Transcript Enhancing Portfolio Value by Integrating Related Products and

Enhancing Portfolio Value by Integrating
Related Products and Services:
Adding Value to Medicines
Michael Stocum
Presentation Agenda
 Diagnostic and Therapeutic Integration
 Adding Value Throughout the Portfolio
 Case Studies
 Implications and Opportunities
Historical Perspective - GlaxoWellcome
 1997 Herpes diagnostic

collaboration established
1998 Strategic assessment
of Molecular Diagnostics
impact on pharmaceuticals
 1999 Predictive Medicine
group formation
Mission Statement and Deliverables
Mission
 Add significant incremental value to the company’s
innovative medicines by integrating novel tests and in doing
so deliver differentiated products to meet patient needs.
Deliverables
 Facilitate and manage partnerships for biomarker discovery
and validation
 Develop assays and tests for internal decision making in

drug discovery and development
Develop tests associated with medicines for commercial
market
Test Application to Medical Decisions
Cytogenetic testing
for Trisomy 21
Diagnostic
Does the patient
have a specific disease?
CYP2D6 testing prior to
opiate adminstration
Medicine Response Test
What is the right medicine for
this patient?
Is the patient likely to benefit
and not have an unwanted
effect from this medicine
Prognostic
Is the status of the patient's
disease changing?
HER2/neu testing in
breast cancer
patients
HIVRNA viral load
monitoring in AIDS
patients
Surrogate
Does response to therapeutic
reflect efficacy or pharmacology?
What and How Can We Test
 DNA markers by Nucleic Acid Tests i.e. FISH,
PCR, etc. (a.k.a. Genomics)
 mRNA markers by NAT (a.k.a. Transcriptomics)
 Protein markers by ELISA/Immunohistochemistry
or IHC (a.k.a. Proteomics)
 Clinical Chemistry markers (a.k.a Metabolomics)
 Other ‘omics...
Tests Can Add Value Through...
Market Expansion
•Identification of at risk patients
•Diagnosis of new patients
•Novel disease indications
•Increased compliance
Product Differentiation
•More convincing clinical information
•Increased efficacy & tolerability
•Enhanced HE outcome
•Improved risk/benefit
Expedited Drug Development
•Surrogate instead of clinical endpoints
•Better defined trial populations
•Clearer scientific rationale
Enhancing the Value of Medicines
Revenue Enhancement
C
Sales
B
D
0
A
5
Time - years
10
Sales growth of a
product from launch at t
=0
A: Product faster to
market: Longer
patent protection
period
B: Reduced time to
peak sales: Faster
uptake
C: Enhanced peak
sales:
Higher volume of
D: Extend lifecycle:
sales
Prevent revenue
decline, increase
barriers to entry
Presentation Agenda
 Therapeutic and Diagnostic Integration
 Adding Value Throughout the Portfolio
 Case Studies
 Implications and Opportunities
Views of a Portfolio
 Cross-sectional versus longitudinal approaches
L
Product Development & Commercialization Stages
Research >> Development >> Manufacturing >> Launch >> Lifecycle Mgmt.
Product Lines
CS
A
B
C
Opportunities for Testing Integration
in Therapeutic Product Development
 Research: Target Validation/Early Drug Discovery
 Development: Clinical Research Trials
 Launch: Product Commercialization
 Lifecycle Management: Sales & Next Generation
Impact on Clinical Development
Using diagnostic tests to match patients to medicines and
accelerate development programs are potential applications of
integrated medicine.
Matching the “right patient” to
the “right medicine” through:



Identifying those with high risk of
adverse events (AE)
Minimizing patient changes in
medication due to low efficacy or
safety issues
Identifying those with greatest
chance of benefit
Accelerating clinical
development programs through:

Faster enrollment / increased
investigator confidence

Improving patient selection to
develop maximum efficacy data
with fewer patients

Using biomarkers as surrogates
for clinical endpoints
Testing in Clinical Development:
Examples
 Patient Response:
– Toxicity: Irinotecan
– Efficacy: HER-2/neu
 Surrogates for Clinical Endpoints: HIV RNA viral
load testing
Pharmacogenetic Test Improves the
Risk:Benefit for a Drug
3-5 years
Today
Research finds DNA
differences resulting in a
medicine response test
assess risk of an AE
Negative test result puts most
patients in low risk
population, AE rate ~ 0.5%
Drug XYZ is a highly effective cancer
treatment but severe AE occurs in
up to 19% of patients
Positive test result puts a few patients
in higher risk population AE rate = 50%
Testing Improves Drug Efficacy
 HER-2/neu testing (IHC & FISH)
– without testing ~ 10% response rate (projected)
– with testing ~25-30% response rate in test
positive population
Surrogates of Clinical Endpoints
 HIV RNA viral load in therapeutic development
– increasing viral load :: poorer prognosis
– viral load validated and established as a
registerable endpoint
 Length of pivotal trials reduced significantly (PIs)
Impact on Launch & Lifecycle Mgmt.
Integrating tests and drugs can segment the market but expanded
market share improves overall revenues.
Improved
Efficacy
Enhanced
Safety Profile
New Product
Opportunities



