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In the middle of the 20th century, pharmaceutical companies were highly respected and patients depended on their physicians to make healthcare decisions for them. Drugs were a key part of a physician’s “toolkit.” As we entered the era of blockbuster drugs, most drugs were small molecules created by chemical synthesis, but biotechnology was beginning to emerge as a possible source of new therapeutics. Meanwhile, direct-to-consumer pharmaceutical advertising began to empower patients. Fast-forward to today and we see pharmaceutical companies suffering degraded reputations and values, patients being empowered by the Internet and social media, and average life expectancies increasing by a decade. Digital health technologies are posed to explode and the top 10 pharmaceuticals by sales will soon all be biologicals!
Citation preview
Passing the Healthcare Innova2on Torch:
From Medicinal Chemistry through Biotechnology to Digital Technology
Fron2ers of Medicine MaRS
8 May 2013 Mar2n Sumner-‐Smith
Abstract
In the middle of the 20th Century, pharmaceu2cal companies were highly respected and pa2ents depended on their physicians to make healthcare decisions. Drugs were a key part of a physician’s ‘toolkit’. As we entered the era of the blockbuster drugs, most were small molecules made by chemical synthesis, but biotechnology was star2ng to emerge as a possible source of new therapeu2cs. Meanwhile, direct-‐to-‐consumer pharmaceu2cal adver2sing began to empower pa2ents. Fast forward to today, and we see pharmaceu2cal companies suffering degraded reputa2ons and values, pa2ents further empowered by the Internet and social media, and average life expectancies increased by a decade. Digital health technologies are posed to explode and the top 10 pharmaceu2cals by sales will soon all be biologicals!
About me
Martin Sumner-Smith, PhD
Academic – Biotechnology – Bioinformatics – Enterprise – Advisory
1970’s 1980’s 1990’s 2000’s 2010’s
http://en.wikipedia.org/wiki/Kondratiev_wave
Global Core Systems
The world’s 4 trillion dollar challenge, Using a system-of-systems approach to build a smarter planet – IBM
Inefficiency in Healthcare
The world’s 4 trillion dollar challenge, Using a system-of-systems approach to build a smarter planet – IBM
Pharmaceuticals
Digital Health
Biotechnology
Medicinal Chemistry
“…the industry has seen itself as an independent product supplier to healthcare
rather than as an integrated part of, and collaborator with, the other par8cipants in the
ecosystem.” Fade or flourish? Rethinking the role of life sciences companies in the healthcare ecosystem – IBM
Market Growth
Patent Expiry
Fade or flourish? Rethinking the role of life sciences companies in the healthcare ecosystem – IBM
Declining R&D produc2vity
Fade or flourish? Rethinking the role of life sciences companies in the healthcare ecosystem – IBM
R&D Success vs. Expenditure
Identifying R&D outliers Peter Tollman, Yves Morieux, Jeanine Kelly Murphy & Ulrik Schulze Nature Reviews Drug Discovery 10, 653-654 (September 2011)
Identifying R&D outliers Peter Tollman, Yves Morieux, Jeanine Kelly Murphy & Ulrik Schulze Nature Reviews Drug Discovery 10, 653-654 (September 2011)
http://www.lek.com/sites/default/files/in_vivo_new_face_of_blockbuster_drugs_l.e.k.pdf
Life Sciences Industry Trends…
• Blockbuster era comes to an end • Strong sales growth but declining expecta2ons
§ P/E for large-‐cap biopharma fell from 35x in 2000 to 11x in 2010
§ Pricing and access pressures § Higher scien2fic hurdles § More stringent regulatory hurdles § Increased compe22on § R&D actually destroys value in some organiza2ons!
Slide 19
Time
Mar
ket G
row
th
Technology Adoption Life Cycle
Growth Market Mature
Market Declining Market
Indefinitely elastic middle period
End of Life
A
Fault Line!
