Flying solo

Biotech CEOs love to talk up their big pharma partnerships, often pointing to deals as validation of their companies’ scientific approaches. Licensing arrangements have always been an important source of biotech financing. So what was behind a recent In Vivo article entitled: ‘Biotech’s declaration of independence and what pharma needs to do about it’?

Authors from Campbell Alliance, a management consulting firm, reported on a new generation of biotechs that are eschewing partnerships, choosing instead the ambitious strategy of independent commercialisation. They pointed to Jazz Pharmaceuticals, Human Genome Sciences and Alexion as examples of companies with their own sales and marketing infrastructures. These firms focus on niche segments, where patient populations are well defined, clinical trials are small and, once approved, products can be marketed to specialist physicians by relatively small sales teams.

The most compelling argument for flying solo is economic. If a firm’s long-term strategy is to become a fully-integrated commercial organisation, why would it settle for royalties and milestone payments from a partner when it can keep all the product sales for itself? Another driver is the ability to retain control. Large companies have been known to make sudden changes in direction, exiting therapeutic areas no longer considered strategic. Independence insulates biotechs from such shocks, allowing managers to keep their R&D programmes on track.

Back in 2006, this blogger interviewed Bioenvision (Genzyme) and TopoTarget, two biotech firms focused on niche cancer indications. Their management teams knew that small sales forces would be capable of reaching their target specialist oncology hospitals. So Campbell Alliance has not identified a new trend so much as one that has been gathering pace for several years.

But broader recognition of this movement will revive debate over whether big pharma or small biotech has the most leverage when the two meet over the deal-making table. Before the credit crisis, analysts often pointed to biotechs with quality assets enjoying significant bargaining power over their large partners. Some firms managed to negotiate favourable deal terms, including co-promotion rights on molecules. During the recession, as many cash-strapped biotechs went to the wall, big pharma is thought to have regained the upper hand.

The second part of the Campbell Alliance article (the bit addressing “what pharma needs to do about it”) implies that the balance of power has shifted back towards biotech again. Don’t bet on it. The biotech firms that make the headlines, either with successful go-it-alone strategies or lucrative partnering deals, are few and far between. Remember also that big pharma is not a passive participant in the partnering game. Armed with wish-lists of therapeutic areas and mechanisms of action, the canniest business development managers often know precisely which biotechs they want to speak to, even before those biotechs have thought to pick up the phone.

Campbell Alliance’s on-the-mark observations are not matched by the strength of its recommendations. The authors argue that “big pharma’s next move” should include a focus on areas where companies’ differentiators are relevant, maintaining a presence where scale matters (think diabetes and cardiovascular disease), anticipating the complexity of specialty product development and commercialisation, and returning to their roots in innovation.

All true, but these ideas are not new. The recent re-engineering of big pharma business models has been all about moving companies in this direction. Thankfully there are areas where pharma’s corporate strategists remain one step ahead of management consultants.

Authored by Pete Chan

Glaxo and China: Yin and Yang?

The application of traditional Chinese medicine to modern drugs was unveiled last week as GlaxoSmithKline’s latest venture.

Not content with their efforts within neglected fields, which include a rare disease unit and a recent pledge to combat neglected tropical diseases, GlaxoSmithKline also plans to study traditional Chinese medicine as part of a revamp of the company’s research and development.

Traditional Chinese Medicine (中醫) refers to a broad range of medical practices, including herbal medicine, acupuncture, massage (Tuina), exercise (qigong) and dietary therapy, based on a tradition dating back more than 2,000 years. Well known notions include yin-yang and the Five Phases.

Common medical practice throughout East Asia, it was modernized in the 1950s in the People’s Republic of China so as to integrate many anatomical and pathological notions from science. Yet the western world is plagued by doubt, historically viewing eastern medicine as alternative. Scepticism is down to many of its assumptions, including the model of the body and the concept of disease, not having any basis in science.

GSK’s revamp follows a review of their 38 groups of scientists, known as Discovery Performance Units (DPU), and will lead to three units being closed and four opened. The new units will be based in Shanghai and will focus on how Chinese medicine and its principles can be applied to making new, synthetic molecules.

GSK’s chairman of research, Moncef Slaoui said: “With modern technology we have the potential to yield new molecular entities with significant efficacy.”

