NGP EU 7

www.ngpharma.eu.com • Q2 2009

RIDING THE WAVEBernhard Kirschbaum surfsthe financial downturnPage 34

NICHE MARKETShire carves out a specialplace in big pharmaPage 40

CHANGE MANAGEMENTWhy restructuring is the wayforward for GSKPage 86

CLOSED DOOR POLICYJustin van Gennep examinesthe increasing power of payorsPage 138

STORMWeathering the

How will the European pharmaceutical industryavoid getting soaked by the recession?

Page 28

COVER NGPEU7 v3:apr09 08/04/2009 14:11 Page 1

Innovex.indd 2 8/4/09 13:18:00

Innovex.indd 3 8/4/09 13:18:03

Genostar.indd 1 8/4/09 13:16:12

FROM THE EDITORRough weather aheadHow will the industry stay afloat in turbulent times?3

“In our setting, there is no need to dosomething that helps in the short termbut which in the long term would be amistake” Bernhard Kirschbaum, EVP of R&D for MerckSerono (Page 34)

“We’re projecting to hire in 2009 in aprudent way. It’s completely justified bythe growth of the business” Sylvie Grégoire, President of Human GeneticTherapies, Shire (Page 40)

“We’re making changes that will makeus stronger. If we don’t make them now,we’re not going to be standing when it’shavoc in the industry” Moncef Slaoui, Chairman of R&D, GSK (Page 86)

It’s been a tough few months for the pharmaceutical industry, on both sidesof the Atlantic. Mergers, layoffs, cost-cutting exercises – it seems we are not

immune to the stormy effects of the global financial crisis after all.

Or are we? The main merger and layoff activity so far has been centred on

American companies. Pfizer/Wyeth and Merck/Schering-Plough are all US-

based, with Roche/Genentech being the obvious exception. The Pfizer/Wyeth

merger alone will result in the loss of 20,000 jobs.

By contrast, some European companies seem to be doing rather well. Late

last year, Novartis said its profit had reached €6.2 billion and that sales had

increased nine percent. The company also boasts the largest cash reserves

among the big players – €11.4 billion.

German drugmaker Boehringer Ingelheim has invested €1.73 billion in re-

search and development in the last year, and has added 400 new employees.

Shire, with headquarters in both the UK and the US, has hired 2500 people in

the last three years.

This is no time to be smug, however. As the latest report from

PricewaterhouseCoopers points out, big pharma’s strategy of putting all its

money on a few molecules and turning them into blockbusters looks to be run-

ning out of steam. Productivity in the lab will drop sharply as companies turn

their attention to more unusual or complex diseases in an attempt to replace

drugs going off patent. The report also quotes estimates that generic erosion

will knock between two and 40 percent off the revenues of the top 10 compa-

nies between now and 2015.

No matter how relatively secure we feel in Europe, watching as events un-

fold across the ocean, we can’t escape the fact that the pharmaceutical indus-

try is international. We too will face our own patent expiries and will find

ourselves staring the dearth of new blockbusters in the face. It may not be on

quite the dramatic scale that we’ve seen in the US, but change is coming,

whether we like it or not.

Depending on how you look at it, this is either the time to take bold

risks – when there is little to lose – or to hunker down and protect what

we’ve got. Perhaps the best strategy will be a little of both: look after our

core assets, but at the same time embrace new opportunities. It will be in-

teresting to see which companies master the art of staying afloat in the trou-

bled waters of 2009.

Marie Shields

Editor

EDITORS NOTE:apr09 08/04/2009 14:19 Page 3

Teradisc.indd 1 8/4/09 13:25:37

28

34

5CONTENTSFEATURES

Standing out fromthe crowdShire carvesa recession-defyingniche

86

Riding the waveWhy BernhardKirschbaum isn’t worriedabout the crisis in thefinancial markets

Sink or swimHowwill we keep our heads above water in the wake ofthe financial downturn?

40

Ringing the changesHow Moncef Slaoui is radical-ly restructuring GSK’s R&D

CONTENTS NGPEU7:jan09 8/4/09 13:44 Page 5

KDM1.indd 1 8/4/09 13:18:35

59

CASE STUDY

32 Dave Champagne, ThermoFisher Scientific

76 Slim down, tone upNovartis’Steve Dreamer explains why Lean

works in continuousmanufacturing

92 Leaping ahead in translationalmedicineAmgen’s Brian Kotzin translates science into

medicine

102 Building relationships around theglobeJoan Shen extols the benefits of international

clinical trials

116 The genetic advantageAllen Roses on using pharmacogenetics to

make clinical trials more efficient

126 Pest controlHow an ad featuring a rat helped theMHRA

raise awareness of counterfeit medicines

INDUSTRY INSIGHT

52 Martin Svantesson,Geodis Wilson70 Patrick Boosyut, Siemens114 Jeff Spitzner, Rescentris130 Zheng Wang, MPI Research132 Martin Crockard, Randox134 Andrew Reaume, MeliorDiscovery Inc138 Justin van Gennep,Innovex

ASK THE EXPERT

90 Waters98 Ethan Smith, Metastorm100 Richard Lake, RestekCorporation106 Peter Duncan, Definiens AG118 Robertus van Miltenburg,Roche Diagnostics122 Gerd Maass, RocheNimbleGen124 Kamni Vijay, Bio-RadLaboratories128 Jean-Luc Tardieu, CisbioBioassays146 Sybille Queißer, sellxpertGmbH & Co KG

7CONTENTSMANUFACTURING, RESEARCH AND DEVELOPMENT

44 Cut down, collaborate and focuson the customerPfizer’s Kim Sendall is busy designing the

manufacturing facility of the future

54 New concepts in risk controlBayer’s Helmut Mothes examines the success

of Leanmanufacturing

64 Turbulence aheadSammy Rashed on ensuring supply chain se-

curity in these stormy financial times

138 Justin van Gennep

ROUNDTABLE

59 Contract manufacturingWith Grindeks’ Lipmans Zeligmans,Anders Ulfhielm of Rechon Life Scienceand Jim Kernan of PharmaFlow Ltd

72 OutsourcingWith Piramal Healthcare’s Aidan Walker,Aesica Pharmaceuticals Ltd’s KeithPayne, Shasun Pharma Solutions Ltd’sKevin Cook and Fine Organics Ltd’sKeith Hanson

83 Supply chainWith Jean Bédard of AlternativesTechnologie Pharma Inc and RichardHarrop of SCA Cool Logistics

109 Drug discoveryWith Simon Wood of STARLIMS Corporationand Ed Addison of TeraDisc

114 Jeff Spitzner


SCA1.indd 1 8/4/09 13:23:33

148

IN THE BACK152 Travel 154 In review 156 Profile: Janez Potocnik158 Events 160 Final word: John Singer explains why this is agood time for creative leadership

152

9CONTENTSMARKETING AND TECHNOLOGY

PLAT I N UM S P O N S O R

Philippe Goix

EXECUTIVE INTERVIEW

50 Manfred Zurkirch,Divdella AG96 Xavier Cristina,Applied Biosystems112 Andreas Persidis,Biovista Inc120 Philippe Goix, Singulex Inc144 Sati Sian, IMS Health

120

136 Patient powerIsabelle Mercier explores the power of patient

influence inmarketing

141 The grass is always greenerAstroturfing and big pharma

142 Down but not outFrost & Sullivan’s latest survey showsmar-

keters are not giving up the fight

148 Virtual realityHow telepresence is changing the way we

do business


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MILNE, JULIAN ROGERS, HUW THOMAS

Creative Director ANDREW HOBSON

Design Directors ZÖE BRAZIL, SARAH WILMOTT

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Legal InformationThe advertising and articles appearing within this publication reflect the opinions andattitudes of their respective authors and not necessarily those of the publisher or

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15-17 September 2009The Park Hotel Bremen, Germany

The Next Generation Pharmaceutical Summit isa three-day critical information gathering of

C-level technology executives from thepharmaceutical industry.

