Most people have heard of Moore’s Law for computing power: an observation made back in 1965 by Intel co-founder Gordon Moore which states that computing power (or processor speeds) roughly doubles every 18-24 months. It has been almost 50 years since Moore made that observation and it still holds true today.
On the other hand, most people haven’t heard of Eroom’s Law: an observation made in 2012 to describe the productivity (or lack thereof) of biopharmaceutical research and development. It states that, since 1950, the number of medicines invented per billion dollars of R&D spending is halved every nine years (Exhibit 1). Industry analyst Jack Scannell coined this term by flipping Moore’s Law backwards. While some in the industry argue that this downward trend has leveled off in the last few years, not many would disagree that we need to shake things up in the R&D space if we want to see the graph start heading in the other direction.
As companies continue to seek new ways to keep their pipelines churning out promising drug candidates, one trend we are seeing to try to shake things up is increased collaboration. While this is not exactly a new phenomenon – and we have spoken about the market forces driving these strategies before – there are a number of new, innovative partnership models popping up that we are quite excited about. Here we will talk about three of them.
The 1-to-1 Partnership
The first is the simple 1-to-1 partnership. While I say “simple,” this type of collaboration can be far from it; just ask Takeda and Nykomed, Pfizer and Wyeth or Sanofi and Shantha Biotech. However, two companies that seem to be doing something right are Celgene and Agios. In April of 2010, Celgene put $130 million into a biotech startup called Agios for co-development and licensing rights to its early-stage oncology metabolism platform over 3 years, quickly adding a fourth year for another $20 million. And now that investment is starting to bear fruit. The deal gives Celgene the option to exclusively license any of the drug candidates coming out of the cancer metabolism platform through phase I, and in June, Celgene did exactly that. Acting early on the promising phase I data being generated, Celegene decided to exercise the option of an exclusive worldwide license for AG-221, a novel, first-in-class candidate. While this partnership is rather unprecedented for its sheer size at such an early stage, Celgene’s $150 million investment appears to be a good one. And perhaps this type of partnership can be a blueprint for other biotech start-ups seeking to gain traction quickly, both scientifically and financially.
The Pre-Competitive Early Stage Research Partnership
The second innovative model we are seeing is the pre-competitive early stage research partnership. These types of collaborations, which often span across public, private and non-profit sectors, are popular for trying to accelerate pre-clinical research by sharing proprietary compound libraries with outside researchers and working together on the early bench work of target identification, lead selection and lead optimization.
This model is epitomized by the recently-formed Accelerating Medicines Partnership (AMP). Announced earlier this year, the AMP is a new 5 year collaboration between the NIH, FDA, 10 biopharmaceutical companies and several non-profit organizations (Exhibit 2) to jointly identify and validate promising pre-clinical biological targets. The partnership is pumping $230 million into 4 core disease areas: Alzheimer’s disease, Type 2 diabetes, rheumatoid arthritis and lupus.
While this model is similar to that of many of the sector-spanning Product Development Partnerships (PDPs) that have been in existence for many years now to accelerate neglected disease R&D (e.g. TB Alliance, Medicines for Malaria Venture, International AIDS Vaccine Initiative, etc.), the AMP is notable for its size, breadth, and the fact that its disease targets hold significant commercial value. Leading the charge here is NIH Director and genetics pioneer, Francis Collins, who is not the only one frustrated by the lack of therapeutic products coming out of the huge advancements we have made in genomics and proteomics since the Human Genome Project. Collins insists that the problem is not the lack of candidates, but being able to effectively sift through the mountains of data, which researchers currently work on in silos. And while issues remain with this open-source, early-stage model (such as when “competition” would resume for a drug candidate generated from the AMP), it seeks to spur innovation by promoting collaboration rather than competition and should be commended.
The Clinical Trial Standardization Partnership
The final collaboration model we have seen pop up which deserves mention is around clinical trial standardization. In September 2012, 10 big pharma players, including AbbVie, BI, BMS, Lilly, GSK, J&J, Pfizer and others, came together to form the non-profit TransCelerate Biopharma (Exhibit 3). With a mission is “to advance innovation in R&D” by “identifying and solving common R&D challenges,” each company contributes funding and staff from their R&D division. Out of the gate, Transcelerate chose to focus on 5 main issue areas where big pharma could benefit from creating industry-wide standards:
– standardizing the way risk to patients is measured in clinical studies,
– building a common platform for doctors to enroll patients in trials,
– creating clinical data reporting standards,
– standardizing the training and qualification process for doctors and trial sites, and
– standardizing the process by which companies obtain comparator drugs from each other to conduct their studies
TransCelerate formed from a regular meeting of big pharma R&D executives, with Garry Neil, a former VP at Johnson & Johnson, as interim CEO. “Why do some companies record that male is a 0 and female is a 1, and others use 1 and 0, and others use M and F? Where is there any competitive advantage in doing that?” Neil said. “If we were to try to come together and define some of these standards, it would be an enabler for efficiencies for everyone.” In fact, 9 more companies have already joined the 10 founders, and the invitation remains open to any interested parties.
The idea is that standardizing will cut red tape, streamline processes, make it easier for outside stakeholders (e.g. patients, doctors, FDA) and ultimately cut ever-increasing R&D costs and timelines. If TransCelerate can have some success, it has the potential to change everything from the kinds of drugs that get green-lit to the cost of pharmaceuticals for the healthcare system.
R&D Collaboration Management
Collaboration is the name of the game these days in pharmaceutical R&D, and these are just three of the exciting and innovative partnership models out there trying to really shake things up. Here at Capgemini Consulting, we do a lot of work around R&D collaboration management, trying to make Eroom’s Law a thing of the past. The first step is usually engaging clients with our patented Accelerated Solutions Environment (ASE)™: a tested approach to address complex, multi-stakeholder strategic issues. The ASE has proven ideal for discussing and solving collaboration management issues across biopharmaceutical companies of all shapes and sizes. To date, over 50 pharma companies and over 4,000 pharma execs have participated in one of Capgemini’s ASEs.
What do you think: Is pharma collaboration a fad that will pass or is it here to stay? Do you know of other innovative models worth mentioning?