News on trends and issues in the biopharm and pharmaceutical industry. Commentary on current events,clinical pipelines, facility expansions, competition, technology, legal and economic matters. M&A and licensing activity across the globe.
I am a Director of Research and Devopment for a leading supplier to biopharmaceutical producers. The views expressed are mine. I do not speak for any company or corporation.
I saw this today in Pharmalot. Apparently, J&J, after a seeming unending stream of gaffes, manufacuring problems and ethical slip ups, is asking its employees do some "soul searching" and examine the 70+ year old corporate credo.
The health care giant is asking employees to take time to "reflect, reaffirm, question, challenge and share" their thoughts credo and then take a survey for the purpose of “identifying opportunities for improvement and action.”
Wow! Who'd thunk? It's like all the physician's in the world sitting down to "think about the Hippocratic Oath". When I was in business school in the late 80's, J&J was the poster child of ethical behaviour. In the wake of the Tylenol tragedy (if you are old enough to recall), its management team was held in complete esteem for its safety first, profits second (or third) approach to pulling products off the shelf to protect consumers. It was THE CASE study used in business ethics classes.
Would you ever think you'd see a blog post reflecting the activities that are going on in J&J now? Neither would I.
I guess that gives away the punch line. Regardless, here's an interesting post on the topic from Stewart Lyman in this morning's Xconomy. In it, he notes that the average tenure for a top R&D exec in pharma is only 7 years. Think about that when comparind the average length of time it takes to get a drug on the market -- usually reported in 10-15 year range. It doesn't take a math major to figure out that the your average R&D head won't actually be around for new product he/she (mostly hes of course) starts in development.
The post questions -- how do you really say who did the best job in getting a drug to market? The R&D guy who started the project or the one who was in residence when it was approved to market? Don't know. Not easy to figure out. Further, given that length of time, the main way an R&D head can make an impact now is to acquire drugs that can be launched on his (or her) watch.
Brings us back to the punchline. As R&D head, you are only as good as your company's revenue and stock performance --- regardless if you caused it or not. Just be in the chair at the right time. Sounds fanciful huh?
Maybe it makes sense if you buy into the premise of this Forbes article about CEO's and their lack of [people] management skills. In a recent survey, 160 CEOs and directors were polled with regard to CEO strengths and weaknesses. It turns out that directors rank their CEOs as poor people managers. It further indicates that the MOST important thing that CEOs were rated on by boards was their company's "accounting, operating or stock performance." Not their ability to mentor, develop people, listen, resolve conflict, delegate ,etc.
It was how well the company performed on the bottom line. Given that CEOs are only in their jobs about 8.4 years (and pharma even less), it's likely you have the same phenomenon going for you at the CEO level as you do for head of R&D. The secret is being in the right place at the right time.
Japanese Pharma companies have traditionally not participated in the support of product development for the emerging world. They've typically chosen to allocate R&D funds to their own market and faster growing Western economies. Apparently this is about to change.
Five Big Pharma's in Japan, along with the Bill & Melinda Gates Foundation, are pledging to spend $100 M over the next 5 years to make a dent versus HIV, malaria, TB and other tropical diseases. The Japanese government will kick in as well. The spending will come in the form of research grants and will also provide access to company chemical libraries. See Fierce Biotech.
There has been an interesting (though not new) debate this week on In the Pipeline about whether Big Pharma actually spends more money on marketing its products than on developing them. Many of the detractors for this industry think much more is spent on the former -- as if Big Pharma were purely a bunch of hucksters.
This morning In the Pipeline produces some data from 2010 that bascially indicates about 2x is spent on R&D as is spent on marketing. This should end the debate. Anyway, I'm not sure why critics would think that a company would take the time to develop its products but not to market/sell them? Why should pharma be any different than other industries? I guess if you believe pharma actually spent 10x on marketing compared to development, you might have some sort of point, but short of that I'm not sure what that point might be.............are critics really suggesting pharma is just selling snake oil? Seems far-fetched doesn't it?
