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Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
Myth Or Fact Productivty Challenges In R & D2
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Myth Or Fact Productivty Challenges In R & D2

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  • 1. Myth or Fact: How do We Address the Productivity Challenge in Pharma R & D ? Dr Harsukh Parmar Executive Director, Global Discovery Medicine, Respiratory & Inflammation Therapeutic Area harsukh.parmar@astrazeneca.com Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 2. Contents 1. Issues Facing the Industry 2. Different Models for Pharma R & D Portfolio 3. Risk Management, Risk-Benefit & Cost-Effectiveness 4. Some Clues to Reduce Attrition. Improve Portfolios. 5. Changes in Pharma Operating Models 6. Portfolio Management & Optimisation Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 3. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 4. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 5. Falling R&D productivity: NDAs and NMEs approved by the FDA (1996 – 2003) 140 45% decline in number of NDAs approved 120 100 FDA approvals 80 60 60% decline number of NMEs approved 40 20 0 1996 1997 1998 1999 2000 2001 2002 2003 NDAs approved NMEs approved Source: Datamonitor, FDA Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 6. It is not all Bad News. Biologics/Vaccines are Succeeding ! Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 7. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 8. Time lag between introduction of the pioneer product and its first competitor 1965 - 1999 (UK) 80 • 74 60 • 52 • 54 40 • 31 • 25 20 Months • 3 1965- 1970- 1975- 1980- 1985- 1990- 1995- 1969 1974 1979 1984 1989 1994 1999 Source: Pharma Strategy Consulting AG Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 9. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 10. U.S. Drug Industry R&D Expenditures and Drug Approvals, 1963-2000 60 27 R&D Expenditures R&D Expenditures (Billions of 2000$) NCE Approvals 40 18 20 NCE Approvals 9 0 0 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 R&D expenditures adjusted for inflation Source: Tufts CSDD Approved NCE Database, PhRMA Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 11. Global pharmaceutical R&D expenditure (1993 – 2007p) 70 60 Global R&D Expenditure (US$ bn) 50 40 30 20 10 0 1993 1995 1997 1999 2001 2003 2005p 2007p Year P - Projected figures have been calculated based on an average annual growth in R&D expenditure between 1997 and 2002. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 12. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 13. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 14. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 15. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 16. Low levels of innovation: NIHCM analysis 2002 IMDs (old active Priority (provide clinical ingredients identical to improvement over currently products available on the NMEs marketed products) US market) New active 24% ingredients 35% 76% 54% 11% Standard (no significant clinical improvement over currently marketed products) Old active ingredients (differ in dosage form, route of administration, combined with other active ingredient) Source: FDA 2001, NIHCM report “Changing Patterns of Pharmaceutical Innovation” 2002 Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 17. Pharma history characterized by consolidation T a b le 1 : M a jo r in d u s t r y c o n s o lid a t io n e v e n t s 1 9 8 9 – 2 0 0 3 C om pany A C om pan y B Year B io g e n - I D E C B io g e n ID E C 2003 P f iz e r P f iz e r P h a rm a c ia 2002 B r is t o l- M y e r s S q u ib b B r is t o l- M y e r s S q u ib b D u -P o n t 2001 P f iz e r P f iz e r W a rn e r L a m b e r t 2000 G la x o S m it h K lin e G la x o W e llc o m e S m it h K lin e 2000 P h a rm a c ia P h a rm a c ia & U p J o h n M o n s a n to 2000 A s t ra Z e n e c a A s tra A B Zeneca 1999 S a n o f i-S y n t h é la b o S a n o fi W in t h ro p S y n t h é la b o 1999 A v e n t is H o e c h s t M a r io n R o u s e ll R h ô n e - P o u le n c 1999 W y e th W y e t h L a b o r a t o r ie s A y e r s t L a b o r a t o rie s 1997 N o v a r tis C ib a -G e ig y Sandoz 1996 H o e c h s t M a r r io n H oechst M a r io n M e rr e ll D o w 1995 G la x o W e llc o m e G la x o W e llc o m e 1995 P h a rm a c ia P h a rm a c ia U pJohn 1995 S m it h K lin e B e e c h a m B e e c h a m G ro u p S m it h K lin e B e c k m a n 1989 B r is t o l- M y e r s S q u ib b B r is t o l- M y e r s S q u ib b 1989 S o u r c e : D a ta m o n it o r D A T A M O N I T O R Other Recent Mergers/Acquisitions •Sanofi & Aventis •Roche majority purchase of Chugai •Merck AG offer for Schering Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 18. REGIONAL PLAYER CONSOLIDATION Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 19. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 20. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 21. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 22. Market value shift to new models Market value CAGR (1992-02) 30% 30% 27% 25 21% 21% 20 15 12% 10 5 0 Top 20 Primary Care Specialty Biotechnology Generics Pharma focused players (e.g. Novo (e.g. Amgen, (e.g. Teva, Eon) (e.g. King, Nordisk, Genentech) Forest) Schering AG) 22 Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 23. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 24. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 25. Main Reasons for Termination of Development for “Opportunity Cost” is LACK OF EFFICACY! ONE SIZE DOES NOT FIT ALL ! Clinical Safety Toxicology 20.2% 19.4% Clinical Pharmacokinetics/ Bioavailability 3.1% Other 6.2% Preclinical efficacy 3.1% Preclinical Pharmacokinetcs/ Various Bioavailability 10% 1.6% Formulation Portfolio 0.8% Considerations Patent or Commercial 21.7% Clinical Efficacy Legal 0.8% 22.5% Regulatory 0.8% Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 26. RISK AVERSION VERSUS RISK MANAGEMENT RISK AVERSION / AVOIDANCE RISK MANAGEMENT •Little risk tolerance •Create transparency in risk •Closed mindset •Open mindset •Potential lost opportunities •Create new opportunities •Negative attitudes •Make informed choices •“Glass is always half empty” •Positive attitude •Never fail attitude •Allow to fail on risk tolerance •Learning is limited •Learning is enhanced •Innovation is limited •Innovation is enhanced •Personal Growth is limited •Personal Growth is enhanced OUTCOME OUTCOME •Become a generics company •Establish a successful pharma Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 27. What is a Pharma R & D Portfolio ? 1) A collection of products that have reached the Market 2) A collection of investigational compounds in Development 3) A collection of projects in Discovery 4) A collection of Disease Area Investments to yield Future Projects 5) A collection of assets in the form of Patents, IP, Copyright etc 6) A collection of People with Ideas for Future Projects and Products 7) A collection of Tools & Technologies to Leverage the Ideas THE SEVEN PILLARS OF SUCCESS OR FAILURE Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 28. How do you optimise a Pharma R & D Portfolio ? !GET ANY PART OF THESE ASPECTS WRONG AND FUTURE SUCCESS IS COMPRIMISED !GET ALL SEVEN PARTS OF THESE ASPECTS RIGHT AND YOU WILL GUARNTEE SUCCESS and also !YOU WILL HAVE DISCOVERED NIRVANA !! “THE 7 PILLARS OF WISDOM IN PHARMA R & D” !GET SOME PARTS OF THESE RIGHT AND THERE WILL BE SUCCESS OR FAILURE TO A GREATER OR LESSER EXTENT !IT IS A TRUISM TO SAY NO COMPANY HAS GOT ALL 7 ASPECTS FULLY OPTIMAL but there are some clear signals, clues about how some of these aspects can be optimised Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 29. What are the Risks in Pharma R & D ? These can be divided into a number of categories •Risks associated with Target Validation !What level of validation is sufficient at each milestone? •Risks associated with Discovery & Attrition !How do you identify effective, safe compounds (CD) ? •Risks associated with Development & Attrition !How do you prove clinical effectiveness and safety? •Risks associated with Manufacturing (GMP) !How do you prove that Cost of Goods is manageable ? •Risks associated with the Market Acceptance (cost-effectiveness) !How do you prove your drugs are commercially attractive? !Are they fully differentiated from currently available drugs Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 30. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 31. The comparison between Targets in the years 2001 and 2005. Shows the influence of Genomics on drug discovery. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 32. Drug Targets in the Genome Assumption: wider phenotypic screening will identify a greater number of therapeutically-relevant genes? Therapeutically Predicted + Human genome relevant genes assumed ~30,000 ~6000 + 20% druggable overlap targets ~3000 +~3000 = ~6000 Small Mol 6000 Targets for Drug targets Large Molecule Therapeutics ~1200 Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 33. Optimise Target Validation/PoP/PoC Correct Choice of Target It would not be possible to overstate the value of in-vivo human validation. Most of what passes for target validation today is largely conjectural in relation to the disease in question. Diabetes Professor & Researcher Harvard Medical School A Revolution in R & D-The Impact of Genetics The Boston Consulting Group Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 34. Human TV Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 35. Serendipity is still important in R & D Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 36. But serendipity…………. …is chance driven ....is not a planning tool Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 37. More Predictable Drug Discovery Kinase Proportion of drug discovery effort Difficult < 25% (Protein - protein) (Protein - protein) Drugable > 75% (GPCR, kinases Undesirable proteases, Nuclear R) < 5% GPCR (Cytokine R, (Cytokine R, GF-R) GF-R) Do-ability of Target Classes Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 38. No Targets Attrition rate (%): 100 initiated •chemical •biological annually •selection of target •efficacy Target •safety & interactions •failure to meet target profile Hit Antibody 40 (2-3 years) Target & concept LC Small molecule validation (6-8 years) 20 Lead preCD CD IND discovery Lead 10 optimization 50% 50% 40% 15% 20% 1 2 Year 4 4.5 5.5 CD prenomination No Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 39. Probability of Success to Market by Therapeutic Area – Industry Success Rates by TA Progression-Decision Methodology 120% 100% 100% 94% 93% 90% 83% 80% 80% 77% 74% Anti-infective 68% 69% Musculoskeletal Alimentary and Metabolism 60% Cardiovascular 52% 51%52% Anticancer Nervous System Respiratory 39% 41% 40% 36% 29% 26% 24% 20% 16% 19% 20% 13% 16% 12%12% 12% 8% 0% First human dose to market First patient dose to market First pivotal dose to Market Submission to Market From Industry Success Rates 2004, CMR International, May 2004: Using the “Decision-Progression” methodology to calculate probabilities of success to market demonstrates a similar profile by therapy area as that produced using the “CMR Success Rates” methodology, with Anticancer NASs demonstrating the lowest probabilities of success from all Phases to market, and Alimentary & Metabolism and Musculoskeletal NASs demonstrating the highest probabilities of success to market from Phase III and from Submission Methodology – CMR Success Rates Method Probabilities of Success were calculated using the proportion of decisions resulting in progression for each phase, based on NASs where a decision was taken either to progress or terminate the NAS between 1994-2003 within 34 companies (see Appendix 2 for full methodology). 148 Cardiovascular, 151 Anticancer, 275 Nervous System and 124 Anti-Infective NASs are represented in this analysis. Please note that some NASs reached a decision point in more than one phase of development during the time period considered. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 40. Composite median cycle times for new development projects (2001-2003) by therapeutic area First toxicity Dose to First Human dose First Human dose to First Patient dose First Patient dose to first Pivotal dose First Pivotal dose to first submission 1.0 1.7 2.8 2.5 Anti-Cancer (38) (29) (12) (5) 8.0 0.9 1.5 2.2 2.3 Musculoskeletal (27) (12) (3) (7) 7.9 0.8 1.8 3.9 2.1 Nervous System (75) (40) (12) (6) 8.6 1.0 1.4 2.8 2.2 Cardiovascular (26) (19) (2) (5) 7.4 Anti-Infectives 0.6 1.0 3.0 1.7 6.3 (32) (12) (6) (3) 0.9 1.5 4.2 3.7 10.3 Respiratory (24) (18) (1) (3) 1.0 1.2 2.3 1.9 6.4 Alimentary & Metabolism (47) (25) (6) (3) Total 0 2 4 6 8 10 12 Duration in years Composite profiles are created by combining values for each interval completed by new development projects during 2001-2003. n = interval duration in years, (n) = number of projects that completed each interval. Data are shown for new development projects where the start and end milestone dates for the interval are available. Each interval represents a different cohort of projects. For explanation of the composite profile refer to methodology figure 0.2. Dr H Parmar From CMR 2004 Global R&D Programme Executive Director, Global Discovery Medicine, Astrazeneca
