 2011, and construc-
tion of the dedicated cancer hospital will
begin in 2010, with completion sched-
uled for 2013.
UT Southwestern Medical Center is
spurring innovations in patient care and
aiding economic growth in the area by
establishing a new biotech park, called
BioCenter, at Southwestern Medical Dis-
trict, to develop university technologies
and attract existing biotech companies to
North Texas. The 13-acre site – purchased
from the city of Dallas for $4.1 million (€3
million) – is being developed in stages,
with the fi rst of four buildings expected
to be ready for occupancy this summer.
With ultimate plans for up to 500,000
square feet of laboratory, offi ce and
research space, BioCenter will serve the
full spectrum of the biotechnology and
biodevice industry, providing a nurturing
environment for early-stage and mature
companies alike. The purpose of the site
is not only to develop UT Southwestern
technologies to the point of commerciali-
sation, but also to provide commercial
space for existing or start-up life-science
companies that want to locate close to
the university and its many resources.
Austin Ventures, a $3
billion (€2.25 billion)
venture capital fi rm based
in Austin, introduced
Santé Ventures, a
venture capital fi rm
with healthcare
investment experience,
last year. Santé closed its fi rst
investment fund in December 2007,
with $130 million (€97 million) in
capital committed primarily to seed
and early-stage companies in medical
technologies and healthcare services.
Emergent Technologies Inc., also
based in Austin, has funded scientists
at the University of Texas, Dallas
and UT Southwestern with $50,000
(€37,000) to develop a device for
removing kidney stones.
VC FOR MEDICAL TECHNOLOGY
venture capital fi rm based
last year. Santé closed its fi rst
Austin (pop. 743,000)Texas’s very own San Francisco, Austin is a surprisingly liberal city in a state well known
for its conservatism. Nicknamed The Live Music Capital of the World, the city has a thriving
music scene with more musicians per capita than any other North American city (apart
from Nashville).
San Antonio (pop. 1,328,984)San Antonio is the second-largest city
in Texas and 7th largest in the US.
Every year 26 million tourists come
to the city to visit such attractions as
SeaWorld and the Six Flags Fiesta
Texas theme park. The jewel of the
city is the River Walk, with its shops,
bars and restaurants, which meanders
through the downtown area.
Dallas (pop. 1,052,400)Dallas can be found on the northeastern plains of Texas and covers an area of 342.5
square miles. The city is spending $13 billion (�9.7 billion) on urban developments. The
frozen margarita and the chicken fajita were invented in Dallas.
Houston (pop. 2,000,000)America’s fourth largest city was founded
on August 30, 1836 by brothers Augustus
Chapman Allen and John Kirby Allen on
land near the banks of Buffalo Bayou.
NASA’s Johnson Space Center is located
in Houston. The city’s Texas Medical
Center is home to more than 42 nonprofi t
institutions and is the largest medical
center in the world.
CITY FOCUS
The River Walk
Saturn V at Johnson Space Center
BACK-TEXAS.indd 153 8/4/09 13:42:14
154 www.ngpharma.eu.com
154IN REVIEWOn the shelf
Our Daily MedsHow the Pharmaceutical Companies Transformed Themselves into Slick Marketing Machines and Hooked the Nation on Prescription Drugs, By Melody Peterson
Former New York Times reporter Petersen takes an in-depth look at questionable practices
within the pharmaceutical industry, and suggests reforms aimed at making big drug companies
more accountable. Covers everything from copycat drugs and the environmental impact of drug
residues in drinking water to marketing practices aimed at doctors.
NGP says: A thorough inside look at controversial aspects of the pharmaceutical industry not usu-
ally accessible to the general public. Read it and decide for yourself.
Explains the role of patents, FDA regulations for generic drugs and the Hatch Waxman Act on
conventional and biological drug product development, and how directed innovation can result in
enhanced care for patients while extending the commercial lives of the drugs. Of interest to phar-
maceutical executives and managers; regulatory, legal, business development, R&D and strategic
marketing professionals; and anyone with an interest in the future of the leading American pharma-
ceutical and biotechnology industries and the high value jobs they provide.
NGP says: Concise, easy to read, and helps to simplify the complex subject of pharmaceutical
patent regulations.
The Generic ChallengeUnderstanding Patents, FDA & Pharmaceutical Life-Cycle Management By Martin A. Voet
Business development in the biotechnology and pharmaceutical industries accounts for over
$5 billion in licensing deal value per year. The scope of the job can be huge, and it can require a
broad range of knowledge and skills from practitioners. Austin’s book is based on the international
training program he delivers to pharmaceutical executives.
NGP says: A practical guide to developing a career in business development in the pharmaceutical
industry. A must read for anyone thinking of entering the fi eld.
Business Development for the Biotechnology and Pharmaceutical Industry By Martin Austin
NGP takes a look at the recent crop of pharmaceutical and life sciences books.
