Offer to Share

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Rick Connell, Vice President and
Worldwide Head of External Research
Solutions, Pfizer Global research & Development, moderates an expert panel discussion around the emerging realm of risk share in drug discovery, and speaks with Mark Ashton, Executive Vice President of Business Development, Evotec, Bill Farley, Vice President of Business Development, ChemDiv, and Sri Mosur,
CEO and President, Jubilant Discovery Services.

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Offer to Share

  1. 1. 20/20 PharmaRick Connell, Vice President andWorldwide Head of External ResearchSolutions, Pfizer Global research & Development,moderates an expert panel discussion around the emergingrealm of risk share in drug discovery, and speaks withMark Ashton, Executive Vice President of BusinessDevelopment, Evotec, Bill Farley, Vice President ofBusiness Development, ChemDiv, and Sri Mosur,CEO and President, Jubilant Discovery ServicesOFFER TOSHARE
  2. 2. whitepapers 2 RC: Some companies that work in the risk- sharing discov- then develop to pre-agreed-upon critical success factors in adrug discovery ery space with chemistry and biology programs also operate given time period. When the product reaches one of these factors, in the pre-clinical space; in which case, they essentially take it is nominated to the next stage. Should the project fail to meet invalidated hits, but they stop before development. Other them, a joint steering committee may extend this investigation companies take their programs all the way to proof-of-con- period for one to two quarters, at which point the factors are either cept, at which point, as part of that risk-sharing partnership, met or they’re not. Should the asset proceed to candidate nomina- they hand them over to their pharmaceutical partners. Most tion, the partner would pay an agreed- upon sum for that asset so companies will say they can do any service the client wants, that the development would be done on a fee-for- service basis in but in your experience with clients, where do you tend to Phase I or Phase II. have that breaking point? SM At Jubilant, we have developed a plug-and-play model from target or hit generation to Phase II proof-of-concept, leveraging MA: Some of our collaborations covered by this description our requisite capabilities in the discovery, pre-clinical and develop- start at the target, so the hits actually come from activities carried ment phase with our global clinical research organization in the out within Evotec, and they all continue primarily to pre-clinical U.S., India and Europe. Our model has been to work across the development. We only have one case where we go from post pre- portfolio, with the starting points coming from either Jubilant or our clinical development through to clinical proof-of-concept. In these collaborators. Typical scenarios include starting with a de-novo relationships, there are a couple of options for us to continue to design from our side, or a number of hits or optimized leads from proof-of-concept, but there is a natural break at pre-clinical or clin- collaborators and ending at any point from pre-clinical candidate ical development. However, having the in-house clinical expertise to Phase II proof-of-concept. At this point, our collaborators can plus a network or clinical development providers, we are uniquely either bring the pre-clinical candi- date into their development set up to support our customers from target to clinic and portfolio or allow Jubilant to continue to participate until POC. In beyond if that is their need. some cases, we also extend some of Jubilant’s own investment into the development phase. As a policy, we do not do any com- BF: ChemDiv has taken an approach based on capacity, mercialization, as our entire risk paradigm ends at resources and knowledge for the discovery processes — from Phase II in proof-of-concept. design to hit identifications, re-characterization and candidate nomination. We have recently added Phase I and Phase II clinical capabilities in Russia, a process which has been vetted, ordered RC: Let’s look at how these deals are typically structured. and actualized by several major pharmaceutical companies. Our When you approach a client and you’ve agreed on a model was simply a cost-plus model, where we constructed a roll- particular target, is the client paying for specific full-time ing workspace with appropriate assets for a equivalents (FTEs) or planning for a specific outcome? What small molecule discov- ery enterprise. is the typical business construct for a deal where you’re We insert those opportunities doing a risk- sharing model? provided by the client or sug- BF: We would like to provide a significant discount on FTEs to gested by ChemDiv, and our work vendor. The drug discovery process for a large pharma- ceutical company to produce a candidate costs about $10 million. However, if we are able to put together an enterprise, whether it be in a single target area or in a vari- ety of different target areas, we believe we can construct this rolling workspace. We look at a given workload and timelines, which is different from a large pharmaceutical com- pany’s approach, and we try to set those timelines and expecta- tions with our partners at the on set. When we reach can didate nomination, we look at getting paid a milestone, or being made whole for those efforts. Essentially, we’re doing a risk share on a cost-plus basis. We are being paid for our costs, being made whole and getting a slight bonus for delivering on those metrics through the discovery process. RC: Is the typical model to define some sort of timeline with financial boundar- ies? 20/20 Pharma