  • 41. Probability of Success to Market by Mode of Action CMR Success Rates Methodology Perspective"Insight"Opinion 100% 100% Novel mode of action Established mode of action 90% 86% 80% Probability of Success 70% 68% 60% 56% 50% 40% 33% 30% 23% 20% 15% 9% 10% 0% First human dose to market First patient dose to market First pivotal dose to market Submission to market Source: CMR International Audited data Confidential Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 42. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 43. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 44. Proactive portfolio/ franchise building is critical to growth Pharmaceutical Industry - Illustrative Growth by Strategic Activity 700 600 500 Discovery Deals $bn 400 M&A 300 Licensing 200 In-house 100 0 1980 1990 2000 2010 Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 45. Virtual pharma offers a strategic alternative “These (companies) might look nothing like the pharma giants of old, the huge, vertically integrated centenarians that historically had done everything from basic research through development, manufacturing, marketing, and distribution.” Source: Fagan & Hayes • Cost savings achieved through: Virtual – Minimisation of bureaucracy Pharma – Higher utilisation of fixed resources – Acquisition of resources only when needed Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 46. Partnerships/Licensing – Major Pharma as system integrators in product blockbuster production-A model for future pharma? Initial Now Monopolistic studios Free-market talent integrators Development/ Development/ Production Promotion Distribution Production Promotion Distribution Financing Financing Central Finance, Admin, Manufacturing • All functions performed by six • Major studios play role of “systems major US studio houses integrators” to deliver box-office hits Sourced i15 mini-major studios i “Free agent” actor market Contracted global i50-80 major independents global talent i Single movie and movie series content contracts i1,200+ minor independents Contracted Licensed Blockbuster “star” independent Production actors studios i Big screen and broadcast i Screen writing - 1/3 studios, talent base draw Sourced 2/3 independents Contracted independent “emerging” script actors writers 46 Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 47. Risk Management Framework Risk Language Understand Identify • Context !Map Context • Opportunities !Engage Stakeholders • Boundaries • Threats !Agree Scope & Objectives Review Outcomes/ Learning Manage Assess • Plan !Risk Management Plans • Consequences !Benefits !Enabling Resources !Impacts !Monitoring & Reporting • Review& Learning • Likelihood !Review overall outcomes !Learning Review !Sharing Learning Culture and Values Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 48. Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 49. People & Culture How to Succeed in the Brave New World • “But putting the right electronic links in place is only half the battle; the other is creating the right human links.” Pharma 2005: An Industrial Revolution in R&D, (1998) PricewaterhouseCoopers • Get the right people » Technical or domain skills & knowledge are crucial » Behavioral competencies-collaboration across-many functions. Disappearance of silos, reporting lines » Where possible, build your organization around the strengths of your people • Create a corporate learning culture that values clear, transparent two-way communication across R & D Discovery Development Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 50. Risk- Getting Risk-Management right in a portfolio is critical to driving top performing sales growth. Move top projects to the next level Portfolio Optimisation $ Sales Move the majority of projects closer to the level of top performing projects $ Potential Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca
  • 51. The Drive to Improve R&D Effectiveness -- Industry Goals • Increase products in the pipeline • Cut research and development times • Reduce late stage failures (Particularly Phase III) • Improve “quality” decision making at each milestone • Contain R&D costs - Increase the cost-effectiveness • Increase the sales and return on investment • Decrease Opportunity Costs & Marketing Costs • Market Niche or Mass Market Products with Appropriate Sales/Costs Ratios Dr H Parmar Executive Director, Global Discovery Medicine, Astrazeneca

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