This from the LifeSci VC blog this morning. A post on the myths that persist in the popular conscience about biotech venture capital. Since they are characterized as "myths", then it follows that data shows them not to be true. Without further ado:
Returns in Life Science venture investing lag other venture capital sectors.
When biotech deals blow-up, they blow-up BIG.
Biotech takes far longer from inception to "exit" than other sectors.
The overall biotech venture capital funding environment is drying up.
Early stage venture capital is even worse -- it's a "barren wasteland"
Life Science VC's can't raise new funds.
Read the post for yourself for all the details. Suffice it to say that direct evidence or sources are cited where you can go to debunk the myths.
Here's an interesting post from the In the Pipeline blog that comments on the amount of R&D spending that is seen in Big Pharma versus what occurs in all sorts of other industries. It turns out that Big Pharma spends more as a percentage of sales than any other industry besides semi-conductors. That is eye opening to a degree -- eh?
The post also provides a link to the Booz study that was the source of this information and lays out R&D spending for a host of industries. It is a good reference piece to have I'm certain.
It's not often that you get a blog post that talks to innovation and uses references to both Homer Simpson and beer to drive home its point. Today's award goes to the Innovate on Purpose blog for -- well -- bringing us this innovation in writing.
The thrust of the article is that when aspects around the product become the focus - rather than innovations in the product itself -- you know you've reached the point of diminsihing returns. This kind of hits home in the pharma industry in the past decades where maybe as much effort was put in evergreening through reformulation, new delievery systems and maybe indication extension as was put in developing novel meds in many instances. Maybe that's why pharma return on R&D has been so dismal the past decade (if not longer).
Time to get back to real innovation with the actual PRODUCT -- for new meds, new mechanisms of action that effectively address unmet needs and perform BETTER than what we have already. BTW - I think we're starting to move in that direction again.
Visiongain published a new report on the global biosimilar market in 2013 and says the market size will reach $2.45 B, or approximately 20% higher than last year. Biosimilars now account for about 2% of the biologics market.
Monoclonal antibodies and insulin submarkets are expected to grow fastest for biosimilars over the next 10 years and should acont for 57% of the 2023 biosimilars market. Biosimilar erythropoietin and filagrastim are also expected to have increasing impact.
Said pharma industry analyst, James Evans, "Biologics are going to become so prevalent that every major company will be interested in having a stake in that expanding market."
Emerging markets, particularly China and India, have been leaders in biosimilars, accounting for the majority of global revenues in 2012. By contrast, the US, EU and Japan combined only made up 20% of the market. Visiongain predicts the pace will pick up in the developed markets from 2013 to 2017 as many of the biggest blockbuster mAbs come off patent.
Here's another post on the importance of "outcomes" research in gaining acceptance for a new drug. It quotes results from a new Camelot Management Consultants study -- where 60% of US and European companies agree outcomes research to show the effectiveness of a new drug is important in gaining acceptance --- yet disturbingly 30% say they don't plan to change the way the go about launching their products.
I like to keep info flowing on the Myriad ("gene patent") case as it percolates through the Supreme's toward a final decision. This from Patent Docs blog yesterday summarizes some findings in a recent Nature Biotechnology paper as to the impact on existing patents -- and this effect is expected to be less impactful than it might have been 30 years ago.
Frankly, one wonders why this case is even going to court now. Many of the diagnostic techniques being challenged are effectively obsolete (or soon will be) due to the fruits of the genome project and sequencing. But there is some level of trepidation that a sweeping ruling with regard to "products of nature" by the Court could actually damage other fields of biotechnology. That might cause harm to economic incentives for commercializing genetic technology, which in turn could lead to inhibited disclosure of knowledge to the detriment of progress in the industry.
And more to the point, any ruling in Myriad at this juncture is unlikely to alter the current access to diagnostic testing that the case was purportedly about.