  3. 3. whitepapers RICK CONNELL VICE PRESIDENT & WORLDWIDE HEAD, EX- 3BF: No, the typical model is based on multiple opportunities. TERNAL RESEARCH SOLUTIONS drug discoveryLet’s say we’re going to use anywhere from 15 to 25 FTEs per PFIZERslot. Then what we want to do is create three to five slot opportuni-ties, whether they be de novo, hits, leads or candidate nomination. Dr. Connell started his career at Bayer in 1990, then joined PfizerWe want to mitigate all risk by taking multiple opportunities and as Head of Cancer Chemistry (1999) and spent a year at the Sand-keeping those resources moving. It may involve not only screen- wich, U.K. site before promotion to Executive Director of Discoverying, but syntheses of the new compound and development of the operations. He heads up the global External Research Solutionscurrent biological assets to interrogate that target. At the critical (ERS) group. This group manages the network of external researchdeci- sion point, a joint steering committee would decide whether collaborations delivering line-centric (Chemistry, Biology and Drugor not we have met those criteria for hits. If we were not able to Metabolism) and integrated services from target identifica- tionnominate that opportunity to lead, we would want to replace that through proof-of-concept.with another de novo, a lead opportunity or something on its wayto being a candidate nomination.RC: It sounds like the ChemDiv model would start with a set MARK ASHTONnumber of FTEs offered at a discounted rate and tracked by EXECUTIVE VICE PRESIDENT, BUSINESS DE-a joint steering committee. Should a compound advance to VELOPMENTsome milestone triggering event, the financial model wouldbe that ChemDiv would seek to remain financially whole. How Evotecsimilar is the Jubilant model?SM: We look at our model like a pre-clinical and a clinical de- Dr. Ashton has been in his current position since 2005 and is re-velopment engine up to Phase II. What we try to do is break the sponsible for global commercial and marketing activities, discuss-stages down between hit, lead and optimized lead, candidate, and ing outsourcing needs with the world’s leading pharmaceutical andPhase I and II. The research- funding decision spans across the biotechnology companies. Prior to this he was President, Dis- coverywhole portfolio, depending on how far a collaborator would like to Services, responsible for the Discovery Division of Evotec: a divi-go beyond a pre-clinical or a Phase II stage. We set the stage and sion of over 250 chemists and biologists involved in projects rangingagree to what we call fixed-research funding. We do not drive our from high-throughput screening to parallel synthesis and medicinalprojects purely by number of FTEs, but by the science and flexible chemistry.staffing that will meet the objectives of a time-bound deliverable.We prefer to work on research funding that is not tied to a fixednumber of FTEs, but does have the flexibility (which allows usto use flexible FTEs across all of our components — biology, BILL FARLEYchemistry and pharmacology) to meet the objectives of a particu- VICE PRESIDENT, BUSINESSlar stage or milestone. We manage the program as it evolves in its DEVELOPMENTscience at our mutual discretion, while keeping the partner com- CHEMDIV, INC.pletely informed. If we reach our milestones within the pre-agreed-upon timeframe, we get the normal milestone with the possibilityof bonus milestones for accelerated deliveries. If delayed, we Mr. Farley joined ChemDiv in 2000 and has in part been respon-pur- sue the specific stage at our risk. We facilitate this process in sible for the company’s remarkable growth. He manages sales andsuch a way that the collaborator pays more for success. To derive commercial development in North America; overseeing some of theefficiencies, we prefer to do this in a portfolio of assets and not as most successful chemistry and drug discovery collaborations for thesingle programs, as we can manage the attrition more effectively, company, most notably with Schering Plough, Eli Lilly, BMS, Aven-which is critical to our deal structures. Ideally, with a portfolio of tis and Syndexa Pharmaceutical, as well as many others in academia.three to five targets or programs, we are able to come out better Mr. Farley has more than 30 years experience in drug discovery andin the early phases of the collaboration despite the challenges of over 20 