InReview.indd 154 8/4/09 13:42:54
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156 www.ngpharma.eu.com
A Slovenian politician and economist, Janez Potocnik is cur-
rently serving as the European Commissioner for Science and
Research. Before joining the commission members in 2004,
Potocnik was Assistant Professor at the University of Ljublja-
na, where he lectured on statistics and economics.
Combining R&D development with number crunching, Po-
tocnik has expanded the EU’s R&D intensity, investing three
percent of the commission’s GDP in R&D. He views research
and development as essential components of Europe’s
economic and social future, and so has made the improve-
ment of conditions for research within the region as his
primary aim.
His belief is that generating knowledge will encourage tech-
nological advancements to help bring about the achieve-
ments of such policies. By providing scientific support to
policy-making, decisions are made based upon sound data.
Underlying his aim of expanding R&D is a commitment to
green science.
Since taking the position, Potocnik has developed various
initiatives to tackle the problem of dwindling science careers,
such as Researchers in Europe 2005, which organised vari-
ous events to bring scientists and the public together. Also,
the Code of Conduct and Charter for Recruitment initia-
tives have been launched in an attempt to boost interest in
the industry.
Potocnik also developed the Innovative Medicines Initiative
(IMI), a new industry research initiative, to further the expan-
sion of new pharmaceutical medicines in Europe. The Com-
missioner granted the project a huge €2 billion budget until
2013, saying, “IMI is about pooling public and private efforts
so that Europe can be a big player.”
As an avid campaigner against animal testing, Potocnik has
criticised both the pharmaceutical industry and academia
for failing to commit sufficient resources to finding alter-
natives, and has called on companies to share informa-
tion gathered from research and testing. The stage has
been set for an EU-wide ban on animal testing of cosmetics
in 2009. n
156PROFILEJanez PotocnikThe European Commissioner for Science and Research
Profile.indd 156 8/4/09 15:09:24
gdsinternational www.gdsinternational.com
US Editio
n
Europe
Editio
n
Your World. CoveredFrom the people you hire to the products you sell, if you’re in business, we’ve got it covered...
Next Generation PharmaceuticalApproximately 50% of new drugdevelopment fails in the late stages ofphase 3 – while the cost of getting a drugto market continues to rise.
NGP is written by pharmaceutical expertsfrom the discovery, technology, business,outsourcing, and manufacturing sectors.It is committed to providing informationfor every step of the pharmaceuticaldevelopment path.
Find out more: www.ngpharma.eu.com Available for: Europe, US
Executive Healthcare ManagementThe healthcare industry is changing. Understanding how toimprove clinical processes, meet industry standards andmerge the maze of disparate systems is vital.
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HRManagement concentrates on the development of HRstrategies, directions and architectures.
Available for: Europe, US
Find out more: www.hrmreport.com
CATALOGUE PAGE NGPEU:apr09 08/04/2009 14:16 Page 157
158UPCOMING
International EventsA roundup of upcoming pharmaceutical conferences and workshops around the world.
May 4-7, 2009The 8th Pharmaceutical Powder X-ray Diffraction SymposiumGlasgow, Scotland
International Centre for Diffraction Data
Tel: +44 610 325 9814
Email: [email protected]
September 15-17, 2009Next Generation Pharmaceutical SummitBremen, Germany
Tel: +44 212 920 8181
June 11, 2009Biosimilars and Analytical ChallengesLondon, England
Royal Pharmaceutical Society of Great Britain
Tel: +44 207 572 2640
Email: [email protected]
May 5, 2009Supporting Pharmacy Managers in the FutureLondon, England
Royal Pharmaceutical Society of Great Britain
Tel: +44 207 572 2640
Email: [email protected]
May 11-12, 2009Aseptic Processing in the Manufacture of Biotech and Pharmaceutical ProductsBerlin, Germany
The Center for Professional Innovation and Education
Email: [email protected]
158 www.ngpharma.eu.com
events-back.indd 158 8/4/09 13:47:40
May 28-29, 20093rd Asian New Drug Development WorkshopTokyo, Japan
Drug Information Association
Tel: +81 35 833 8444
Email: [email protected]
June 1-3, 2009Biotech ChinaShanghai, China
Deutsche Messe AG
Tel: +49 511 893 2136
Email: [email protected]
August 20-21, 20092nd Annual Pharmaceutical Law ConferenceSydney, Australia
IIR Conferences
Tel: +61 2 9080 4009
Email: [email protected]
May 5-6, 2009Early Drug Development: Navigating the Treacherous RapidsSilver Spring MD, United States
Drug Information Association
Tel: +1 215 442 6100
Email: [email protected]
May 14-15, 2009RNAi World CongressBoston MA, United States
Select Biosciences
Tel: +44 1787 315110
Email: [email protected]
May 1, 2009Automate Your Validation ProcessMontreal QC, Canada
Compliance Associates
Tel: +1 905 738 3773
Email: [email protected]
159www.ngpharma.eu.com
events-back.indd 159 8/4/09 13:47:51
160 www.ngpharma.eu.com
panies are abandoning the primary care
market entirely.