A Controlled, Professional and Focused Environment

NGP ’09 is an opportunity to debate, benchmark and learnfrom other leaders. NGP ’09 is a C-level event reserved for75 participants that includes expert workshops, facilitatedroundtables, peer-to-peer networking, and coordinated R&D

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A Proven FormatThis inspired and professional format has been used byover 100 R&D executives as a rewarding platform for

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CREDITS NGPEU6:apr09 08/04/2009 14:17 Page 10

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12 www.ngpharma.eu.com

FRONTLINE12

DON’T LET THEBED BUGS BITE

hosts, in places likemattress

seams, crevices in the bed, be-

hind the headboard and

loose wallpaper.

Fromwhatwe

know, bedbug

bites tend to be

more of an irritant

than anything, al-

though they can cause

some skin reactions.

However, their potential to serve

as ‘disease vectors’and howbest

for thousands of years.

Infestations are rising fast;more

so in developed coun-

tries, probably due to

international travel,

immigration,

changes in how

pests are con-

trolled and insecti-

cide resistance, wrote

the study’s authors.

Bed bugs prefer to hide

within a fewmetres of their

Bedbugsprefer tohidewith ina

of their hostsfew feet

A US STUDY looking at the

available evidence on bed bugs

found that while they are high-

ly resistant to a number of

methods of extermination, they

are likely to be more of a nui-

sance than a serious health

problem. However, the possi-

bility that they could one day

be vehicles for disease needs

further research.

The bedbug (Cimex lectular-

ius) has been a humanparasite

UPFRONT NGP EU7:nov08 8/4/09 13:30 Page 12

13www.ngpharma.eu.com

13FRONTLINE

trol articles from 1960 to 2008.

They also didmanual searches

for older texts in jour-

nals, textbooks,

trade journals and

newspapers from

1892 to 2008.

For the clini-

cal studies, they in-

cluded original

accounts of bed bug in-

vestigations that had enough

detail of cause and effect be-

tween the insect bites and clini-

cal effects and sufficient evi-

dence that bed bugswere the

source of the bites.

The researchers found 53

articles thatmet these criteria,

but only found two clinical trials

that tested the ability of pest

control interventions to eradi-

cate the insects. They also found

that a variety of clinical reactions

to bedbugswere reported,

mostly skin reactions.

to control and eradicate them is

notwell understood.

For the study, which

was published online

in the Journal of the

American Medical

Association, JAMA,

JeromeGoddard

and Richard

deShazo from the

University ofMississippi

Medical Center searched data-

bases formedical and pest con-

Bed bugbites tend to be

more of a

than anythingnuisance

Factor by which pregnancymakes a woman moreattractive to malaria-carrying mosquitoes:

2

Up to

people in Europe bear arisk of developing a severeallergic reaction after being

stung by an insect

15 million

Maximum number ofmonths humanity

could survive withoutinvertebrates:

6

NUMBER CRUNCHING

Between

people die each year inthe US from insect sting

allergies

40-100

Estimated number offireflies it would take to

generate the visiblebrightness of the sun:

14,286,000,000



FRONTLINE14GRACE INTRODUCES REVELERIS FLASH

MP5ANDCRÉAPHARM, sub-

sidiaries of CréapharmEurope, are

pharmaceutical contractmanufac-

turers, committed to investigation-

almedicinal product development

and supply.

CréapharmEuropeoffers

biotechandpharmaceutical com-

paniesa complete rangeof ser-

vices, fromthedevelopment to the

distributionof clinical batches.

MP5specialises in thedevel-

opmentandproductionof injecta-

bles, liquidor lyophilised, supplied

invials,bagsorsyringes, inparticu-

lar for substances requiringcon-

finement/isolators (highpotency

drugsorcytotoxics forexample).

Créapharm is oneof Europe’s

leading investigationalmedicinal

products suppliers.

Créapharm is

registered by the

French health

products safety

agency (AFSS-

APS) for the pro-

duction,

packaging and distri-

bution of investigational

medicinal products.

Créapharm specialises in

four fields, the first being manu-

facturing. Créapharm provides

capsule blinding as well as man-

ufacturing of placebo capsules

(Coni-Snap and DBcap cap-

sules). Our highly experienced

staff react quickly and efficiently

to customer needs, thanks to

our high-performance semi-au-

tomatic machines; and our over-

encapsulation capacity is the

largest in Europe.

Créapharmalso specialises in

packaging: primarypackaging

(blister packs andbottles), sec-

ondarypackaging (boxesor blister

cards) andpackaging for open-

CONTRACT MANUFACTURING

label or doubleblind studies.

Since 1990, Créapharmhas

completed the full packagingof

6000 clinical batches.

Créapharmoffers its cus-

tomers a high expertise in la-

belling andquality services.

Included in this are labels for

one or several panels, black

andwhite or colour printing,

multilingual texts (all alphabets

and ideograms), decoding en-

velopes and randomisation

(imported or generated).

We are committed to offer-

ing reactivity, assistance,

transparency, 100 percent

traceability and reliability, and

distribution. The serviceswe

use for this are importation

and European phar-

maceuticals re-

lease, along

with distribu-

tion through-

out theworld,

thanks to our

strongworld-

wide partnerships.

We also provideman-

agement of dangerous prod-

ucts (narcotic and

psychotropic drugs) and ex-

press shipments at controlled

temperatures (positive or neg-

ative), alongwith returns,

checking and reconciliation,

and destruction at the end of

the studies.

Our carriers are audited

and certifiedevery year in order

to offer you thebest services.

In the last 10 years

Créapharmhashandled

250,000 shipments to investi-

gational sitesworldwide.

Weare absolutelymindful

of our customers needs. You

need thebest,wedo thebest!

Web: www.discoverysciences.com/Reveleris

The information presented herein is derived from our testing and experience. It is offered foryour consideration and verification. Since operating conditions vary significantly, and are notunder our control, we disclaim all warranties on the results that may be obtained from theuse of our products. Grace reserves the right to change prices and/or specifications withoutprior notification. W. R. Grace & Co.-Conn. and its subsidiaries can not be held responsiblefor any damage or injury occurring as a result of improper installation or use of its products.

REVELERIS, SRC, and REVEALX, are trademarks of Alltech Associates, Inc.

Alltech Associates, Inc. is a wholly owned subsidiary of W. R. Grace & Co.-Conn. GraceDavison Discovery Sciences is a product group of W. R. Grace & Co.-Conn., which nowincludes all product lines formerly sold under the Alltech brand.

GRACEDAVISONDISCOVERY

SCIENCEShas introduced the

Reveleris FlashChromatography

System,a leap forward inenhancing

productivity indrugdiscovery.The

benefits tomedicinal chemists in-

cludeseeingpotentialmolecules

theymaybecurrentlymissingwith

UV-onlydetection,alongwith less

reworkneededdue tohigher frac-

tionpurityand improveddetection,

more targetmaterial collectedand

greater throughput.