years in business development.science and operational delays.MA: I think that it is no surprise that Evotec’s approach is similarto that of Jubilant and ChemDiv. For example, we have a col- SRI MOSURlaboration with Boehringer Ingelheim, which works on multiple CEO & PRESIDENT, GLOBALtargets at a time. This is the preferred model, as one can spread DISCOVERY & DEVELOPMENTthe resources effectively and balance any potential attrition, givingeveryone the confidence that the milestones will be met. Having JUBLIANT ORGANOSYS LTDsaid that a number of our customers are single-target deals, butit is true to say that, we would prefer to work on multiple targets Mosur is the CEO and President of Global Discovery and Develop-in parallel. For these types of deals, we prefer the term “results- ment at Jubilant Organosys Ltd., a leading Indian pharmaceuti- calbased” rather than risk sharing. In a results-based structure we vertical focused on global drug discovery and development, manu-would be willing to discount the FTE or fixed fee in return for suc- facturing, and healthcare solutions. A chemical engineer by training,cess- based milestones as a program progresses. As mentioned Mr. Mosur develops and directs R&D and healthcare alli- ancesearlier, the preference is for a multi-target relationship where you between mature and emerging markets. He is also a promi- nentcan manage attrition, but in reality that’s not always possible, speaker in international forums and a proponent of globally lever-so businesses need to be flexible between the two. Most of our aged pharmaceutical R&D and affordable healthcare. 20/20 Pharma
  4. 4. whitepapers clients prefer the FTE structure, because then they know what they’re getting in the program. With the fixed fee, there may be a concern as to whether companies are getting the FTEs they “ESSENTIALLY, WE’RE DOING 4 expect or have been promised. So we have more experience with the discounted FTE model and subsequent milestones, but this A RISK SHARE ON Adrug discovery is not to say that we don’t consider all potential business models when putting together a results-based deal with our partners. COST-PLUS BASIS.” RC: At Pfizer, we look at two major classes of targets. First, there are credentialed targets, where we have proof- — BILL FARLEY of-concept in the clinic and we’re looking for a best-in-class approach. Then, there are targets without clinical proof-of- concept, so they’re looking to get a clinical candidate. Do the clients who approach you typically look at creden- tialed targets or uncredentialed targets? Does one approach fit better with your company’s model? SM: The clients approach us from a mix of fast followers on one dated target is that you have to pick holes through the minefield end to unprecedented targets on the other. It’s a combination of IP, which can be very difficult, but there are some very cre- of biological and target validation efforts to include in vivo tools, ative medicinal chemists on those programs at Evotec. With less with the goal being to find new indications or opportunities in that validated targets, you need some good, innovative technologies space. We believe it should be a mix of both to create new oppor- that are able to unlock those targets and find some novel chemical tunities that can sustain a long-term relationship. Early on in the matter. We have a good mix of these. collaboration until it reaches a steady state, we prefer a balance Let me try to give you some examples. We have put in place to sustain ourselves with a mix of known and unprec- edented an excellent hit-finding platform that we can use against many targets in the ratio of 70/30, with the intent to move this from 70/30 different targets. For example, for the highly interesting yet ex- towards 50/50 or 40/60. While the clients prefer to bring more tremely challenging CNS target, BACE, we’ve used our fragment- unprecedented targets, a lot of this depends on the scale of the based screening platform to identify some novel chemotypes that portfolio — three targets, six targets or nine targets — as it posi- we’re taking forward into optimization. Targets such as BACE tions us for different value propositions. have proven extremely challenging to unlock in the industry, but The second part of this is the fact that we are building ex- targets such as this fit well with Evotec — where we can bring to perience with particular expertise in both the translational and bear the power of our diverse, hit-finding platform. We can also pre-clinical space in differ- ent therapeutic areas. These can be use such tools on fast-follower targets as well. The oncology utilized for identifying/validating new targets in specific thera- target, HSP-90 is a good example. This is a target for which there peutic areas, like oncology, CNS/pain, metabolic dis- orders and is a raft of IP published, so the challenge is really finding some- infectious disease, where our structural biology experience can thing novel. Again, we were successful in achieving this. We did a play a major role. We would allow ourselves