Faster market acceptance of drug


More physicians willing to prescribe

Better patient compliance

Pharma company discovers & develops
new drugs and new indications to
address those left out in segmentation
First line therapy
Increased market share
Prescribing physicians offer to more
patients
Testing Differentiates a Product
 HIV RNA resistance testing therapeutic positioning
– resistance is manifested differently for various
drugs
– loose claims made that certain drugs would not
induce resistance to others
 Resulted in certain protease inhibitors being
prescribed prior to others
Testing to Expand a Market
 Sepsis: New product approved for treatment of
Severe Sepsis (following organ failure)
 Uptake of product is slower than projected
 Pharma company enters collaboration to identify
markers for earlier intervention
So What...
If this approach adds so much value,
why isn’t everyone doing it??
Drug < Co-Development > Diagnostic
Tractable Hit
Lead Candidate
Preclinical
IND
FTIH
Phase I
Phase II
POC
Phase III
NDA
Launch
Biomarker
Discovery
Assay Development
Clinical Validation
Homebrew Test in
Central Testing Lab
Commercial Diagnostic
Development with Partner
Test Performance
Clinical Trials
Regulatory Submissions
Launch
Elements of Successful Partnerships
Pharmaceutical partnerships with diagnostic companies can be
mutually beneficial, if handled correctly.
Early
communication and
consistent
information sharing
ensure quality test
development.
Early and
Ongoing
Communication
Clear
Contracts
with
Adequate
Timelines
Profitable
Partnerships
Pharma companies look for
diagnostic partners with good
reputations and strong
technical and manufacturing
capabilities.
Partner
Selection
Good deal
structuring
manages
expectations
on both
sides.
Presentation Agenda
 Therapeutic and Diagnostic Integration
 Adding Value Throughout the Portfolio
 Case Studies
 Implications and Opportunities
Case Study: Aventis & PharmaNetics
Development and commercialization alliance aimed at producing
diagnostic tests to expand use of Aventis’ Lovenox product.
DETAILS

PharmaNetics is working exclusively with Aventis to develop a
diagnostic test for detecting anticoagulant effects of Lovenox.


Test will be co-branded by the two companies.
Aventis paid $5 million to PharmaNetics in first year of five-year
deal.
SIGNIFICANCE

Diagnostic expected to increase physician comfort with
prescribing Lovenox, potentially boosting drug sales.

Co-branding furthers Aventis marketing message
Case Study: Eli Lilly & Esoterix
Alliance to develop and commercialize screening test for a growth
disorder treated by a Lilly drug.
DETAILS

Companies worked together to optimize and clinically validate
tests for diagnosing SHOX gene mutation, related to short stature
in children.

Esoterix holds exclusive rights to commercialize resulting test.
SIGNIFICANCE

Available since Feb. 2001, the test is first and only
commercially available test for diagnosing SHOX gene
mutation.


Test has gained acceptance in medical community.
Diagnosis could boost sales of Lilly’s Humatrope drug.
Case Study: Abbott & Celera
Comprehensive, long-term strategic alliance covering genetic marker
discovery through new product distribution.
DETAILS

Researchers from both companies will staff project to develop
diagnostics for diseases & chronic conditions.

Celera to focus on discovery, new marker validation and assay
development. Abbott to handle production and sales & marketing.

Companies equally share profits, expenses.
SIGNIFICANCE

Abbott’s participation seen as move toward cogent molecular
diagnostics strategy.

Deal to help Abbott maintain long-term competitiveness..
Case Study: Roche & deCODE
Research collaboration with diagnostics, therapeutics and
pharmacogenomics components.
DETAILS

Joint research focused on disease gene discovery for developing
therapeutic & diagnostic products.

Roche to hold drug development rights & deCODE to hold rights
to gene & antisense therapies in $300 million deal.

Deal crosses all three alliance categories.
SIGNIFICANCE

Agreement is key element of Roche strategy to gain market
share in genomic diagnostics.

Four-year-old deal has already led to important discoveries.
Presentation Agenda
 Therapeutic and Diagnostic Integration
 Adding Value Throughout the Portfolio
 Case Studies
 Implications and Opportunities
Commercial Portfolio Implications for
Integrating Testing and Medicines
Market segmentation, but...
 Improved efficacy leads to:
– faster market acceptance of drug
– first line therapy
– off-label usage
 Enhanced safety profile leads to:
– more physicians willing to prescribe
– prescribing physicians offer to more patients
 New product opportunities:
– Pharma company discovers/develops new drugs to address those
left out in the segmentation
Presentation Key Messages
 Portfolio value may be increased by adding
products or services from related businesses
Speed
Improve cost:
 Diagnostics development
and testing,
of when used appropriately
benefit ratio
drugs & tests
with medicines, generally add value
 Business models and constraints for related
businesses must be considered
 With proper
Improve patient
strategic outcomes
intent and
operational
management, both business will benefit
Genetic Testing is Here
To Stay...
But
It’s
Not...
Enhancing Portfolio Value by Integrating
Related Products and Services:
Adding Value to Medicines
Michael Stocum