Bridging The Valley Of Death A Tale Of Two Cultures


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A brief presentation for the upcoming Bioconference Live meeting

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Bridging The Valley Of Death A Tale Of Two Cultures

  1. 1. Bridging the Valley of Death: A Tale of Two Cultures Robert W Malone, MD, MS Consulting, Vaccines and Biologicals @ Your world is our world
  2. 2. What is the success rate for Biotechnology products? Therapeutic rDNA Humanized Chimeric Synthetic NCE area mAb mAb Peptide Anti-infective 23% ND ND 13% 28% Anti-neoplastic 17% 25% 29% 33% 16% CV/hemostasis 26% ND ND 22% 18% Endocrine 58% ND ND 30% 18% Immunological 41% 17% 29% 6% 15% All products 32% 18% 26% 20% 17-23% Generally, one in four, to one out of five biotechnology products in development achieve licensure and marketing ! Source: Tufts Center for the Study of Drug Development New Biotechnology Therapeutics Challenges for the industry Janice M. Reichert, PhD (2004)
  3. 3. What is the cost of developing Biotechnology products? • Average Cost To Develop A New Biotechnology Product Is $1.2 Billion. • A new biotech product takes 97.7 months (8 years) on average to wend its way through clinical development and regulatory review (8% longer than traditional pharmaceuticals) • Average out-of-pocket cost (cash outlays) per approved biopharmaceutical for the preclinical period totaled $198 million. When capitalized, this estimate is $615 million per biopharmaceutical. • Average out-of-pocket clinical period cost per approved biopharmaceutical was $361 million. When capitalized, this estimate is $626 million. • Capitalization increases biopharmaceutical costs relative to traditional pharmaceutical costs because of a longer development timeline and a higher cost of capital. • Biopharmaceuticals had an overall clinical approval success rate of 30.2% vs. 21.5% for traditional pharma firm pipelines. Source: Tufts Center for the Study of Drug Development 2006
  4. 4. What constitutes the “valley of death” for technological product development? Fundamental challenges involved in transitioning from research and development discoveries to commercial products and processes Operational implementation of R&D discoveries is frequently difficult Transitions from discovery to product implementation often result in "skeletons in Death Valley.“ In crossing the valley, new technologies and product candidates must survive two types of challenges; 1) Can the candidate meet performance requirements, and 2) Will it survive being “tossed over the fence” FROM: RESEARCH TO OPERATIONS IN WEATHER SATELLITES AND NUMERICAL WEATHER PREDICTION CROSSING THE VALLEY OF DEATH Commission on Geosciences, Environment and Resources National Academiy Press (2000)
  5. 5. What fence? Discovery Research Culture Product Corporate environment Development Business practices Capital sources Culture Regulatory environment Corporate environment Project management Business practices Capital sources Regulatory environment Project management
  6. 6. Eight Critical Determinants of Success (Bioshield testimony, Major General Dr. Phillip Russell) 1. A credible threat determination and threat analysis (clear unmet medical need) 2. A defined deployment and utilization policy for the product (target product profile) 3. Government-wide agreement on the requirement (internal stakeholder consensus) 4. A mature science base demonstrating proof of principal and ability to manufacture (POP, POC and feasibility) 5. Funds and funding mechanism for early and mid-stage industrial development (adequate capitalization) 6. Sufficient acquisition funds (obligation authority) to provide the incentive for industry (existence of a well defined market) 7. Consultation and support for the manufacturer from the acquisition agency and the FDA to assist in meeting regulatory requirements (reasonable regulatory pathway to licensure) 8. Ability to indemnify the manufacturer (manageable safety/liability risk)
  7. 7. Back to that fence… (pssst… it’s also cultural) Discovery Research Cultural focus on innovation and disruption Corporate environment more academic Business practices relatively unstructured Capital sources directed to opportunity area, generally risk tolerant Regulatory environment focused on research risk and ethics Difficult to predict timelines, milestones, budgets Advanced Product Development Cultural focus on compliance and predictability Corporate environment more commercial Business practices highly structured Capital sources milestone driven, risk averse Regulatory environment focused on GXP, QA, clinical safety and efficacy endpoints Project management is critical to success
  8. 8. Anecdotal observations of one consultant over 20 years  New funding is often immediately followed by profligate spending, subsequently followed by “biotech hell” when funds near exhaustion and milestones have not been met.  Innovation and experimentation is prone to creating regulatory licensure challenges.  Discovery researchers are often unaware of regulatory challenges and key obstacles to licensure.  Teams involved in advanced product development are often relatively uninformed about the underlying scientific and medical rationale of the product.  Advanced development teams rarely communicate well with the discovery research scientists and the research teams that have detailed understanding of the product KISS ! candidate and underlying science.  It always takes more money and more time to get to market than you think it should.
  9. 9. What does the future hold for Biotechnology product developers?  Outsourcing (virtual pharma business model)  Rigorous project planning and management practices which couple technical milestones to disbursement of project funds  Fewer startups, with launches requiring a more advanced “technology readiness level”  Increased reliance on financing new technology development via non-dilutive capital (government, NGO), partnering, and profit from existing operations  Earlier stage emphasis on viability of product development pathway by non- dilutive capital sources, and increased insistence on meeting product deliverables  Discovery and pre-clinical stage biopharmaceutical product development activities must be aligned with the regulatory, QA, manufacturing, and clinical safety/efficacy demands of advanced development.  The bulk of the out of pocket financial risk in biopharmaceuticals is incurred during advanced development, and additional steps to de-risk this investment must be integrated throughout the entire product development process.
  10. 10. How can you help bridge the “Valley of Death” for your company and product?  Manage project funds carefully from the outset using industry best practices (project management tools and planning).  Employ leaner and more tightly controlled business practices (particularly in the discovery research phase).  Continually seek ways to understand, mitigate and address CMC, Regulatory Affairs, Clinical Development, Quality Assurance and licensure endpoint risks and considerations from the very KISS ! beginning of the product development.  Continue to keep the discovery research scientists and team engaged in the development of the product throughout the advanced development process.
  11. 11. Questions and discussion? Thank you for your interest, attention and participation, good luck with your product, and please remember to Keep It Simple! Robert W Malone, MD, MS Consulting, Vaccines and Biologicals @ Your world is our world