to a mix in ratio that fragment screen on HSP-90 and identified some novel chemical is appropri- ate to the client’s strategy around development and matter, which we were then able to partner with an Italian biotech commercialization while also allowing us to keep a sustainable re- company. This program has now advanced in to lead optimization ward structure. All of our announced collaborations have a range and multiple patents have been filed on the chemical structures. of validated to low-validated targets. So in summary, we have put the tools in place that can address both of those aspects, and then we bring them to a collaborator to establish a bal- anced portfolio with targets that carry good RC: With high-volume invalidated targets, the methodology, chances of success. infrastructure and skill sets are the same. When you get into the fast follower group, there are certain speed components BF: Let’s look at unprecedented targets as well as fast follow- which differentiate a best- in-class approach as opposed to ers, which are two different opportunities that serve some of our others and tend to be larger investments. assets. One of our biggest assets is Chemistry on Demand: a If customers are looking at these un-credentialed targets library of our collaborating systems. We have 1.4 million com- or fast followers, do your organizations have any particular pounds that are powdered and in vials on the shelf — in all, about expertise in one class over the other? 13,000 chemotypes, so we have a valid set of chemistry. All this chemistry being validated makes it easily tractable and scalable, SM: At Jubilant it’s equally balanced, particularly in the lead gen- so for either unprecedented targets or for follow-up chemistry, eration area. With unprecedented targets, we perform effectively it provides a rich field to mine for power shooting or getting a based on the experience we have had with the various tools in quick start on your discovery. This year, we will process probably the early discovery phase and the technology partnerships that another 200,000 compounds based on 2,000 new chemo types we continue to establish. We also work on fast followers in the all from rational design. We can accentuate small concentric sets more validated space, simply because most of these are in the to unprecedented targets and develop those probe sets rapidly lead optimization phase and serve as a good testing phase for our around fresh, IP-clean compounds to interrogate that target and collaborative capabilities while ensuring early wins for the model provide us a foothold. Follow-ups take a different set of skills — to sustain. usually the skill of a medicinal chemist. The medicinal chemist is MA: It has to be said that for the most part, people don’t out- experiential in nature. Even if someone has a post-doctoral in a source their easy targets, so Evotec tends to see challenging particular area, they may not have the ability to affect a compound targets. I think that it would be fair to say that we have an equal physiologically on some axis of opportunity in biology. Those two mix of more validated targets and less validated targets, and they opportunities are slightly different, and I would put a more skilled each carry a different risk-reward profile. Most of the risk of a vali- chemist on the hit follow up or the task of trying to uncouple ad- 20/20 Pharma
  5. 5. whitepapersditional leads.RC: Does your typical client portfolio tend to consist primar-ily of biotech companies? Who do you see as the client of “WE HAVE AN EQUAL MIX 5today, and how will that change down the road? OF MORE-VALIDATED TAR- drug discoveryMA: Firstly, our portfolio consists of companies ranging from vir- GETS AND LESS- VALIDATEDtual bio- techs up to the top 10 pharmaceuticals. However, in thespace of these risk- sharing or results-based deals, we see the TARGETS, AND THEY EACHlarge biotechs plus mid-size and large pharmaceutical companies.For example — as well as the collab- oration with Boehringer In- CARRY A DIFFERENT RISK-gelheim that I mentioned earlier — we also have ongoing collabo- REWARD PROFILE.”rations with Novartis and Roche. Normally, the smaller biotechsdon’t have the bandwidth in terms of multiple targets to bring toa collaboration, so the appetite for risk is less. We are, however, — Mark Ashtonseeing more and more deals with biotechs in this field, and thereis currently much hype in the industry around these types ofrisk-sharing deals. You have to wonder if some of the businessmodels being applied are sustainable, but without a doubt thereis increasing interest in these types of models and collaborations.We are also discussing some potential opportunities with venture-capital companies. These could be interesting deals that we areable to discuss a little further in the future.BF: The drug discovery process and the metrics of it are fairly tical companies, hoping for a lower cost base or a more efficientwell under- stood. It costs about $10 million for a large pharma- R&D process under a risk-reward model. We have gener- atedceutical