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Partnering with Pfizer 6






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Partnering with Pfizer 6 Partnering with Pfizer 6 Presentation Transcript

  • Partnering with Pfizer 6th Annual Rice Alliance Life Science Technology Venture Forum Dr B J Bormann, Vice President Strategic Alliances June 6th, 2007
  • Last Year Jury Duty, last person in the pool of 200, interviewed at 5 pm Selected as an alternate for jury, ‘medical condition’ civil trial Closing arguments, juror was ill Chosen as replacement Deliberations – I was alone in my opinion, needed to convince fellow jurors – Do you remember “Twelve Angry Men?” All took > 2 weeks Cancelled my presence but not my presentation last year You saw my slides presented by Dr. Ajay Gautam, a Rice alum. I have mostly new slides for you this year
  • “Pfizer has had a long history of great innovations, but it recognizes that no single company has a monopoly on good ideas. To build on and complement its strengths, Pfizer actively seeks out alliances.” William Steere, Former CEO of Pfizer 1999 Agenda Today: A wee bit of Pfizer Propaganda A Flash review of challenges to the pharmaceutical business The evolution of Pfizer by Alliances Biologics Diagnostics New Paradigms Scripps The Pfizer Incubator
  • Pfizer History Charles Pfizer Charles Erhart ! "# $% & '! ( )
  • Pfizer Products 2007 Key Products by Therapeutic Area Ophthalmology Central Nervous System Xalatan Macugen Cardiovascular/ Aricept Metabolic Cabaser Dilantin Accupril/Accuretic Geodon/Zeldox Glucotrol/Glucotrol XL Endocrine Inspra Lyrica Mirapex Lipitor Genotropin Norvasc/Istin Neurontin Somavert Rebif Procardia/Procardia XL Relpax Tikosyn Xanax XR Exubera Zoloft/Zustrel Women’s Health Depo-Provera Infectious Disease Oncology Diflucan Urology Camptosar Sulperazon Ellence/ Unasyn Cardura/Cardura XL Pharmorubicin Vfend Detrol Aromasin Viracept Viagra Sutent Zithromax Zyvox Allergy/Respiratory Pain/Inflammation Spiriva/Daxas Celebrex/Celebra Zyrtec/Zyrtec D Bextra Source: Pfizer 2006 Year-End Corporate Earnings Release Dynastat
  • R&D Results – Pipeline Growth Precli nic Phase al & 154 New Molecular Entities 1 Phase 102 2 Phase 33 3 8 In Reg istrati on 63 11 27 12 July 2003: 4 106 NMEs 6
  • Candidates in Advanced Development Metabolic Diseases Exubera Diabetes- APPROVED Inflammation & Immunology Parecoxib Acute Pain Allergy & Respiratory Sildenafil PAH Pulmonary Arterial Hypertension Torcetrapib/Atorvastatin Atherosclerosis- Cardiovascular FAILED Neurosciences Varenicline Smoking Cessation-APPROVED Asenapine Schizophrenia Oncology SU-11248 GIST, Renal Cancer-APPROVED Edotecarin Colorectal Cancer Infectious Diseases Zithromax/Chloroquine Malaria UK-427,857 HIV
  • Exubera Diabetes Efficacy Studies Complete Long Term Pulmonary Safety Studies Continuing
  • Varenicline – Alpha 4-Beta 2 Partial Agonist Smoking Cessation Orally Effective Nicotinic Partial Agonist Reduces Nicotine Cravings 1.3 Billion Smokers Worldwide Average 50% Continuous Quit Rate After 12 Week Treatment Compared to 12% With Placebo
  • UK-427,857 HIV Entry Inhibitor HIV Cell Entry Inhibition First-in-Class First-in-Class Selective, Reversible Binding to the CCR-5 Receptor CCR-5 Excellent Pharmacokinetics and Selectivity Potent In Vitro Activity Against Resistant Strains No Drug-Drug Interactions Drug-Drug
  • SU-11,248 Cancer Inhibits Tumor Vascularization Multi-Targeted VEGFR Multi-Targeted Kinase Inhibitor Remarkable Efficacy Seen in Gastrointestinal Stromal Tumor and Renal Cell Carcinoma Cancers Disrupts Tumor Survival
  • CTLA-4: Ticilimumab Oncology Cyctotoxic T Lymphocyte- Lymphocyte- associated Antigen-4 Antigen-4 Antibody CTLA-4 Blockade with CP- CTLA-4 CP- 675,206 May Break Peripheral Immunological Tolerance and Induce Anti-tumor Activity Anti-tumor Currently Conducting Phase III Study Using Multiple Doses
  • *+, " +- , * Toronto, Canada Shanghai, China Seoul, Korea La Jolla, CA, U.S.A. Rinat Labs St. Louis, MO, U.S.A. Sandwich, Singapore ENGLAND Sydney, Australia Cambridge, MA, U.S.A. New London and Groton, CT, U.S.A.
