Drug Development<br /><ul><li>This is not for the faint of heart or the poor!
It always takes longer and costs more than projected!
If they tell you they only need another $X million throw them out!</li></li></ul><li>Macro Issues<br />Funding is difficult to come by<br />Investors expect results from R&D<br />Pipe lines have holes<br />Revenue cliff<br />Goal approved drug/marketable product<br />
Lesson Learned<br />Is the Finance role much different in a manufacturing environment than an R&D organization?<br />Edgcomb metals Plant manager put his best people on Inventory Management<br />
Recommendation #1<br />In order to support the R&D project teams as a finance resource and business partner<br />Put your best finance people on the R&D area<br />External reporting<br />Internal reporting<br />Increased emphasis<br />Assist R&D with putting together and accurate projection<br />Monitor monthly activity<br />Actual $ spent plus ESTIMATE to complete = total spend<br />
Recommendation #2<br />Engage with R&D leaders <br />Finance must attend the project meetings and issue a report to controller/CFO<br />Finance understands the big picture as funds move from R to D to CMC to Regulatory to Marketing<br />Changes in direction cause changes in spending<br />When to pull the plug!<br />Provide real feedback on $ spent<br />
Recommendation #3<br />Finance Department’s role as an advisor to R&D on business decisions<br />Cash is limited.<br />Every project cannot be funded.<br />Existing projects must be managed<br />Expectations must be set with respect to cost<br />“What if” scenarios need to be addressed.<br />Additional trials, managing vendors<br />
Recommendation #4Enhancing Financial Planning Systems<br />Finance must drive the planning process.<br />Start with excel before moving to complicated software.<br />Top down to kick off the process<br />Bottom up approach to provide a roadmap<br />Pre-fill the budget amounts to get the process started.<br />
Example 1Top Down Approach<br />Assumption – 2 year’s of Cash on hand<br />
Recommendation #5<br />Finance must manage the Budget and Forecasting process<br />Buckets, Ranges and Cushions <br />One cost center per project<br />Gl accounts – not too many and not to few<br />Provide hard copy summary to R & D combined with an end of month meeting to discuss results.<br />Rolling forecasts <br />Monthly preferred <br />Quarterly at a minimum<br />Prior year carryovers.<br />
Recommendation #6 Assessing the Economics of an R&D<br />Engage ex FDA consultants to review:<br />Preclinical<br />Clinical<br />CMC<br />NDA<br />Perform a robust marketing study for the target.<br />Start with the end in mind.<br />
Recommendation #7 Cost Management and Bench Marking <br />Cost per patient<br />How does it compare to other studies?<br />How does it compare to other companies?<br />Bring major vendors into the office quarterly.<br />Prevent cost over runs before they occur.<br />
Recommendation #8 Accounting for Clinical Grants & Internal Development <br />Assign a specific person to monitor<br />Excel templates.<br />Time sheets<br />External review by a third party.<br />