company to produce a hit and go from first principle up leverage for such assets in our joint venture with Lilly in the pre-to Phase I studies. However, to go from candidate nomination clini- cal to POC space, which will be used for rapid drug develop-to distribution of the drug, it’s about $990 million. Increasingly, ment expertise. Using the CROs of Jubilant, we have been able topharmaceutical companies are concentrating on ways to better attract assets from third parties, as well as companies interestedcharacterize, understand and model their clinical trial processes. in using this shared risk model to grow their portfolio of assets toThey are looking toward outsourcing those opportunities in a proof-of-concept effectively.well-characterized fashion and trying to find partners that havethe abil- ity to provide assets that they can monetize further. RC: With academia and some of these hedge funds, thereLarge pharmaceutical companies will drive more and more of their is no competition internally. However, in the com- petitivediscovery portfolio externally. For instance, Burke announced in space, most companies will claim they have the “smartestOctober that they were going to drive at least 25 percent of their chemists” or the “most experienced biologists.”portfolio externally in the next five years. When you meet with a large pharmaceutical client, what do It’s hard for biotech companies to find funding and opportuni- you say differentiates you from other service providers?ties and to go forward. Several venture-capital people have pre-dicted that over the next 18 months the number of dated materials BF: From the perspective of biotech versus large pharmaceuti- cal compa- nies, we need to work faster, better and smarter. Atthat will become available will be over 1,000. Those companies ChemDiv, one of our advantages is our ability to “have bootsand those assets will be looking for favorable terms, probably with on the ground,” so we have a critical mass of about 550 peoplelarge pharmaceutical companies, and we will work with them to working and are able to use U.S.-based project management. Weintegrate these discovery opportunities. have a technology center based in San Diego, Calif., which allowsSM: While major pharmaceutical companies are an important us to do quick response and fast transfer of materi- als. We alsodriver of this type of portfolio business, particularly in the risk- have the advantage of working offshore and providing some costsharing model, there are other players as well. We not only have advantages of a waiver by working in Russia, where we have arelationships with large pharma- ceutical companies including Lilly state- of-the-art facility.and Amgen, but also with mid-size com- panies like Forest. We believe our chemistry library gives us a six-to-nine month We have partnerships with academia, which is looking at cre- head start. If someone is synthesizing compounds to begin a proj-ating more value for enabling technologies and assets. We have ect without a library, it puts them behind and doesn’t give them thea relationship with Duke University, in which we access Duke’s advantage of new IP space. We have successfully done this andinvestigator technologies to help go through the pre-clinical phase. have a track record to prove it. In one of our projects, for instance,Academia is now beginning to use some of its available tech- there were some assets that were not able to be transferred be-nologies and resources to move opportunities eventually in such cause they were owned by a third party. We were able to take thatpartnerships. They see the pharmaceutical companies being the project under our umbrella, manage the third-party pro- vider, andbiggest sponsor, usually at the pre-clinical stage, after complet- integrate that into a seamless drug discovery process that didn’ting validation or with someone like Jubilant. consume our partner management assets in the process. In addition, there are a large number of distressed assetsbuilding into the landscape, from biotech companies running outof funding to hedge funds trying to pull the money out of the mar- RC: Three things I’m hearing that stand out are: critical mass and experience, U.S.-bases with a tightly integratedket. We have seen traction here in the last two or three months for offshore subsidiary, and unique assets.such partnerships increasing, wherein some firms are willing to What are these unique assets and differentiators that a com-invest in a plug-and-play portfolio, in partnership with pharmaceu- 20/20 Pharma