Evidently a strategic move it reflects the growing trend of drug companies to adapt their research to particular regions and with China’s pharmaceutical market forecast to boom to £63.5 bn by 2012, China is one of the most important regions to conquer.

Authored by Lisa Stevens

United pledge to combat diseases of ‘neglected people’

In the largest co-ordinated effort to date the 30 January saw some of the most influential organisations join forces at the Royal College of Physicians to accelerate progress towards elimination or control of 10 neglected tropical diseases (NTDs) by 2020.

The US, UK, UAE governments, Bill & Melinda Gates Foundation and the World Bank began cooperative movements along with 13 pharmaceutical companies. FiereceBiotech reports the pledge will bring a unique focus to defeating conditions such as Guinea worm disease, sleeping sickness and blinding trachoma, while controlling Chagas disease and river blindness. There is potential to improve 1.4 billion lives worldwide.

Present at the event was Sir Andrew Witty, CEO of GlaxoSmithKline, who said, “Many companies and organisations have worked for decades to fight these horrific diseases. But no one company or organisation can do it alone. Today we pledge to work hand-in-hand to revolutionize the way we fight these diseases now and in the future.’’

It seems the loud complaints of charities and developing countries concerning the lack of investment in tropical diseases have finally impacted the consciences of the drug industry who historically have preferred to invest in more profitable Western ailments, such as irritable bowel syndrome.

Yet, as the Financial Times documents, the drug industry will always have its sceptics. Bernard Pécoul, head of Drugs for Neglected Diseases Initiative, cautioned that all the NTDs could not be treated equally and would require further commitments to research and development; while Caroline Anstey from the World Bank said “These are not neglected diseases but diseases of neglected people”; highlighting the fact that drugs alone would not solve the issue.

Sceptics aside, this effort - guided by the World Health Organisation (WHO) - includes promises to sustain or expand existing drug donation programmes; sharing expertise and compounds to accelerate R&D, and donations of more than US $785 million to ensure medicine reaches patients. Companies will donate on average 1.4 billion treatments each year to those in need.

The London Declaration on Neglected Tropical Diseases also called on companies to pledge new levels of collaboration. Already, this has made for an unusual companionship between rivals: Johnson & Johnson, Pfizer and Abbott who will be developing a macrofilaricide, anti-worming pill to tackle river blindness and lymphatic filariasis. 

Dr Margaret Chan (Director General of the WHO) said last week: “With the boost to this momentum being made today, I am confident almost all of these diseases can be eliminated by the end of the decade.”

A webcast of this event can be viewed at www.UnitingToCombatNTDs.org

Authored by Lisa Stevens

Riddling Alzheimer’s disease

Alzheimer ’s disease (AD) is a growing threat to the world’s ageing population and is a topic of fascination for the mass media and public alike – whether in the press (The Daily Mail 23 Jan), TV shows (Greys Anatomy) or film (The Iron Lady). And the scientific community is undoubtedly racking its collective brain to find potential treatments with clinical.trials.gov listing over 1000 registered clinical trials in AD as of January 2012. 

The need for new treatments is certainly present:  in 2010 there were an estimated 35.6 million people with dementia worldwide. Alzheimer’sDisease International estimate that by 2050 this will increase to over 115 million people.  According to the Alzheimer’s Study Group report, of these patients, 16 million could be in the United States, costing the government healthcare system over one trillion dollars if no effective treatments are found.  

Yet, despite the considerable efforts, effective treatments remain elusive. Just last week, Pfizer/Medivation ended the development of a potential candidate following another failed Alzheimer trial (see Health News Daily). And it won’t be the last.

Scrip suggests that there is a pending crisis, with investors shying away from Alzheimer’s due to the many unanswered questions around the disease: how do we diagnose patients accurately? Can we change the disease progression? What is the potential for reimbursement?

Nevertheless, small victories are gradually being achieved. BioCentury reports today that CHMP has adopted a final qualification opinion for a new biomarker allowing its use in patient selection for clinical trials.

No need to despair yet then. And as the press reports today: reading, writing and puzzle-solving can help stave off the disease. Let’s hope the academic community can follow these steps to unravel the riddle that is Alzheimer’s disease!

Authored by Juliet Burns