TheReveleris Flash

ChromatographySystem isa com-

binationofGrace’s collectiveexper-

tise in silicagel

manufacturing

anddetector

technology,

creating thenext generationof

flashpurificationsystems.The

patent-pendingRevealX technolo-

gydetectsboth chromophoricand

non-chromophoricmolecules.This

technologyovercomes the limita-

tionsof traditionalUVdetection,

whichwill onlydetect chromophor-

ic components, andcanmissany

non-chromophoric impuritiesor

compoundsof interest.

The system is equippedwith

Radio Frequency ID (RFID) labeled

Reveleris SRC cartridges, which

are packedwith a specially devel-

oped grade of silica and have a

higher pressure rating. These car-

tridges improve purification by

significantly boosting system res-

olution, sample loading and re-

covery. By increasing sample

loads on a given cartridge size

and reducing run times, sample

throughputs and yields increase,

making overall purification costs

lower, the systemoffers a foot-

print that allows it to easily fit in a

fumehood. Its intuitive

software and graphical

interfacemake it

very easy to use.

The

RevelerisFlash

Chromatography

Systemisoneof

arangeofGrace’s

solutions fordrug

discoverypurification

andanalysis.

Créapharm isone of Europe’s

investigationalmedicinal products

suppliers

leading



FRONTLINE 15THE LATESTGENERATIONof ABB’s PATsolu-

tions, Industrial IT eXtended Process

AutomationTechnology (xPAT), provides sim-

plified engineering and streamlined integration

with enterprise systems, aswell as broad con-

nectivity to a host of analysers to help cus-

tomers achieve continuous process

improvement, real-time product release and

Quality byDesign (QbD).

As a leading-edge quality control concept

in the biopharma industries, PAThas increas-

ingly gainedworldwide acceptance bymany

industry experts as a provenmethod of ensur-

ing product safety and quality. It promotes the

integration of analyticalmeasurements into

themanufacturing process to streamline and

improve newproduct development aswell as

improving the quality and ensuring the safety

of the end product.

With its powerful integration capabilities

and functionality, xPAT helps life science in-

dustry customers implement QbD through-

out the entire pharmaceutical product

lifecycle, from drug discovery through devel-

opment to production.

ABB’s Industrial IT solutions for PATandau-

tomationare applicable to the completeprod-

uct lifecycle – fromdevelopment, through scale

up tomanufacturing. ABBprovides an integrat-

ed environment for easeof engineering, data

andprocess visualisation, datamanagement,

multivariate advanced statistical process con-

trol andenterprise connectivity. Interoperability

with analysers is assuredbya commonconfigu-

rator and industry standardanalyser interfaces

basedonOPCUA technology.

xPAT integrates analytical and automation

products in a flexible and scalable platform. It

provides a single configuration formulti-ven-

dor analytical instrumentation, data acquisi-

tion and central storage of all analyser and

process related data.

The PATdatamanagement and control

platformallows users tomanage analyser con-

trol parameters, store analyser data andper-

formmultivariate data analysis for process

monitoring and control.

Learn more at: www.abb.com/lifesciences or email us at:[email protected].

ATLEAST20MILLIONEuropeanssuffer from

chronic, long-termsleepdisordersevery year,

and10millionmorehaveoccasional sleeping

problems.Sleep facilitieshavewitnesseda

rise inpatientsof 10percent in the last 12

months, and thisnumber is expected

togrow furtherat a rateof near-

ly 13percent in thenext year.

Newanalysis from

Frost&Sullivan,Sleep

Service Providers – A White

Paper on the Scope and

Opportunities in Europe, ex-

amineshospital andnonhos-

pital-basedsleepserviceproviders

(physician-ownedandoperated laboratories).

Thestudy foundannualmedical expenditures

onsleep-relateddisorders tobeaboutUS$10

billion (€7.4billion). Indirect costsdue tolowerproductivityandother factorswereesti-

mated tobemuchhigher.

“A part of the boost in sleep facilities is

RISE IN SLEEP DISORDERS due to the steady rise in childhood and adult

obesity rates, which could be a contributing

factor to obstructive sleep apnea,” said Frost

& Sullivan Senior Research Analyst Janani

Narasimhan. “According to doctors, more

awareness about treatment options through

media dissemination along with referrals

from friends and family members have

also added to the increase in

sleep facilities.”

Despite the rise in thenum-

berof reportedsleepingdisor-

ders, it is estimated thatmany

of thoseaffected remainundi-

agnosed.There remainsa lackof

awarenessaboutasymptomatic

sleepdisorders,whichhas resulted indi-

minishing ratesof testing.Manypeopledevelop

cognitivedeficits after a fewnightsof reduced

sleepqualityorquantityandnewevidencesug-

gestsmorehealth-relatedconsequencesof

sleepdebt suchas commonviral illnesses,dia-

betes, obesity, heart disease,depressionand

otherage-relatedchronicdisorders.

At least

Europeans sufferfromchronic, long-termsleepdisorders

every year

20 million

RESEARCHERS HAVE

DISCOVERED human anti-

bodies that can neutralise not

only H5N1 bird flu, but also other strains

of influenza. The antibodies, com-

prised of immune system pro-

teins, may be used to protect

frontline workers and oth-

ers whomay be at high

risk should a pandem-

ic of flu break out.

PAT SOLUTION

The initial tests onmice, done

by scientists in Hong Kong and the US,

have shown to be highly effective. The

speed of antibody response is report-

ed to be far higher than the H5N1 bird

fly vaccine produced by sanofi-aven-

tis for humans.

PROTECTION AGAINST BIRD FLU



16 FRONTLINE

ANOVER-THE-COUNTERDIETARY

SUPPLEMENTtakenbyarthritispa-

tientshasbeen foundtobenotas

effectiveasonce thought.

Glucosamine,asubstance that is

naturallyproduced in thebody,has

failed toemerge fromtrialsasasuit-

ablesupplement for sufferers.

Anomalies in thewide-ranging

resultsof the trialsofglucosamine

sulphatemeanthe resultsof the

studyare inconclusive,and there-

fore thecompound is toounstable

tobeusedasasupplement.

Anotherstudywasconducted

asa follow-up to theglucosamine

trial; thesecondstudyalso tested

chondroitin sulphate,acarbohy-

drate thathelpscartilage retain

water,which isoften taken incombi-

nationwithglucosamine.The re-

sultsof thestudydeemedthe

substance tobe justasunreliableas

straightglucosamine,and therefore

no treatmentcouldbesuggested.

SUPPLEMENT FAILINGS

ZYDUS CADILA, based in

Ahmedabad, India, has

signed a new drug discovery

and development agreement

with Eli Lilly that aims to in-

crease productivity in drug

discovery and development

by alligning the unique

strengths of both compa-

nies. The collaborative re-

search programmemay

continue for up to six years,

according to a Zydus

spokesperson.

Lilly will have an option

to license resultingmole-

cules at different stages.

Zydus would receive pay-

ments of up to $300million

and royalties on sales.

AGREEMENT SIGNED

THEEUROPEANMEDICINES

AGENCYhas said thatGardasil,

thehumanpapillomavirus vac-

cineproducedbyMerck&Co., is

safe touse and is unlikely to

have caused twogirls in Spain to

become ill. An expert committee

reviewed the two cases and reg-

ulatorswill continue to recom-

mendvaccinationwithGardasil

“in accordancewith national

vaccinationprograms inmem-

ber states”of the

European

Union.