  6. 6. whitepapers pany can offer? SM: Our first and foremost asset is people. We look at this as being a judgment-driven, portfolio-driven approach, and the busi- “PEOPLE AND THEIR JUDGMENT-MAKING 6 ness model is based upon successfully managing the attrition process. Therefore, people and their judgment-making capabili-drug discovery ties become extraordinarily important for us. We have brought together a group of people who have managed portfolios in a combination of pharmaceutical, biotech and academic environ- CAPABILITIES BECOME ments; people who bring a deep understanding of making the right EXTRAORDINARILY IMPOR- type of judgment. Our leadership, both at the senior level and proj- ect level, is based on people who have come back to India from the West. Instead of trying to make it a U.S.-centric approach, TANT FOR US.” we have moved people from the U.S., Europe, Japan and other places to Bangalore, India, and other sites where we operate. Our group is not afraid of failing. They make judgments, both in collaboration and independently, to lead projects successfully. All of our people have experience in different aspects of discovery, — Sri Mosur pre-clinical development or development. They also bring a tre- mendous amount of therapeutic understanding of biology, as we do not want to confine our strengths toward medicinal chemistry only. With our bioinformatics platform and our ability to understand therapeutically aligned clinical and pre-clinical biology, we are able to generate knowledge in order to be successful in integrating and delivering the portfolio. The second differentiator is the technology platforms. In The third area I want to mention is our technologies. Here I order to enable our people, we provide them access to as many want to go back and use, as an example, the diverse hit-iden- technology platforms as possible, both internally and through our tification technology at Evotec. Like ChemDiv, we also have an partners, within limitations. internal library of small molecules that we add to annually. We The third differentiator is our evolving culture. We have de- also ensure that we routinely analyze all of the compounds to veloped a culture of transparency and collaboration among our ensure their chemical purity and integrity. We screen them using people. We don’t try to claim that we could do everything, but our in-house, ultra-high-throughput screening platform that we’ve rather that we need to col- laborate and access the institutional developed together with our pharmaceutical partners, Pfizer, GSK knowledge of our partners to be successful. As a young company, and Novartis. In addition, we have a fragment screening platform we do not have the institutional expertise of someone like Pfizer. that we can use if the target is be amenable to a high-throughput Operationally, we are a global CRO with facilities in Europe, screening approach. Our fragment screening technology utilizes the U.S. and India. We have generated great efficiencies in bioassay and NMR- based screening technologies. We are one of logistics, supply chain, IT infrastructure and communications, and the only companies that is able to access such a diverse platform our chemistry group can ramp up or down based on the need of of hit-finding technologies. In addi- tion to this, we have a strong a project. Between our two sites in India, Bangalore and Noida, molecular modeling department that can use virtual screening we have about 900 people in discov- ery chemistry, biology and methodology also to screen targets for new hits. Our investment in pre-clinical aspects, with an additional 450 in the translational and our technologies plus our people and track record is part of what clinical development space. This type of synergy and ability of differentiates us from our competitors. people with access to technology and platforms makes us more efficient and differentiated for scale and success. RC: The risk-sharing model is a relatively new phenom- MA: There are three areas where Evotec is truly differentiated enon, and it’s difficult to say whether or not this model will be from other companies in our space: track record, people, and our any more financially or scientifically successful than previ- platform and technologies. In terms of track record, we know what ous models. it takes to progress com- pounds into the clinic. For example, we What metrics do you use to monitor the progress of a are currently running five clinical programs within the CNS space. program so that the client feels their investment is Outside of that, we’ve taken over 10 compounds into the clinic for worthwhile? our clients. So we know what it takes to be able to push targets, push compounds from the target into the clinic. SM: We built a governance process that involves a more cre- ative management of the portfolio rather than strictly following Secondly, people. We have strong expertise in biology and everything “by the book.” We have a three-tiered structure that chemistry. We became one of the first CROs in the space to truly is involved in almost every partnership we have. First tier is the integrate chemistry and biology when Evotec acquired Oxford management-level team that meets once every six months to Asymmetry in 2000. Our scien- tists have experience of taking understand the collaboration and its impact on the portfolio. It’s a compounds into the clinic either at Evotec or at pharmaceutical very objective approach, and all of our partners have also been companies and in various therapeutic areas. We also recognize very objective in approaching this. The metrics at the manage- the need of the industry to access more cost-efficient solutions, ment level is the impact on the portfolio, which could be defined so we have a joint venture in India with a company called RSIL, in multiple ways. What is the most cost-effective and scientifically where we do all of our parallel synthesis activities. This gives us a driven portfolio that you can achieve that could be defined by the unique position of being able to offer to our collaborators a com- number of candidates you deliver to the portfolio per year? The bination of experienced drug hunters and access to cost-efficient approach on this is primarily driven by the fact that we are not resources. 20/20 Pharma