  • R&D Therapeutic Areas ! " " # $ % % * Pfizer has exited ‘research’ in Dermatology and GI
  • Pharmaceutical Industry Challenges
  • High Attrition Rate in Drug Development Thousands of Compounds Screened . // , & "(( High Risk Process Preclinical Pharmacology ~250 ~250 12-15 years, ~$900MM/candidate Preclinical Safety ~5 ~5 0 Clinical Pharmacology & Safety Discovery Exploratory Development Full Development Phase I Phase II Phase III 0 5 10 15 Idea 11 - 15 Years Drug
  • Generic Substitution August 2, 2001 - Barr Laboratories cleared to ship generic version of Lilly’s Prozac By September 2001, 80% of Lilly’s Prozac sales were taken by Barr Laboratories substitute product Key products representing >$50 billion are set to lose exclusivity in 2007 - Decision Resources, May 2003
  • Shrinking Market Exclusivity Innovative Drug / 2nd Generation Year Introduced Drug/Year Inderal - 1965 Lopressor - 1978 Tagamet - 1977 Zantac - 1983 Capoten - 1980 Vasotec - 1985 Seldane - 1985 Hismanal – 1989 AZT - 1987 Videx – 1991 Mevacor - 1987 Pravachol – 1991 Prozac - 1988 Zoloft – 1992 Diflucan - 1990 Sporonox – 1992 Recombinate - 1992 Kogenate – 1992 Celebrex - 1999 Vioxx– 1999 Vioxx– 0 1 2 3 4 5 6 7 8 9 10 Years of Exclusivity for Innovative Drug
  • Productivity Challenge $35 % +- , ) & # 12 3 $30 $25 $20 $15 $10 # NCEs $5 60 40 20 $0 0 2003 1990 1995 2000 1970 1975 1980 1985 Source: 2004 PhRMA Annual Survey, 2003/2004 PAREXEL’S Pharmaceutical Industry Sourcebook Source: 2004 PhRMA Annual Survey, 2003/2004 PAREXEL’S Pharmaceutical Industry Sourcebook
  • Adding Value: Pfizer Strategic Alliances
  • SA supports a fully Integrated R & D Process Target Validation Compound Screening Target Identification Human Trials Strategic Computational Chemistry Alliances In Silico Modeling Animal Studies Toxicology Lead Optimization
  • Adding value: the SA vision Our alliance investments are: Integrated and aligned with our global strategies, initiatives and internal investments Address opportunities and gaps to create competitive advantage Enable the low-cost evaluation of novel opportunities Provide access to novel technologies with the potential to change the current R&D paradigm Managed with respect to the science, business, legal and IP issues Assessed and monitored with appropriate metrics “Cradle to grave Alliance Management”
  • Therapeutic Biologics Relative Maturity of Biologics Market Segments Recombinant proteins Prophylactic vaccines Change in Insulin & erythropoietinsare Insulin & erythropoietin growth Over 100 products Over 100 products market leaders market leaders currently in development currently in development rate $32.6B $7.3B mAbs Gene Antisense Size indicates relative therapy Therapeutic potential market size* vaccines Cell therapy Relative level of platform validation (time)
  • Growth of Pfizer’s Biologics Portfolio From a single program in 1996 to over 25 programs today, Pfizer continues to increase its Biologics Portfolio. 30 25 20 15 10 5 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
  • Expanding the Scope of R&D Future Biologics Powerhouse (pegvisomant for injection) human insulin powder (interferon beta-1a) (dalteparin sodium injection) PEG-hGH CTLA4 mAb MCSF mAb ETC-588 TLR CPG 7909 ETC-216 T2-TrpRS IGF1R mAb ETC-642 CD40 mAb MAdCAM mAb 4 25 0//6 ' ! 1 7( 3 NY 7/31/2006
  • Expanding Oncology Portfolio: CP-675,206 $ %8" # " First Immunotherapeutic Novel MOA that enhances immune Immuno- system (“removes the brake”) therapeutics Broad applicability for all tumor types Option to lead in Tumor Immunology Many “Firsts” for Pfizer Oncology Melanoma Monoclonal Antibody First Fully-Human mAb Focus on cutting edge science Sales of biologics estimated at 31% of cancer market in 2009 vs 18% in 2003*
  • Biotherapeutics and Macromolecules Discovery / Development Process Manufacturing Lead Generation Candidates Development Spiegelmer ODN TLR9 antisense platform (Modified Aptamer) Pegylation & angonist Inhalation Obesity Candidate Technologies and platform Biologics Transgenic Mouse manufacturing fully human mAb platform RNAi for wet AMD Rapid generation of Cell line engineering high expression cell using ZFP nucleases lines Transgenic Mouse fully human mAb platform Candidate High efficiency ODN mammalian manufacturing Phage display expression system fully human mAb platform