GARDASIL DEEMED SAFE

ANEWREPORTby theWorld

HealthOrganization showsa close

linkbetween tuberculosis and

HIV.The report says that nearly

9.3millionpeoplebecame ill with

tuberculosis in 2007, andof these

newcases, 1.4million – 15percent

–were linked toHIV.

TheTB Control report finds

HIV LINKED TO TB

THEBIOLEVITATOR is thefirst

benchtop3Dcell culturesystemon

themarket,deliveringsignificant

productivitygains to researchers in

drugdiscovery, cell-based thera-

peuticsandregenerativemedicine.

TheBioLevitatorbrings theengi-

neeringandautomationexpertise

ofHamilton togetherwithGlobal

CellSolutions’uniqueapproach to

cell culture forascalable

andautomatedsys-

temthat reduces

costswhile im-

proving the

consistencyand

relevanceof cul-

turedcells.

TheBioLevitator

eliminatestraditionalpe-

ripheralcellcultureinstruments,

suchasincubatorsandcentrifuges,

andminimisesmanualhandling.

EachoftheBioLevitator’sfourhy-

drophobic,PTFE-filtered50mLcell

culturetubescanproducecell

growthequivalenttouptotenT75

flasks,dependingonthecell line.

Thesystemfeaturesauser-friendly

touchscreen interfacewithreal-time

monitoring,andcontrolofenviron-

mental temperatureandCO2levels.

TheBioLevitator utilises the

Global EukaryoticMicrocarrier

(GEM) technology fromGlobal Cell

Solutions.TheGEMprovides an

HAMILTON UNVEILS BIOLEVITATOR

optically clear andnon-autofluo-

rescent pipettable substrate for

adherent cell lines. TheGEMs

containsparamagnetic particles

that facilitate suspension in the

LeviTubeandmedia changes.

Customprotein coatings are

available to facilitate growthof

difficult cell lines and theGEM’s

hydrogel core inhibits ice crys-

tals during cryopreserva-

tion, ensuringhigh

survivability and

cell function.

Hamilton

Company is a

leadingworldwide

supplierof precise

liquidhandlingde-

vices, laboratoryautoma-

tionandstoragesystems,

servingcustomers inacademic

andprivate research laborato-

ries, pharmaceutical and clinical

diagnostic companies and gov-

ernmental institutions. Hamilton

maintains headquarters in

Reno, Nevada, US andBonaduz,

Switzerland, both ofwhich

house R&Dandproduction facil-

ities. Hamilton has subsidiaries

for direct sales and service in

many countries andworkswith

awide distributor network in

other regions. Hamilton is a pri-

vately held company.

oneout of fourTBdeaths, or near-

ly half amilliondeaths, isHIV-re-

lated, nearly twice asmanyas

previously realised. According to

theWHO, the escalatingnumber

ofTBdeaths amongpeople in-

fectedwithHIV showsaneed for

a joint,well-coordinated response

to the twoepidemics.

is the first benchtop3D cell culture system

on the market

TheBioLevitator


Burket.indd 1 8/4/09 13:12:40

My experience at Heinz was of great benefit tomy ca-

reer in the pharmaceutical industry. Innovation is very im-

portant in the consumer packaged goods world, because

it’s a fast-movingmarket. You can come upwith an idea

and launch a product within 12months. Things are con-

stantly changing, and that changingmentality has

helpedme to look at things and think about innovation in

a different way.

When I was first exposed to the pharmaceutical indus-

try in 2002, I grew aware of many of the issues that the

industry was facing, and I found it intellectually stimulat-

ing to see how it was changing. It was clear tome that a

new businessmodel would be required to win in this

changing environment.

The old industrymodel, from a sales executive stand-

point, was focused on the physician, with a strategy to

deliver themessagemultiple times to that physician.

Physicians, however, at least in some parts of the world,

now have less and less say in what is actually dispensed,

as payors and providers andmore restrictivemarkets

shift that balance of power. And yet wewere still ad-

dressing the physician as the sole decision-maker.

The pharmaceutical industry is a good industry, but it

is going through some tough times. The long-term

prospects of the industry are very positive.With an

aging population and with the cost of chronic illness ac-

celerating with that aging population, the capability that

has been created in Novartis in terms of discovering and

developing new and innovative medicines that meet

unmet medical needs is going to position us very well

for the future.

Consolidation among the big players in the industry

hasn’t increased efficiency, or the effectiveness of develop-

ment, and neither has it enabled companies to bettermeet

the needs of patients or other stakeholders.

Development is being restructured to be able to operate

in a tougher regulatory environment.We aremoving from

what has been functional decision-making to cross-func-

tional teams that are empowered and focused around

moving ourmolecule from early development all theway

through commercialisation.

JOSEPH JIMENEZCEO, Novartis Pharmaceuticals

18 FRONTLINEIN MY VIEW


ISSUE IN NUM8ERS

386

106,000 deaths are caused

by adverse drug reactions in

the US each year (p116)

GSK is undertaking a restructuringplan to reduce costs by

over the next two years (p28)€2 bilion a year

Between 600,000 and

die every year in the developing world fromrotavirus-induced diarrhoea (p86)

800,000 babies


FRONTLINE 19A STUDY BY BOSTON RE-

SEARCHERS published in the

journal Psychotherapy and

Psychosomatics found that most

of the psychiatrists on the

American Psychiatric

Association panels who wrote

the newest clinical guidelines on

treating depression, bipolar dis-

order and schizophrenia had fi-

nancial ties to drug companies.

Lisa Cosgrove of the

University of Massachusetts-

Boston and colleagues

searched publicly accessible

databases such as Medline and

the records of the federal patent

office to identify financial ties.

Eighteen of the 20 authors

had at least one financial tie to

drug companies. Twelve authors

had ties in at least three cate-

gories, such as consulting, re-

search grants, speaking fees or

stock ownership. The study also

found that all of the authors of

schizophrenia and bipolar

guidelines had relationships

with the drug industry, while 60

percent of the authors of the de-

pression guidelines had similar

connections.

BAD CONNECTIONSDRIVING RETURNS FROM YOUR ERP INVESTMENT

MANY ORGANISATIONS FAIL to

deliver the benefits which were

envisaged in the original busi-

ness case for their ERP sys-

tem investment.

Some of the com-

mon reasons for

this are due to a

lack of focus on

benefits realisa-

tion during im-

plementation or

from taking inade-

quate account of process

and organisational change. This

also may be the case because of

insufficient education and train-

ing of the users, as well as post-

ponement of the implementation

of some parts of the system due to

implementation fatigue or bud-

getary constraints.

When this hap-

pens, a very expen-

sive asset is being

significantly under-

utilised. The

Enterprise Resource

Planning (ERP)

Assessment is a low cost

approach to identifying oppor-

tunities for improvement and pre-

senting potential benefits to the

senior management team.

Most ofthe cost of the

implementationhasalreadybeen

incurred

ERP system

An orphan disease is one that

hits anywhere between 2000 and

250,000 people (p40)DELIVERABLESAn assessment is made of current operations and of how the ERP system isbeing used to support and improve the business processes. An analysis of re-sults and identification of opportunities for improvement is produced to pro-vide an estimate of benefits resulting from those opportunities, which oftencome in the form of a prioritised list of potential improvement initiatives. Afeedback presentation is then made to senior management outlining the po-tential benefits and proposed implementation approach.