The future of the pharmaceutical in-
dustry is broader than pharmaceuticals; it
also lies in servicing health. More specifical-
ly, it lies in transitioning from an industrial-
era view of a business focused on
manufacturing and promoting physical
products (i.e., drug brands), to a model
based on organising industry environments
around shared marketspace. This is about
forging whole new kinds of business plat-
forms to create new markets: Merck linking
with General Mills to invent a new standard
of care in diabetes; Roche connecting with
Apple to design a unique aggregation of
health content in breast cancer.
The winners in this new economy will
know how to work with all this interconnec-
tivity, the chaotic and the nonlinear. They
will know how to move horizontally and
work collaboratively, like P&G and Google,
who recently exchanged employees in an
effort to spark marketing innovation.
There is opportunity in this Year of
the Ox to re-orient the pharmaceutical in-
dustry, as Pfizer claims in its news release
announcing the Wyeth acquisition, and
these new even-bigger companies have
the resources and positioning to do it. But
it will take a different kind of strategy and
action, an evolutionary leap to adapt to a
new world where there are no easy an-
swers, no proven routines, and no straight
lines. This is the strategic challenge for the
global pharmaceutical industry. n
A ccording to the Chinese zodiac,
2009 is the Year of the Ox. The sign
of prosperity through fortitude, the
Chinese say the Ox works methodically, a
born leader possessing an innate ability
to achieve great things. A good time then,
for natural leaders to step forward and
make big, creative moves on behalf of
their companies.
Despite the size of the recent Big Three
acquisitions in the pharmaceutical indus-
try, however, these deals feel more routine
than imaginative, more tactical than strate-
gic. Pfizer/Wyeth, Merck/Schering-Plough,
and Roche/Genentech look more like linear
moves at the operational level, and it’s dif-
ficult to see where new strategic results will
come from. It’s great to be number one in a
market space, as Pfizer is now envisioning
itself to be, but aspiration is not strategy –
General Motors is the ‘number one’ car
company in the world.
The centre of gravity – the focal point
for overall competitive capability – for these
acquisitions is still squarely sitting on a
commercial model whose success de-
pends on promoting the features and ben-
efits of individual drug brands in a
marketplace that sees little value in, and
does not trust, pharmaceutical promotion.
Despite spending of between $30-$60
billion (€20-€45 billion) a year on promo-
tion in the United States, sales of prescrip-
tion drugs in that country rose just 1.3
percent in 2008, slowing for the second
straight year and continuing a downward
trend in developed markets throughout the
world. Issues around pharmaceutical sales
force and market access or now so widely
known they are cliché.
StrategyLike most industries, governments and
institutions, pharmaceutical companies
face an adaptive challenge to a changed
context for strategy. The whole framework
for getting new medicines approved is
evolving, the amount of revenue generat-
ed by new drugs is dropping, and atomis-
ing ‘customers’ are awash in information
and competing data claims. The market-
place is moving away from accepting labo-
ratory measurements as evidence of real
clinical benefit, focusing instead on improv-
ing health outcomes. There is a growing re-
ality that many people present with
complex symptoms and multiple illnesses,
driving the demand for holistic solutions
that will in turn change human resource, fi-
nancing, service delivery, information tech-
nology and legal policy. In another sign of
strategy mismatch between the pharma-
ceutical industry and the marketplace, the
World Health Organisation is now under-
taking a fundamental shift to primary
healthcare, while several major drug com-
COMMENTBusiness in the Year of the OxWhy the recent mergers and acquisitions in thepharmaceutical industry are missed opportunities forcommercial model innovation. By John Singer160
John Singer is the founder of Blue
Spoon Consulting, a strategy and
marketing consultancy that helps clients
innovate their tactics, differentiate their
strategies and create at a system level.
“The future of theindustry lies in
transitioning to a modelbased around shared
marketspace”
COMMENT BACK:apr09 08/04/2009 15:20 Page 160
64 www.ngpharma.eu.com
As procurement continues to move up the corporate agenda,
the switch to lean processes has put pressure on sourcing
departments across the pharmaceutical industry. Sammy
Rashed, Head of Global Sourcing at Novartis, explains that
security of supply is a priority. “When looking at the supply
chain that goes into making our products, there’s a certain responsibility
we have to ensure the continuity of supply. That has to do with ensuring
the fi nancial health of our suppliers, certainly given that the current situ-
ation is both a threat and an opportunity. For example, if suppliers have
a high debt level, or a lot of sitting inventory, if they’re exposed with idle
capacity, if their prices are linked to very highly fl uctuating commodity
prices which they’ve hedged, this is information that we must be aware
of so we can adjust our strategy accordingly.
SUPPLY CHAIN
64 www.ngpharma.eu.com
Novartis’ Sammy Rashed talks to NGP about ensuring supply chain security in the stormy weather of the current fi nancial climate.
Turbulence AHEAD
Turbulence ahead_Rashed.indd 64 9/4/09 08:14:34