E
D C
B
The Category Maturity Lifecycle
Category Lifecycle
Slide 20
Experiential Innovation
Marketing Innovation
Innova2on Types for Mature Markets – Customer In2macy Zone
Customer Intimacy Zone
Enhancement Innovation
Line Extension Innovation
There are four types of innovation in the Customer Intimacy Zone
Slide 21
Market Access
• Moore describes this further market development as ‘frac2liza2on’ of core markets
PC
1970’s 1980’s 1990’s 2000’s 2010’s
First DTG in 1981 Merck’s Pneumovax in Reader’s Digest
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3278148/
http://www.zoloft.com/
Average Life Expectancy
https://www.google.ca/publicdata
TRIZ
Genrich Altshuller: “Theory of Inven2ve Problem Solving”
1. Problems and solu>ons are repeated across
industries and sciences 2. Pa?erns of technical evolu2on are also
repeated across industries and sciences 3. Innova>ons used scien2fic effects outside the
field in which they were developed http://en.wikipedia.org/wiki/TRIZ
http://www.triz-journal.com/archives/1998/12/a/
http://www.lek.com/sites/default/files/in_vivo_new_face_of_blockbuster_drugs_l.e.k.pdf
http://www.lek.com/sites/default/files/in_vivo_new_face_of_blockbuster_drugs_l.e.k.pdf
Therapeu2c Foci
Fade or flourish? Rethinking the role of life sciences companies in the healthcare ecosystem – IBM
Market Leading “Pharmaceu2cals”
• In 2012 the top pharmaceu2cal was a biological for the first 2me § Abbvie’s HUMIRA
• “By 2020 the top 10 pharmaceu8cals will all be biologicals” – Steve Burrill
Sales Erosion aaer Patent Expiry
Small Molecule
Biologicals
Measuring the return from innovation: Is R&D earning its investment? – Deloitte
Ultra-‐Orphans
http://www.forbes.com/sites/matthewherper/2012/09/05/how-a-440000-drug-is-turning-alexion-into-biotechs-new-innovation-powerhouse/
Alexion’s Soliris
R&D Innova2on
• Rising costs, especially sunk cost for failures § Late stage failure rates too high
• Declining output § Need to simplify opera2ons
• Costs 7x in 25 years § Cost per new drug now $1.1 -‐ 1.7 billion § Slow pace of discovery and valida2on § Inefficient pa2ent recruitment
• 80% miss deadlines, average 90 day delay
§ Complex analysis required for trial termina2on
Risk Mi2ga2on
The future of the life sciences industries: Transformation amid rising risk – Deloitte
http://www.forbes.com/sites/johnnosta/2013/04/16/digital-health-will-pharma-follow-or-lead/
Life Sciences Industry Trends
• Tradi2onally: A high-‐risk, high-‐margin business
• But increasing pressures: • Loss of patent protec2on & compe22on from generics • Costs of innova2on and R&D skyrocke2ng • Reimbursement ceiling and demands • Increased transparency required by regulators & others
• Drive a move to: Managed risk and more conserva>ve margins
“The life sciences industry stands at a crossroads. Its business model is broken,
and the surrounding healthcare ecosystem is changing drama8cally.
So how should companies respond?
They can carry on as normal and poten8ally fade into insignificance
or completely rethink how they engage with the other stakeholders in the healthcare ecosystem in an
effort to flourish anew.” Fade or flourish? Rethinking the role of life sciences companies in the healthcare ecosystem – IBM
“…you can’t meet the challenges of tomorrow with yesterday’s tools—and expect to survive.”
The future of the life sciences industries: Transforma2on amid rising risk
– Deloiie
Pharmaceuticals
Digital Health
Biotechnology
Medicinal Chemistry
“One of the key drivers for the future lies in using informa8on to create more personalised care and
standardisa4on at the same 8me. We are witnessing the ‘industrial revolu8on’ of healthcare, enabled by IT”
– PA Consul2ng
“And while the industry remains data rich, it is weaker when it comes to turning data into insights.”
Fade or flourish? Rethinking the role of life sciences companies in the healthcare ecosystem – IBM
From vision to decision: Pharma 2020 – pwc
Engaging the Pa2ent
http://www.ted.com/talks/jamie_heywood_the_big_idea_my_brother_inspired.html
“The shiPing trend in pharma towards increased adop8on of IT beyond their tradi8onal needs and exploring new IT avenues in digital marke4ng,
regulatory submissions, predic4ve analysis & cloud compu4ng has become more evident in the last few
years.”
IT Life Sciences Summit 2012: Technology Enabled Pharmaceu2cal Business Transforma2on – DIA
Cha
nge
Time
Achieved
Expected
Gartner’s Hype Cycle
Source: http://www.infoq.com/news/2012/08/Gartner-Hype-Cycle-2012
http://rockhealth.com/2013/04/2013-digital-health-funding-update/
http://www.xcubelabs.com/mhealth-infographics.php
Smartphone/Tablet base features
• Processor • Local and Cloud storage • Distant communica2on • Time • Loca2on • Ac2vity • Local communica2on • Camera…
Wearables
IMS estimates $14 million in 2011 rising to $171 million by 2016
Add-‐ons
Proteus Digital Health
The Internet of things – M2M
Watson
Where do the data go?
Synergy
“At 8:03am you used your asthma puffer while entering the MaRS concourse,
walking at a moderate pace towards the Tim Horton’s aPer an unusually long
subway ride. Your pulse was 110, blood pressure 135/80, temperature 37.2, blood
glucose…”
“Based on data collected to date I es8mate that there is 78.9% probability of an allergen to which you react present at the following
loca8ons…”
Pa2ent empowerment trends
Thank you
Martin Sumner-Smith, PhD Email: martins@digitalforhealth.com Office/Mobile: 1 (416) 727-4426 Web: www.DigitalForHealth.com Twitter: @martinss Linkedin: http://ca.linkedin.com/in/martinss
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