BENEFITSMost of the cost of the ERP system implementation has already been incurred– the ERP Assessment is about identifying how to drive further benefits fromthe initial investment. The assessment and feedback processes are highly en-gaging and interactive, which helps to build ownership and commitment to theimprovement initiatives, and many of the initiatives identified are likely to below investment in relation to the return, and therefore will be self funding.

For more information on this service, please visit www.bsmconsulting.co.uk/erp-assessment.


FRONTLINE20 INTERNATIONAL NEWS

SANOFI PASTEUR, the vaccines division of

sanofi-aventis, has announced that Emerflu, its

pandemic influenza vaccine for use in humans,

has been grantedmarketing authorisation from

the Australian Therapeutic Goods Administration.

The vaccine is now approved for the prevention of

pandemic influenza in Australia upon official declara-

tion of a pandemic. It is intended to bemanufactured

and distributedwith the identified pandemic strain and

used in Australia in accordancewith official Australian

government practice.

Theapproval follows thepositive rec-

ommendationby theAustralianDrug

EvaluationCommittee in February,

basedona reviewof results fromclini-

cal trials,whichbegan in late 2004on

H5N1alum-adjuvanted inactivated in-

fluenza vaccine candidates.The trials

evaluated the safety andability of

the vaccine to elicit a protective im-

mune response to theH5N1 strains

currently identifiedbyglobal health

authorities andexperts as apoten-

tial source for thenext pandemic.

PREVENTION OF MAJOR BIRTH DEFECTS

A STUDY UNDERTAKEN by a group of researchers based in

Washington, DC, has found that women need enough vitamin

B12, in addition to folic acid, to cut the risk of having a baby

with a serious birth defect of the brain or spinal cord. One of

the researchers, Dr. James Mills of the US NIH, said the study

showed that vitamin B12 deficiency was a risk factor for neural

tube defects independent of folic acid, another B vitamin.

Irish women have been found to have the lowest vitamin

B12 levels, and are therefore five times more likely to have a

baby with a neural tube defect.

In response to the results

found in the study, Mills has

advised that women

who do not eat

meat or

dairy

products to

be particularly

vigilant with their

vitamin B12 intake

during pregnancy.

FLU VACCINE APPROVED IN AUSTRALIA

TAKEDA MOVES INTO CANADA

TAKEDA PHARMACEUTICAL

COMPANY LIMITED and its

wholly-owned subsidiary,

Takeda Pharmaceuticals North

America, Inc., has an-

nounced the es-

tablishment of

Takeda Canada

Inc., expand-

ing the compa-

ny’s North

American pres-

ence into the

world’s eighth largest

pharmaceutical market. Takeda

Canadawill be headquartered

inMississauga, Ontario, west of

Toronto, one of the top three

biotech areas in North America.

“Aiming to realise itself as a

world-class pharmaceutical

company, Takeda is striving to re-

inforce a global operating infra-

structure including expanding its

own sales channels. Takeda’s en-

trance into Canada is a sig-

nificant step in

expanding Takeda’s

North American

presence,” said

Yasuchika

Hasegawa, presi-

dent of Takeda.

Takeda Canada

will register and commer-

cialisemedicines fromTakeda’s

portfolio of primary care and spe-

cialty products. Takeda Canada in-

tends to file its first NewDrug

Submission (NDS) with the

Canadian Health Authority by the

end of 2009.

Takedaaims to be a

pharmaceuticalcompany

world-class


NEW CANCER DRUG

FRONTLINEINTERNATIONAL NEWS 21

ONE STEP CLOSER TO COLD CURE

US-BASED Synta Pharmaceuticals

Corp and GlaxoSmithKline have en-

tered into an agreement for the de-

velopment and commercialisation

of the drug Elesclomol. The collabo-

ration was secured upon a €7.5 mil-lion payment from GSK to the

biopharma company that focuses

solely upon the treatment of severe

medical conditions.

Elesclomol is an investigational,

oxidative stress inducer that triggers

apoptosis (programmed cell death) in

cancer cells. It is not yet approved for

any indication in themarket.

The partnership makes Synta

eligible for a total of €440 millionin pre-commercial milestone pay-

ments, of which €40 million havebeen paid to date, €75 million isrelated to additional progress in

melanoma, and the remainder is

related to progress in other cancer

indications.

PROBLEM MERGERS

TEVA PHARMACEUTICALS

INDUSTRIES LTD, the world’s

largest generic drugmaker, re-

ported a fourth quarter loss

following its acquisition of rival

Barr Pharmaceuticals. The

Israel-based company experi-

enced a net loss of €519 mil-lion, compared with a net profit

of €430 million the previousyear. The company acquired

New Jersey based Barr for

€5.62 billion in late December2008, and was forecasted to

post a new profit of €2.19 bil-lion from the merger. In a state-

ment given at the time, Shlomo

Yanai, Teva’s President and CEO

said, “With the integration

process (of Barr) well under

way, we believe we will realise

even greater synergies from the

combination than we initially

anticipated.”

COMBATING COUNTERFEITS

AFORUMheld inSharjah,UAE in

February 2009, saw representa-

tives fromgovernment depart-

ments and theprivate sector

tackle the increasing

worldwideproblem

of counterfeit

pharmaceuti-

cals. The

Middle East has

been specifically

targeted, despite

recent initiatives to

limit the amount of trade

in fake, andpotentially danger-

ous,medicines. SteveAllen,

EuropeandMENASenior

Director ofGlobal Security for

Pfizer, said, “There are lots of ini-

tiativesbeing takenagainst

counterfeitinghere. Butwe can-

not say that theMiddle East region

is freeof fakemedicines, especially

becauseof thepresenceofmany

free trade zones.”

Dubai is the centreof

business transit,with

goods fromAfrica

andAsiapassing

throughen route to

the restof the

world.TheUAE

MinistryofHealth re-

quiresall companies im-

portingprescriptionand

non-prescriptionmedicines toob-

tainapermit tomove their products.

With the importationof fakemedi-

cineson the rise, theMinistrywill be

making the requirements fordrug

tradingstricter andplacingabanon

non-registereddrugs.

The UAEMinistry of Health

will be making

requirements fordrug trading

stricter

US RESEARCHERS have de-

coded the genome for 99

strains of the common cold,

and as a result,may have

comeone step clos-

er to finally find-

ing the

long-awaited

cure. Stephen

Liggett of the

University of

Maryland created

findings froma

process of cataloguing the

vulnerabilities of the virus; he

says the benefits

are a breakthrough for asthma

sufferers and those with chronic

obstructive pulmonary disease.

However, the cost for

the development of

such drugs can be

high. Anti-viral

drug experts pre-

dict the typical

cost of develop-

ing a new drug to

be around €530mil-lion. There is also a long

process of regulations to go.

With the effects of the common

cold being very minor, combined

with an expensive process in

which to manufacture andmar-

ket the drug, it seems unlikely

that the common cold cure

will take off.

The typicalcost of developing

a new drug is around

€530million



FRONTLINE22

DRAGENOPHARMAPOTHEKER

PÜSCHLGmbH is a global contractmanufacturer

for solid forms in thepharmaceutical and the

healthcare sectionwithheadquarters in

Tittmoning. Additional locations areBerlin,

Neuötting andWarstein. The innovative enter-

prisewith highest pharmaceutical

competence is a leadingEuropean

guarantor concerningquality as

regards tomanufacturing and

development of pharmaceuti-

cal products in full service.