  • Diagnostics Will Be Enablers of Rx Sales Example Situations Example driver Situation where Dx adds value Example Impact Diagnostic that identifies Alzheimer’s Disease, test + Potential to grow market by Uptake and presymptomatic individuals disease-modifying drug 10M+ individuals; multiple Compliance eligible for preventive/ billion dollar value disease-modifying treatment Diagnostic that indicates HIV, resistance profile, Rapid ramp-up and share Market Share best therapy for individuals Maraviroc increase; multiple hundred million dollar value Diagnostics that identifies Breast cancer, HercepTest, Fragments market, but Market Size subpopulation eligible for Herceptin increases price and share treatment within fragment Overall Pfizer All TAs have identified areas of diagnostics need Impact
  • External Diagnostics Landscape – Evolving The diagnostics market has total revenues of $70-75B(1) is growing at ~7% pa and has margins varying by technology segment from 5% to 30% Electronics companies are merging the traditional technology segments (in vivo and in vitro), pursuing higher margin services and IT revenues from clinical institutional customers Most large pharma companies (Merck, GSK, Bristol-Myers Squibb) have elected for selective diagnostics licensing deals focusing on support for specific portfolio assets Diagnostics will grow in importance in healthcare decision- making over the long term, driven by expansion in evidence- based treatment, shifts to early testing and screening and demand for personalized medicine (1) Including in vitro, in vivo direct and in vivo IT and Services
  • Business Dynamics for Diagnostics Short-term • Revenues smaller (~$55B(1) relative to pharmaceutical ~$600B), diagnostics business margins lower (10-20%), and growth equivalent (~7%). • Attractive segments fragmented; in select transactions studied, market Acquisition paid $5-7B, for base revenues of ~$0.8B and revenue growth of ~$0.2B challenges in in vitro per annum • Three key players; theoretically pay $15-25B (Philips Medical Systems) Acquisition to $55-75B (GE Healthcare), for base revenues of $9B (PMS) to $15B challenges in in vivo (GEHC) and revenue growth of $0.4B (PMS) to $2.7B (GEHC) per annum Key short-term • No indication of a large improvement in diagnostics business trends Landscape of • Integrated Rx-Dx businesses have struggled to synergize activity • Companies entering or expanding are doing so for different reasons Long-term diagnostics • More attractive as diagnostics expected to grow considerably in business importance as drivers of healthcare decisions Long-term • Critical longer-term enablers of pharmaceutical revenues Impact Of Dx On Rx
  • Key Trends: Limited Short-Term Change • Prices historically very low, continued downward pressure by payors Pricing under • Reimbursement challenge: labs often have to absorb test costs pressure • But, several trend-breakers may be emerging, such as in molecular diagnostics (e.g., Genomic Health’s Oncotype Dx) • Variable regulatory path (PMA, 510(k), class I ASR, home-brew)( at FDA discretion Increasing regulatory • Recent examples indicate intent of FDA to increase hurdles hurdles - Refusal to allow Roche AmpliChip as ASR in 2003 - Draft proposal to regulate Multivariate Index Assays, February 2007 Capabilities being • Many segments already highly commoditized (e.g., clinical chemistry) commoditized • Higher margin segments seeing downward pressure with new entries • Few areas of real exclusivity Limited IP protection • Many ways to resolve a particular Dx problem allows circumvention of IP Long-term growing • Human Genome Project, SNP Consortium and Hap Map are synergistic with importance in healthcare diagnostic development decision-making • Diagnostics likely to be much more important in driving healthcare decisions