  7. 7. whitepaperscompeting in the CRO space. been used, but it is more dependent on meeting the objectives of When we take on any of these collaborations, we look at the the critical success factors and the timeline. The approach heretarget or the therapeutic area competing in the global marketplace is also defined by the fact that some of the collaborators are verythat our part- ner would compete with. The management commit- particular about the quality of the science, information, inter- pre- 7tee would look objectively at the quality of the science relative to tation and judgment capabilities. The raw data is uploaded and drug discoverythe therapeutic area and the productivity, resulting in a number the interpretation is always discussed to identify and measure theof candidates impacting the portfolio. We recognize the fact that quality of the people and the science as it is within Jubilant.attrition can also occur by way of decisions made in our partner’sportfolio, despite the fact that we reach and meet all of the critical RC: Let’s focus on just the senior level assessment ofsuccess factors. The management group defines and manages decision-making. What are the criteria used to decide if athe expectations around the quality of science, as well as the particular program isn’t making progress?impact on the portfolio financially. The second tier is the scientific steering team that focuses on MA :The focus is very much on quality rather than quantity, anddeveloping the scientific strategy and leveraging the strengths we don’t work in isolation — everything is done in collaborationand capabilities within the collaboration. This group also governs with the customer. When we’re looking at the progress of a target,any of the potential conflicts, issues and variations to the science we’ll review the program in terms of pre-agreed timelines — thatas it develops, and defines the progres- sion of each stage of is, timelines that we set at the beginning of a program. We jointlyany portfolio at any given point. This team meets once per month agree with our collaborators what are the expected timelines to(mostly via teleconferences), typically for a two-hour review. The the various value inflection points, be they lead optimization, dem-third is the project team, which executes the projects specific to onstration of in vivo proof of concept or pre-clinical development.the operational level of the scientific activities that include re- We set expectations, regularly review progress against those, andsourcing and logistics. This would be managed by the owner of we can clearly see if it’s taking longer than we thought or is aheadthe project at both ends. Of late, the collaborators are building in of schedule.dedicated teams to manage this process at their end. This project We’ll look at what the key criteria are that we want to achieveteam works closely with the collaborator and produces a combina- throughout a program. If we’re aiming for a pre-clinical develop-tion of weekly or biweekly reports. There are project meetings that ment candidate, we’ll look at what the therapeutic area is andtake place weekly, and sometimes fortnightly, but typically on an what we want the candidate to look like — for example, its efficacyas-needed basis as agreed between the project teams. There are or its pharmacodynamic profile. We’ll track criteria against a trafficdifferent productivity metrics, but ultimately the effectiveness of light system so we can review the progress regularly and clearlythe portfolio determines it. In addition to scientific reports, we have see if we’re addressing the key criteria. We encourage our col-a transparent approach to providing the number of FTEs that have laborators not to be shy about terminating ineffective programs. 20/20 Pharma
