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Thriving in a Era of R&D Collaboration
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R&D collaboration Greater cooperation with academic and government researchers, as well as with other companies, is needed to create collaborations that push innovation forward. There is a growing consensus that the industry must team up public, private, and government organizations to create collaborations to bring about new and innovative therapies. Industry experts say new types of partnerships will be required to address the industry’s innovation gap. In fact, alliances, collaborations, and consortia will continue to drive improvements in clinical success, while reducing total spending, with drug developers retaining only those functions they consider core competencies, according to leaders recently convened by the Tufts Center for the Study of Drug Development. The historical and still major driver for collaboration relates to pipeline gaps, says Miguel Barbosa, Ph.D., VP, head, immunology research and scientific partnership strategy at Janssen Research and Development, part of the Janssen Pharmaceutical Companies of Johnson & Johnson. “Collaborations tend to be focused on accessing projects across the full R&D spectrum, from new drug targets to late-development assets,” he says. “But in recent years, R&D leaders have realized that maintaining depth and breadth of state-of-the-art expertise across the complete research platform through the clinical development, the range of activities required cannot be achieved through internal efforts alone.” Dr. Barbosa says there has been an increase in the number of expertise-based alliances and a change in the alliance structure to allow greater interaction between internal and external expert teams in historically closed organizations being more open to sharing expertise and data. “An additional driver for alliances relates to portfolio risk management,” he says. “These alliances tend to have several funding partners sharing the cost and long-term value of an individual or small portfolio of projects.” A big driver for collaborations is the access to cutting-edge science, says Takashi Owa, Ph.D., chief innovation officer at Eisai Product Creation Systems. “Collaboration allows for open innovation whereby a company can explore external ideas and paths to drug discovery through partnerships with industry, government, and academia,” he says. “The objective is to leverage complementary expertise to identify potential new drug targets earlier.” Areas once considered competitive are becoming more pre-competitive in which companies don’t need to own everything, but are able to access the best science wherever it may be found, says Barry Springer, VP of technology, strategy and operations, Biotechnology Center of Excellence at Janssen Research and Development, part of the Janssen Pharmaceutical Companies of Johnson & Johnson. “Stretching limited resources by sharing the cost and risk of developing therapies and technology allows for more success or shots on goal,” he says. “We want to collaborate with the best scientists doing the best science wherever they are in world. Collaborations will be fostered in new creative ways, such as the no-strings attached Janssen Labs approach on site at the Janssen R&D facility in La Jolla, Calif., which provides external innovators rapid access to modular lab space, shared specialized capital equipment, administrative areas, and operations infrastructure that dramatically reduces the start-up funds typically required by new companies to get started.” Glen Giovannetti, global life sciences leader at EY, says driving these collaborations is a scarcity of resources due to slower revenue growth at large companies thanks to patent cliffs and less venture capital for emerging firms, as well as the low productivity from R&D. “Also, persistent scientific and technical challenges in areas of high unmet need have resulted in the growing realization that it is mutually beneficial to address such challenges collaboratively through precompetitive consortia,” he says. “These approaches allow for a more efficient use of scarce resources. Instead of wasting time and money on duplicative efforts, companies can collaborate to address certain fundamental challenges in pre-competitive spaces and then compete in the core business of developing drugs based on those collective insights.” The need for continuing innovation is the bigger driver for collaborating, says Charmaine Gittleson, VP, clinical R&D, global, at CSL Behring. “Companies need to look for new and innovative products, but they need to do it in a way that’s measured and that contains costs,” she says. “But to be truly innovative, you need to allow people to try things, experiment, have space to notice serendipitous moments and think outside the box, which means they can’t be constrained by resources. Collaborations with groups like academia are critical as they can work within a free-thinking environment, and pharmaceutical R&D can provide them with the support they need.” In fact, a growing emphasis on academic and nonprofit organization partnerships could rescue the pharmaceutical industry from the redundancy of an inefficient R&D model and plug the so-called innovation gap, according to an April 2013 report from GlobalData. GlobalData analysts argue that collaboration in drug development benefits both parties, with academia constantly looking for sources of research funding while the pharmaceutical industry would gain a partner to share in the high risks and substantial costs of bringing new medicines to market. Sourcing innovation externally has provided a way to remain competitive, says Sophie Kornowski-Bonnet, head of Roche Partnering in Basel, Switzerland. “As demands upon limited resources increase, big pharma budgets for internal R&D expenditures decrease,” she says. “Efficiency in pharmaceutical R&D faces pressure from the imminent expiry of blockbuster drug patents and increasing competition from generic drugs, urging big pharma to adapt continuously to external developments.” Ms. Kornowski-Bonnet points out that pharmaceutical collaborations with academic research institutes and biotechnology companies now form an integral part of their business development plans, and pharmaceutical companies are increasingly relying on external innovation to enrich their pipelines. A survey of the 253 drugs approved by the FDA from 1998 until 2007, published by Nature Reviews Drug Discovery, showed