  • Longer-Term, Diagnostics Growing in Importance Expansion in Evidence- • Market increasingly demands evidence-based based treatment treatment selection that can be provided by diagnostics • Theranostics now standard for HIV, increasing for HBV and HCV Shift to early • Potential to grow Rx market for many indications testing and screening • E.g., Biomarker and diagnostic development to identify pre-symptomatic Alzheimer’s Disease • Diagnostics to identify molecular basis of disease Demand for Personalized Medicine important during both R&D and commercial • Huge potential impact across many diseases currently defined by clusters of symptoms and tests
  • Current and Past “Investments” in Diagnostics Equity Non-Equity Aureon Labs Cogstate Avid Radiopharmaceuticals Epidauros Genizon General Electric Genomic Health Oxford ICardiac biosensors Monogram Source Mdx M2S Perlegen Virtual Scopics
  • New Paradigms
  • Recent Deals Scripps An infusion of new ideas, fresh science The Pfizer Incubator Nurturing ‘solutions’ to Pfizer ‘technology gaps or problem statements
  • The Collaborative Research Program Between The Scripps Research Institute and Pfizer
  • General Provisions of Collaboration 5 year term Governed by Steering Committee (SC) with equal representation from Scripps and Pfizer Areas of Defined Collaboration 2 Target Biology Projects/Year 10 Screen Configurations/Year (Drug Pfinder) Biological Libraries – creation/screening First option to license up to 47% of inventions First option to fund any corporate-sponsored research Collaboration in other fields as approved by SC Sabbatical Opportunities
  • The Pfizer Incubator Business Model Project initiation / Incubation Exit Scenarios TPI Board needs Entity Creation TPI acquires exclusive rights • to ensure nimble Founder(s) • Value negotiated or by third party decision making • TPI cannot acquire only a portion IP, know-how of company - cherry pick (in most • to have flexibility NewCo situations) to pursue different • Milestones, royalties can provide legal structures Executes Research long-term reward for founders Plan • to reconcile TPI compliance with $$*, facilities, Spin out certain Pfizer operational support • TPI may acquire non-exclusive license policies and • Equity share negotiated at • Agreed upon objectives, • NewCo can raise funding from procedures in the start research plan • TPI has a Board seat • 2 year funding, 6 month external investors or be acquired context of TPI and • NewCo moves out of incubator • TPI reserves an option to milestones • TPI may remain a stakeholder incubated entities buy out founders based on • Plan and milestones can (no Board seat) negotiated or 3rd party be changed if approved by TPI valuation Board Value to Pfizer Value to Entrepreneurs • Early access to enabling technologies • Easy hassle-free start-up, focus on science • Flow of products at various stages at lower cost • Strategic advice from the ultimate customer • Agility in exploring new technologies & processes • Opportunity for faster payoff
  • TPI Organization, facilities and service model Service model EHS TPI Board IT TPI LLC TPI Head Expert advisors Incubator Concierge Facilities Entity Services Services Entrepreneurs-In- Residence (EIRs) Supplies/ Open innovation Logistics manager LJ Incubator Security Incubator Head Operating budget Concierge CB7 26,600 sq. ft. for 2007: $2.5M Employees/contractors 5 dedicated labs (divisible into 8) Pod 1 Company 1 Investment budget for Office space to support 70+ people Company 2 LJ incubator: $10M/y Company 3 Glass wash & central services Shipping / receiving location 1st Floor TPI LLC is an umbrella organization under Least invasive renovation which multiple incubators at various locations can be run: scalable structure Shell space provides future flexibility
  • Thanks for Listening!! Pfizer is a superb partner If an opportunity fits within our strategy, we are nimble We negotiate deals appropriate for the opportunity We focus on the science We manage the Alliances with purpose and for success Any Questions?