When I was a youngster, my father used to ask us kids in the family a question: Why did the dinosaurs go extinct? It was an interesting question to us as we all loved dinosaurs and knew a lot about them. Not long after the question was posed, possible answers started flying around -- an asteroid collision, more volcanic activity, disease, ice age (climate change), movement of tectonic plates, etc. My father's response no matter the proffered answer was No, no, no, no and no.
The RIGHT answer was -- Dinosaurs became extinct because they couldn't adapt to changing conditions.
I thought of that when I saw this post this morning. It deals with the need of pharma and biotech companies to be able to adapt to the changing healthcare climate in order to survive. The post points out that increasingly, it is not enough to get a drug approved by regulators. To thrive, you need to get the drug accepted by payers.
As such, companies need to be attuned to Changing Conditions. What is the competitive standard of care out there at any moment in time? If it changes, can you adapt your clinical trials in progress to examine relevant endpoints to the new standard? Can you add a drug to a study in oncology, for example, if a new therapy is demonstrated using two or more drugs?
Bascially, you need to think about how to differentiate yourself from competitors. Can you show enhanced safety, fewer side effects, greater efficacy, lower toxicity, or identify a patient niche where your drug outpeforms? You need to be able to adapt on the run.
If you can, you will be set up to thrive under the new conditions. If not, you (or your therapy) may be the one who next goes extinct.
As Fierce Biotech reports via IMS data, te US drug market shrunk by 1% in 2012. This is the first time that has ever happened. This is due, of course, to the much talked about patent cliff arriving in a big way -- mpacting market share and revenues of some of the world's top selling small molecules. The US market is now down to $325.8 B.
Patent cliff drugs took a $29.8 B dollar hit. Yes, with a Big B. Branded producers in general saw revenues decline by $11.8 B. Generics producers of course saw he upside of things as their sales increased by $8 B. A drug market Yin and Yang as it were. Generics now account for 84% of all drugs prescriptions dispensed in the US.
The bright side for branded manufacturers are for their new drugs (< 24 months old). These actually grew by $0.5 B to a total of $10.8 B. These all fell into the specialty category with drugs like - Incivek (hep C), Eylea (macular degeneration), Xgeva (bone drug), Gilenya (MS), and Yervoy (melanoma). At least the FDA is on an upward trend with approvals, so there may be hope for a continued flow of more new drugs to bolster brand name revenues.
However, the next wave over the patent cliff is also still coming. Here's a report from the end of last year in Fierce Biotech that outlines the next 15 top sellers to go off patent this year.
Fierce Biotech yesterday reported that R&D spending was up as many significant biotechs -- like Gilead, Amgen, Celgene, Shire, Regeneron, Onyx and Biomarin. In other words, many of the darlings of biotech investors -- companies who have experienced significant share price appreciation of late. Overall, the top 10 biotechs spent $11.8 B on R&D in 2012 -- nearly a 15% increase over the prior year.
So while it may be very trendy in Big Pharma to be trimming the internal R&D budget in favor of seeking outside collaborators or properties to fill the pipeline, focused, smart R&D spending in biotech seems to be working. That suggests R&D spending is not inherently BAD as you could be led to believe if you spent all your time listening to Big Pharma CEOs and their R&D Heads. Rather, R&D appears to require focus with spending on the right projects at the right time -- while minimizing waste -- not eliminating the budget.
This suggests that the top 10 biotechs will continue to thrive and may well find themselves to be the well sought after beauties at the ball. That means possible acquisitions, partnerships or licensing deals on the horizon -- and expect the Big Pharma guys to be the callers.
This post from Patent Docs blog is self-explanatory. Suffice it to say that any hoo-haw over the exhorbitant price of a BRCA diagnostic test at $3000 is -- shall we say overblown. Assertions of this sort couldn't be more wrong-headed. If you want to blame somebody on this front, it is likely more apt to blame a particular insurer for NOT covering the test cost.