DragenopharmApotheker

PüschlGmbHwasestablished in

1949as aprivate companyandhas

alwaysbeendedicated to contractmanufac-

turing.Theenterprise is amember of Aenova, a

leadingEuropeangroupof contractmanufacturing

in solid oral formsof pharmaceutical anddietary

supplement products.

Dragenopharm isexperiencingsteadygrowth

of its fourdifferentplants,withanannualoutputof

COMPETENCE FOR SOLID FORMSP&G OUT OF THE GAME

PROCTOR & GAMBLE is taking itself

out of the pharmaceutical branding in-

dustry in an attempt to focus more

heavily on its high growth business

arms. The company is working with

Goldman Sachs to identify potential

buyers for its consumer products, fol-

lowing record low share prices of

$52.21 (€39.39) in February 2009.The company’s healthcare division,

which includes its pharmaceutical busi-

ness, recorded €11 billion in sales in2008, with a net earning of €1.8 billion.With the company’s focus moving away

from investment into new drug develop-

ment, P&G have now taken the direc-

tion of shedding some of its key

pharmaceutical brands.

sixbillionpiecesof

pressingsand80million

packageswith200mil-

lionblisters.

Dragenopharm’sprod-

uctsaregranulates,

tablets, film-coated

tablets, sugar-coated

tablets, capsules,powdersand

clinical samples inbatchsizes fordevelop-

ment, scalingup toaproductionofup to750kg.

Investments in packaging capabilities with

three new lines for blisters and bottles are now

in focus and Dragenopharm is able to offer a

broad andwide range in all different materials

and quantities with adjusted equipment.

A new administration and laboratory build-

ing in Tittmoning with 7000 sqm of

space was built in 2008 and a huge

capacity for different analytic

methods including EU-release

was created. Transparency was in

all areas provided by the installa-

tion of glass walls.

Transparencymeets security in a

perfectway: all sites andprocedures

meet the requirements ofGMP-guidelines and

ISO27001.

As one of the leading German contract

manufacturers for solid oral forms (European

Best 500 nominee), we deliver finished prod-

ucts mainly to customers within Europe, also to

other continents.

A newadministrationand laboratorybuildingwith

of spacewas builtin 2008

7000 sqm

PROPOSEDREVISIONS to the EuropeanUnion’s

animal testing directive, 86/609/EEC are current-

lymaking their way through the European

Parliament.

According to campaigngroupAnimal

Defenders International (ADI),MEPShave tabled

more than500amendments to theDirective.They

decrywhat theycall a “fierce lobbyingcampaignby

those in theprimate tradeand research industry”

which theysay threatens to tearapart thepropos-

als andopenupa free-for-all in animal experimen-

tation inEurope.

TheUK-basedRoyalSociety for thePrevention

CHANGES TO ANIMAL TESTING

ofCruelty toAnimals (RSPCA)alsovoiced fears that

theCommitteewould“opt toweaken theway the

proposed lawwill regulate theuseof animals inex-

perimentsbecauseof exaggeratedclaims that life-

saving researchwill grind toahalt inEurope if the

proposal is approved in its current form”.

TheUKbiosciencesectorwarned inadeclara-

tion thatmanyof theproposals in the reviseddraft

directive,aswell assomeof theamendmentspro-

posedsince lastNovember, “couldundermineani-

malwelfareeitherdirectlyorbydriving research

abroad,orwouldhinderbiosciencewith littleorno

animalwelfarebenefit”.

The company sawrecord low share

prices of

in February€39.39

€1.8billion

Pharmaceuticalbusiness recorded

in sales in 2008

With a netearning of

€11billion


Dragenpharm.indd 1 8/4/09 13:15:26


FRONTLINE24UK PHARMACEUTICALS giant

GlaxoSmithKline is to spend

US$5.1 billion on re-

structuring its or-

ganisation, the

group’s CEO

AndrewWitty

recently told

the UK’s

Financial Times.

Themove could

see the company cut

thousands of jobs in a bid to

achieve annual pre-tax savings

of US$1.4 billion within the next

In the Q2 2008 issue of NGP, WAYNE PISANO, CEO of sanofi pasteur, em-phasises the fact that the company is the only one in Europe dedicatedentirely to the production of human vaccines. In this exclusive interview,he also divulges his commercial strategy of growing existing core assetsand increasing capacities to answer medical needs in the new market.

Go to www.ngpharma.eu.com to browse ‘Past issues’ and view the coverstory of the Q2 2008 issue, and read Pisano’s vision to create “a world inwhich no one suffers or dies from a vaccine-preventable disease”.

three years.Witty did not say

howmany jobs would be lost –

and claimedmanywould

be reallocated. The

news followed the

announcement

by GSK that it

has sustained a

fall in full-year

pre-tax profits

fromUS$10.7 bil-

lion to US$9.5 billion

on sales, which were up by

seven percent fromUS$32.3

billion to US$34.7 billion.

GSK TO DRAMATICALLY RESTRUCTURE

ANEWREPORT in Cancer

Prevention Research details the

power of the three-day-old broc-

coli sprout to eliminate

Helicobacter pylori (H. pylori) in-

fections, a widespread type of bac-

terial infection and amajor cause

of stomach cancer.

The cancer-protective effects

of sulforaphane, a phytochemical

frombroccoli, have been docu-

mented for almost 20 years.

However, the effect of broccoli in

humans on the bacterial infection

that leads to stomach cancer was

explained for the first time in this

study. Seventy grams of fresh broc-

coli sprouts or its equivalence in al-

falfa sproutswere given daily to 48

Helicobacter-infected Japanese

men andwomen for a period of

eight weeks.

Using tests on the breath,

serumand stool of participants, re-

searchers evaluated the severity of

H. Pylori infection at the start of the

study. Eight weeks later, infection

levels were lower on all threemea-

sures among those patientswho

had eaten broccoli sprouts, while

they remained identical for patients

who had eaten alfalfa sprouts.

THE TRUTH ABOUT BROCCOLI

GSKis to spend

on restructuring itsorganisation

US$5.1billion

FROM THE VAULTSWEDISHSCIENTISTShave

found that heartmuscle cells are

renewedover our lifetime, sowe

are not limited to thosewe

arebornwith.The

discovery could

open thedoor

to treatments

that replace

damaged

heart tissue

with newcells.

The study, by

Professor Jonas Frisén of the

Karolinska

Institutet, in

Stockholm,

TAKE HEART

Sweden and colleagues, was

published online in the 3April

issue ofScience.

The researchers tookad-

vantageof the fact that

carbon-14generated

bynuclearbomb

testsduring the

ColdWargets

intoDNA, includ-

ing that inheart

muscle cells (car-

diomyocytes).This can

thenbeused todate theageof

theheartmuscle cells inhumans.

Frisén and his team found

that heart muscle cells renew

gradually over the human

lifetime, although the rate

declines as we get older.

One per cent of our heart

cells are replaced per year at

age 25 and this falls to 0.45

per cent at age 75.

They also found that

over a normal lifespan,

fewer than 50 percent of

the heart’s muscle cells

are replaced.

Onepercentof our heart cells are

per year atage25

replaced


Oystar.indd 1 8/4/09 13:21:06


FRONTLINECOMPANY INDEX

COMPANY INDEX Q2 2009Companies in this issue are indexed to the first page of the article in which each is mentioned.