  8. 8. whitepapers 8 That is a strength that we bring to the table: being able to kill “AND AT PFIZER WE things quickly is sometimes far better than expending resources on something that is not going anywhere. Having an objective out-drug discovery look, setting goals and timelines, and identifying key asset criteria for the programs provide a clear focus for the collaboration. LOOK AT TWO MAJOR BF: We heavily rely on structured collaboration — setting ex- pectations at the onset and drafting an appropriate research plan that has the governance of critical success factors. We also have CLASSES OF TAR- a flat management structure, so the scientific-portfolio manager is a stakeholder. He or she reports directly to senior manage- GETS... CREDENTIALED ment and is intimately involved with everything that is going on in the project. We typically sit down with our clients face-to-face TARGETS AND TARGETS while creating this workspace and understand the communication portals and reporting criteria. This allows us to set those expecta- WITHOUT CLINICAL tions at the onset, so we can critique the process, whether it be on a weekly, bimonthly or a quar- terly basis, depending on the PROOF-OF- CONCEPT.” client’s needs. We like to have governance with the joint steering committee and input from the client, because discovery has to be a dynamic process. There may be publications or patent filings — Rick Connell dur- ing the course of our anticipated collaborations, and we may have to adjust what we’re doing to reassign resources. Keeping these processes “flat” and maintaining direct communication with our partners is key to making profits as transparent as possible, and helping us understand exactly what the cli- ent needs and when they need it. RC: Let’s look into the risk-sharing world of hits to leads and leads to candidates. If you were a client looking to as- Schering, and Nerviano Medical Science, to name a few. Those sess the marketplace, what information would you seek from organizations can work on development and we can do the heavy a service provider that would help inform this decision? lifting for their success. This is a small environment, and nothing MA: Ultimately, you want to be sure and confident in whom you travels faster than bad news. Focusing on particular target areas are placing your money with. If I were a client, I would want to see — like CNS, oncology, anti-infective and metabolic — presents what programs run within the service provider so that I could un- our company in the best light. derstand how the company has progressed the programs to vari- SM: I would look to the partner who would be aligned to both the ous decision-gates or critical success factors. Chemistry is easy strategic and operational objectives, including alignment to the to evaluate alone, but what is the turnaround time of chemistry to market strategy. It’s important because this sort of relationship biology? Clients want a rapid turnaround of compounds made and does not have any short- cuts or easy exit options once you get tested, and to be able to understand a company’s experience in into this. Even to demonstrate the first experiment is a potential evaluating SAR (structure-activity-relationship) data, ADMET data, three-year curve where attrition has to play out in the sponsor’s and the PK profile of a compound or series of compounds. I would favor, not to mention enabling the provider and the partner at the want to know the level of experience of their chemists or biologists other end. It’s important to align from a strategic, scientific and in interpreting such data. Can this experience be demonstrated? operational perspective, and be flexible. The partner should have I would also want to know what the main challenges are for flexibility to absorb technology, branch out and take risk as ap- them and how they are going to overcome them. All companies propriate. Therefore, alignment to the strategy, scientific, business have an Achilles’ heel — areas that are not as strong as others and operational goals is extraordinarily important. — but the key is how they make progress with their strengths and Secondly, this is a very risky environment. You need to have high- weaknesses. In some cases, it’s not realistic to try to cover as quality people with a mix of experience, particularly with the ability many therapeutic areas as possible. Companies have to be brave to make judg- ments beyond lead generation. Strategic, functional and declare what their area of expertise is, and where they have and operational lead- ership are all important parts of how you more or less experience. I would want to place my bet with a com- would identify the company. pany that has the experience in a relevant, specific therapeutic Lastly, you need to look at the partners’ ability not to conflict area and that has demonstrated success in carrying out integrated with your goals. In this space, you’re not looking at two compatible chemistry and biology projects in the past. CROs try- ing to compete for efficiency; you are actually creating BF: Drug discovery is an experiential art form, so I would look at a portfolio that would compete in the marketplace with equal com- what those companies have done recently, and who they’ve done panies. Therefore, the partners should be devoid of any potential business with. For example, ChemDiv has announced collabo- conflict in pursuing these tar- gets or relationships. These are the rations with Schering Plough, Merck, Eli Lilly, Genentec, Bayer three things I would look at if I were to pick a partner in the space. 20/20 Pharma

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