that 42% of them originated from partnerships with academic institutions and biotech companies. According to Datamonitor, more than 65% of drug sales by big pharma by 2016 will come from externally sourced compounds. “Roche recognized the increasing importance of external innovation and more than 10 years ago set out to create a dedicated function, Roche Partnering, with the aim to source new compounds and ideas from outside the company and to become the partner of choice for biotechnology companies and research institutes worldwide,” Ms. Kornowski-Bonnet says. “Since then, Roche Partnering has grown to a team of about 80 professionals and established collaborations as the cornerstone of its R&D strategy. Today, 35% of our sales are generated by partnered products, and we expect this trend to remain the same or grow in the future.” Advantages and Disadvantages of Collaborations Dr. Barbosa says an effective collaboration allows access to state-of-the-art expertise or platforms without the time lag that recruitment or retraining would required to establish the effort internally. “The proper structure will impart greater agility from implementation to termination, thus enabling the R&D organization to make faster go/no-go decisions,” he says. “Most importantly, R&D success is directly correlated to the depth of expertise applied to individual projects and the effective use of rigorous data to drive decisions. Therefore, collaboration is critical to enable access to both factors, deep expertise and rigorous data, essential to successful R&D.” Ms. Gittleson says one of the greatest advantages of collaboration is that it fosters creativity and ultimately delivers a better product than one individual or organization can accomplish alone. “Through collaboration, there is rapid sharing of ideas and information, economies of scale in terms of research spending, mutual inspiration, and long-term professional partnerships that can yield improvements and additions to the medical arena well into the future,” she says. “Lastly, collaboration offers us the ability to decrease our strategic risk, by allowing us to distribute our R&D funding across multiple opportunities rather than having to focus on only a few candidates. This gives us more flexibility and greater reach.” Sheila Rocchio, VP of marketing and product management at PHT Corp., says that companies that don’t figure out better, faster, cheaper won’t win. “We want to get medicines out more quickly,” she says. “Working with companies that are focused on different pieces of the process makes for efficient collaboration. Nontraditional collaborations are making the overall process better for everyone.” Mr. Lai says the nature of these R&D collaborations is evolving beyond ad hoc outsourcing arrangements to much more strategic long-term partnerships where the partners remain highly engaged and contribute significant expertise and resources. “An example of such a partnership is the Bayer Singapore Integrated Translational Oncology Network,” he says In January 2013, Bayer HealthCare and five research institutions in Singapore introduced a new Integrated Translational Oncology Network to further enhance R&D collaborations to address cancer in the Asia-Pacific region. The partners will jointly develop and evaluate novel treatment options for Asian prevalent cancers in collaborative projects and trials. In addition, they will organize joint activities, such as annual meetings, workshops, or lectures, and link their network and activities to other leading centers in Asia Pacific. These initiatives support the trend that drug development companies will and must seek to improve collaboration and change the current R&D model, says Eric Silberstein, co-founder and CEO of TrialNetworks. “This need is underscored and driven by escalating clinical costs and delays, inefficient site and vendor processes, and greater pressure from generics producers,” he says. “While the cost for clinical trials continues to rise, the number of drugs the FDA approves declines each year — this is an unsustainable R&D model in the long run. Pharma companies can only control the first part of that equation, and the industry as a whole is beginning to take steps to collaborate to solve these core issues.” Kevin Lai, director of biomedical sciences and consumer businesses at Singapore Economic Development Board, says collaborations allow companies to leverage a more diverse pool of capabilities. “Companies are realizing that no single organization holds all of the necessary knowledge for effective and efficient innovation,” he says. “As resources are getting tighter, companies are looking upstream to universities and other research organizations. For this reason, we have put in place initiatives to encourage collaborations within the Singapore scientific community. For example, we started the Translational and Clinical Research flagship program to bring together researchers and clinician-scientists to collaborate to better understand Asian diseases.” Another initiative, TransCelerate BioPharma, formed in 2012, is a nonprofit consortium of pharma companies focused on advancing innovation in research and development (R&D), identifying, and solving common R&D challenges, and further improving patient safety, with the goal of delivering more high-quality medicines to patients. The organization currently has 17 members. Ms. Kornowski-Bonnet says what is critical for the success of these collaborations is creating a mutual benefit for both partners by complementing expertise and skills, fostering scientific dialogue, and building trust. “Roche’s partnering strategy focuses on creative deal structures tailored to each partner,” she says. “Its goal is always a personalized deal, considering a variety of deal types, ranging from licensing and acquisitions to option deals and portfolio agreements. In addition, Roche Partnering supports flexibility in deal structure — one size does not fit all. We will construct a deal that makes sense for parties, addressing financial structures, joint participation, governance, etc. The goal is to leverage the strengths of the partner company and of Roche.” Research collaborations and consortia play a critical role in pooling data from a diverse set of players, such as data on failed clinical trials from pharma companies, genetic data from patients, and disease foundations, claims data from payers, and outcomes data from providers, including electronic health records, Mr. Giovannetti says. “It is only through such