ABBAesica Pharmaceuticals LtdAlternatives TechnologieAmgenAnabaseApplied BiosystemsArvato Services HealthcareBayerBest ManufacturingBio-Rad LaboratoriesBiovista IncBSM ConsultingBürkertCabernet Pharmaceuticals IncCisbio BioassaysCréapharmDefiniens AGDividellaDragenopharmDuke UniversityFedExFine Organics LtdFrost & SullivanGenentechGeodis WilsonGlaxoSmithKlineGrace Davison

15, 6672

83, 859295

6, 96, 97815446

124, 125112, 11319, 151

43116

128, 12914, 69

106, 10750, 5122, 231161172

28, 14228

52, 5386

14, 57

GenostarGrindeksHamiltonHuman ProductivityIMS HealthInnovexLodestoneMelior Discovery IncMerck & CoMerck SeronoMetastormMHRAMillenniumMPI ResearchNEPICNovartisOystarPharmaflow LtdPfizerPiramal HealthcarePricewaterhouse CoopersRandoxRechon Life ScienceRescentrisRestek CorporationRocheRoche Diagnostics

2, 10558, 5916, 17148144

IFC, 138, 14049

134, 1352834

98, 99126136

130, 131, IBC72, 7564, 76

2559, 60

28, 44, 1267228

132, 13359, 63

114, 115100, 101

28118, 119

Roche NimbleGenSCA Cool Logisticssellxpert GmbHSchering-PloughSensitechShasun Pharma Solutions LtdShireSiemensSingulexSTARLIMS CorporationStratxTeraDiscThermo Fisher ScientificWatersWyeth

122, 1238, 82, 83146, 147

28787240

70, 71120, 121109, 111

274, 108, 109

32, 3890, 91, OBC

28, 102

26CUTTING RISK

ZENTIVA, the Czech drugmaker

owned by sanofi-aventis, reported

a doubling in sales in the third

quarter of 2008, compared to the

same period last year. Between

January to September, the compa-

ny recorded a two percent in-

crease in its net sales reported in

local currency. “The favourable

evolution of Zentiva’s sales in

Romania directly reflects the re-

consolidation of our local opera-

tions and the positive impact of

the changes in strategy initiated in

the last year. These changes are

aimed at refocusing our efforts

from securing market share to op-

timising working capital, improv-

ing cost efficiency and financial

profitability,” said Dragos Damian,

General Manager, Zentiva.

ROMANIAN SALES UPTHEUKGOVERNMENT’Snewhealthand

social care regulator is todraft a risk

profile for everyGPpractice so that

it can identifypoororpossibly

dangerousGPs.TheCareQuality

Commission,which tookon

regulatory responsibili-

tyon 1April, plans toevaluatepractices

usinga toolbasedonsubstandardperfor-

mance indicators.Risk scoreswouldbe

basedona rangeofdata, including total

numbersof complaints, surveysof staff and

patientsand thecommission’s inspections

ofGPpractices.


Stratx.indd 1 8/4/09 13:25:25

This should be a good time for big pharma. The purchase of pre-

scription drugs is usually non-discretionary – people need their

medicines – and in the US, backed by insurance. Many compa-

nies have large cash reserves, which should be enough to see

them through the downturn.

Some companies do seem to be doing all right. In January, Swiss drug-

maker Novartis reported a 25 percent jump in 2008 net profit and fore-

casted a record year for 2009. Novartis said its profit had reached €6.2

billion and that sales had increased nine percent last year, driven by vac-

cines, diagnostics and consumer health products, and a revival in its core

pharmaceutical business. The company also boasts the largest cash re-

serves among the big players – €11.4 billion.

US-based Merck & Co. also beat profit expectations when it announced

in February that it had earned €1.65 billion in the final quarter of 2008.

However, this was not achieved through increased sales – in fact, the rev-

enue from two of the company’s top drugs, Zetia and Vytorin, fell by 26 per-

cent after questions were raised about their effectiveness, and overall

revenue fell from €4.7 billion to €4.57 billion.

Instead, Merck shored up its profits by eliminating more than 10,000

jobs in the last three years, and it has said it will cut 7200 more by 2011.

UK-based GSK cut 850 research jobs last year as part of a restructur-

ing plan that began in 2007, and in February, the company warned that it

might be forced to cut its workforce further in an effort to reduce costs by

€2 billion a year over the next two years. At the same time, AstraZeneca said

it would cut 6000 jobs, and 20,000 jobs are also due to go in Pfizer’s merg-

er with Wyeth.

Cut your lossesMany of these job cuts involve US companies. So what’s going to hap-

pen in Europe? Will we feel similar effects of the downturn?

According to Jo Pisani, a partner in PricewaterhouseCoopers

Strategy’s pharma group, we have at least one advantage: it’s harder

to cut jobs in Europe than it is in the US. “It’s easier to lay people off in

the US because of the nature of the employment contract, and then the

next easiest would be somewhere like the UK,” Pisani says. “In coun-

tries like France, Germany and Belgium it’s more difficult, because of

stronger unions and the period of consultation involved. Unfortunately

at the moment, distressed companies will go for the countries where it’s

easy to downsize first.”

Pisani also points out that many companies are spinning off their

non-core activities. “This is part of a general shift within pharma to a busi-

ness model of focusing on core therapeutic areas. For instance, Pfizer re-

cently came up with a business unit structure where it’s got six core

business units and is actively out-licensing 100 compounds that don’t fit


COVER STORY

SINKThe global financial crisis has prompted a rash ofmergers, consolidations and layoffs in the pharmaceuticalsector. How will the European industry stay afloat inthese challenging times?

By Marie Shields

COVER STORY v2:apr09 08/04/2009 13:41 Page 28

its therapeutic area focus. Similarly, AstraZeneca early last year sold off

its cardiovascular franchise to a joint consortium of private equity and

venture capital.” As many of those non-core activities happen to be based

outside of the US, this could mean a boost for non-American specialist

companies.

Downsizing, outsourcing, restructuring: these are the kinds of things that

go on all the time in any industry, especially one facing the challenges of patent

expiries and the death knell of its main cash cow, the blockbuster. It’s hard to

tell how much of the recent activity in the pharmaceutical sector is a reaction

to the financial downturn, and how much would have happened anyway.

One thing that does seem to have been prompted by the credit crunch

is the sudden vogue for mergers. The big news in January was Pfizer’s €52

billion acquisition of Wyeth, which will give it access to its rival’s vaccines,

and consumer health and animal products. The move was widely seen as

an attempt to boost Pfizer’s pipeline in advance of Lipitor – the cholesterol

drug that made the company nearly €9 billion last year – losing patent pro-

tection in the US in 2011. In all, 38 percent of Pfizer’s current sales will face

competition from generics by 2013.

The merger will create a massive player in the industry, creating a com-

pany with more than 15 products with €750 million each in annual revenue,

allowing it to move away from its dependence on blockbusters.

In March, Merck & Co. agreed to buy Schering-Plough for €31 billion,

in order to extend its pipeline and diversify its portfolio, while Swiss-based

Roche finally took control of Genentech in a deal that valued the US

biotechnology company at €35 billion.

Both of these deals are interesting, for different reasons. The

Merck/Schering buyout will be enacted through a reverse merger, with

Schering, renamed Merck, remaining as the surviving public company.

The reason for this rather complex manoeuvre seems to be aimed at

avoiding the loss of the rights to Remicade, a lucrative rheumatoid

arthritis drug that Schering markets internationally under a joint agree-

ment with Johnson & Johnson.