pooling of data that the potential of big data can be realized to gain insights from across the cycle of care and accelerating drug R&D,” he says. “They can be very useful in developing industrywide standards, such as data standards, that are needed for more efficient drug development. Through such consortia, payers and disease foundations can help focus the efforts of drug R&D where there are big current and future unmet needs and few good treatments or cures, such as in Alzheimer’s.” But industry experts say these collaborations are not without their challenges, specifically the willingness to share data. “Ironically, one of the biggest challenges is also a major contributor to the success of a collaboration,” Dr. Owa says. “Each company has its own culture and approach to drug development. Sometimes these differences cause friction. But at the same time, it is these differences of perspective that allow the companies to learn from each other and broaden their knowledge base. In my experience, it is this learning process that almost always leads to success.” Mr. Lai says the key challenges for effective public-private partnerships are often the bureaucracy and administrative hurdles of working across different institutions. “To enable the various Singapore research institutions and hospitals to work together seamlessly with industry, Singapore has put in place a Master Research Collaboration Agreement template so that industry partners do not have to negotiate separate contracts with each organization,” he says. “We have also established a national R&D coordination office, the Industry Partnership Office, to help companies identify the right collaboration partners and facilitate the ongoing implementation of such collaboration across institutions.” Keys for Successful Collaborations Dr. Owa says one of the keys for a successful collaboration is finding the right balance of structure that does not hinder the creativity of scientists. “Each pharma company has its own strategy and perspective, but we must challenge ourselves to create new models that support collaboration,” he says. Dr. Barbosa says successful collaborations share several factors. “These include: a common goal, with close agreement from senior management to bench and clinical scientists working on the project for all participating organizations; complementary expert teams, each with a clear role in the execution of the R&D plan for each individual project; mutual respect to strengthen the peer-to-peer engagement and effective execution of the R&D plan, with no distinction drawn based on the size or history of the parent organizations involved,” he says. “Ultimately, a critical advantage of a collaboration driven by a fully engaged team with complementary and deep expertise has a much higher probability to overcome the certain challenges that all R&D programs encounter, technical or otherwise.” Randy Hassler, chief operating officer at Seattle BioMed, says collaborations work best when both parties are engaged in the project together. “This mutual motivation and benefit helps drive the collaboration forward,” he says. “And although technologies to communicate and share data are making the issue of distance less of a problem, we have found that collaborations with people nearby tend to work better. For us, the main advantages are access to resources we cannot or do not want to keep in-house, especially broader expertise and certain sophisticated technologies. We would not be able to accomplish nearly as much if we worked in isolation, so collaborations are essential for the work we do.” Ms. Gittleson says one of the tricks is to actively manage and nurture the relationship. “All too often, partnerships are established and then left alone, she says. “But it’s important that we cultivate these relationships so that our partnerships lead to optimizing innovation, improving the efficiency of research and clinical trials, and building new tools for physicians, consumers, insurers, and regulators that meet the promise of continued advances in medicine.” Mr. Silberstein says the status quo is a main obstacle to improving collaboration. “Sharing information (site performance, adaptive trial designs, feasibility survey results, technology best practices, etc.) in such a confidential industry is not something routinely embraced by companies seeking to find and hold onto competitive differentiators,” he says. “Fortunately, as with technology adoption, the status quo already seems to be changing with initiatives such as TransCelerate, which never would have been a possibility a decade ago.” Jamie Macdonald, CEO of INC Research, says developing and agreeing upon shared goals, proper governance, metrics for measuring the partnership and open lines of communications are keys to a successful collaboration. “Investing in these activities from the beginning is essential to ensuring the relationship will be successful,” he says. “There is a big management component to these collaborations related to getting the right people in the right roles. There may be resistance to change or an inability or unwillingness by staff to adapt to new roles at the rate the partnership demands. Proper change management helps overcome these risks and ensures a smooth transition.” “The status quo is a main obstacle to improving collaboration. Sharing information in such a confidential industry is not something routinely embraced by companies seeking to find and hold onto competitive differentiators. ” Eric Silberstein / TrialNetworks “There is an increase in the number of expertise-based alliances to allow greater interaction between internal and external expert teams in historically closed organizations being more open to sharing expertise and data. ” Dr. Miguel Barbosa Janssen Research and Development “Stretching limited resources by sharing the cost and risk of developing therapies and technology allows for more success or shots on goal. We want to collaborate with the best scientists doing the best science wherever they are in the world. ” Barry Springer Janssen Research and Development “To be truly innovative, companies need to allow people to try things, experiment, have space to notice serendipitous moments and think outside the box, which means they can be constrained by resources. ” Charmaine Gittleson / CSL Behring “Developing and agreeing upon shared goals, proper governance, metrics for measuring the partnership, and open lines of communications are keys to a successful collaboration. ” Jamie Macdonald / INC Research