Then there’s the ongoing saga of Roche/Genentech. The two com-

panies have been linked since the 1980s, when Genentech licensed one

of its first drugs to Roche. In 1990, Roche and Genentech merged, with

Roche acquiring 60 percent of its smaller rival’s shares. At the time, it

purchased an option to buy the remaining shares at a pre-set price – an

option it exercised nine years later. Roche then brought Genentech back

into the market twice in the next year, keeping a 58 percent stake in the

company.

Roche eventually agreed to pay the equivalent of €35 billion – or €72

per share – for the cancer treatment specialist, which represents a premi-

um of 26 per cent above Genentech’s closing share price at the time. The

price is well above the €67 a share that Roche initially bid.


swimor


the deal a half step forward: “Wyeth’s assets will buy Pfizer some time but

will not be enough to replenish its research pipeline or replace Lipitor.”

PwC’s Jo Pisani argues that: “It should be more about creative collab-

oration and strategic collaboration than mergers. McKinsey research has

shown that 60 percent of mergers and acquisitions don’t create value. Add

to that the period of paralysis that companies often go through while the

deal’s uncertain, a lot of those big deals won’t close for another six months.

“Against that backdrop, though, you’ve got the fact that pharma has an

awful lot of cash – there was an FT article a few months ago that said the top

companies have something like $100 billion (€76 billion) between them all.

And then you had the Pfizer/Wyeth deal in

which they put up $22 billion (€16.6 billion)

in cash, and the rest they raised through fi-

nancing. It’s a quick fix solution: if you have

the cash, you can suddenly buy a pipeline

or buy your entry into biologics.”

As Shabeer Hussain points out, “As

blockbusters fall off patent, organic growth

has witnessed major hits. Pharma compa-

nies have resorted to inorganic growth

through M&A. However, this growth cannot

form a sustainable business model for long.

This is a stop-gap arrangement, to satisfy investors.

“Though Wyeth’s Prevnar and Enbrel are expected to benefit Pfizer by

softening the loss incurred due to the Lipitor patent expiry, the deal may not

add the expected value as imagined by Pfizer. This expensive acquisition is

unlikely to bring in great dividends. In fact, expanding the business will make

it even more difficult for Pfizer to handle its enormous empire. Growing a huge

business of that size is a tall order.”

Like attracts likeSo far, much of the merger action has been confined to the US-

based pharma giants. Is this a geographical trend, or can we expect to

see more of the same on this side of the Atlantic? Jo Pisani be-

lieves it’s a question of cultural fit. “Pfizer and Wyeth have a sim-

ilar sort of culture, and that would be the same if you had

European to European consolidation. Many people are saying

that GSK must buy AstraZeneca, that it has to be the next one.

It would make sense because they are culturally similar, plus

there would be synergies in smashing together the two head of-

fices in the UK.” Pisani believes that cross-continental consoli-

dations are less likely – the Roche/Genentech deal being the

obvious exception.

Another interesting difference between US-based and

European-based pharmacetuical companies is that several of the

European companies are family-owned rather than publicly quot-

ed. German company Boehringer Ingelheim, the number 15 com-

pany in the world, is one of these. In a previous conversation with

Andreas Barner, Boehringer’s Vice Chairman, he said, “It allows

us to be more stable. We are less affected by the stock market,

very obviously, and can continue to follow our long-term vision.”

Barner isn’t exaggerating: Boehringer has invested €1.73 bil-

lion in research and development in the last year, adding 400

Old newsMergers and acquisitions in the pharmaceutical industry are not new,

and we probably haven’t seen the last of them. In the opinion of Shabeer

Hussain, Program Leader in Pharmaceuticals for Frost & Sullivan, “Plagued

with R&D challenges, patent expiries, generic competition and high drug

attrition rates, pharmaceutical companies have resorted to various crisis

management strategies to stay afloat during trying times. One of these

strategies is M&A activities. With Pfizer taking a strong and bold step in this

direction, there may be other companies to follow.”

AstraZeneca, Eli Lilly & Co., GSK, Novartis, Pfizer and sanofi-aventis all

have patents on major drugs due to ex-

pire in the next three years. Wyeth, so ea-

gerly snapped up by Pfizer, faces a tricky

situation of its own. Its two biggest selling

drugs, Effexor for depression and Protonix

for heartburn, will lose patent protection

in 2010 and 2011. In addition, generic ero-

sion is predicted to knock between two

percent and 40 percent off the revenues

of the top 10 companies between now

and 2015.

One strategy for coping with this

massive loss of income is that exemplified by the Pfizer/Wyeth deal: swal-

low up your rivals, slim them down by radically cutting staff, and take over

their pipelines in the hope that, even if they don’t produce the next block-

buster, you will at least add some diversity to your portfolio and gain

enough to prop up your bottom line in the short term.

The crucial phrase is ‘bottom line’. Such mergers are often nothing

more than a quick fix, aimed at making companies look good for share-

holders and investors. But how well does this work? When news of the

Pfizer/Wyeth merger broke, many analysts and industry leaders were skep-

tical. Michael Rainey of Accenture commented that nine out of 10 of such

big deals created no value or negative value. Bain’s Charles Farkas called


COMPANIES WITH THE BIGGEST CASH RESERVES

Novartis€11.4 billion

Roche€10 billion

Johnson & Johnson€9.7 billion

Merck & Co.€7.5 billion

GlaxoSmithKline€7 billion

Generic erosion will knockbetween 2 and 40 percent

off the revenues of the top 10 companies

between now and 2015


new employees, to bring its global headcount in R&D to 6400 people, in

a time when other companies are cutting back.

One of Boehringer’s German competitors is also majority privately

owned: 30 percent of Merck KGaA’s total capital is publicly traded, while the

Merck family owns an interest of about 70 percent. Bernhard Kirschbaum,

Executive Vice President of R&D for Merck Serono, the pharmaceutical arm

of Merck KGaA, points out that, “It means we don’t have to look every day,

every minute at the stock price; instead we can think in somewhat longer pe-

riods. The Merck family has invested a lot in this company. It’s not like with

some other families who might invest here and there and when the one busi-

ness suffers they pull their money out and put it into something else. That’s

not the case with us, which brings additional stability.”

Jo Pisani confirms this. “It does help to insulate them from the flucua-

tions in the market. Certainly you haven’t seen many of those privately held

companies become as distressed as the others. And if you look at the

strategies they’re pursuing, they have a lot more freedom.”

Of course, being family owned can go wrong as well. Witness German

billionaire Adolf Merckle, who threw himself under a train in January, after

losing billions speculating on the stock market. Merckle had taken over his

grandfather's business, creating Phoenix Pharmahandel, Germany's largest

drug wholesaler, and starting generic drug maker Ratiopharm.

One other change in the financial markets that has affected pharma-

ceutical companies is the loss of private equity investors. When credit was

really available, such investors could raise as much as €75 billion, which

meant that even the top pharmaceutical companies were within their

sights. But the current conditions have left those players unable to raise

debt, which has cut off a potential exit route or source of capital for organ-

ic growth for pharma companies.

Bad for researchWhichever way you slice it – mergers, layoffs, spinning off elements

of the business – none of these do anything to drive the engine that has

kept the industry going for decades, innovation in research. Mergers, for

example, usually result in bigger companies with more layers of manage-

ment, something that tends to stifle research, rather than encourage it.

Says Shabeer Hussain, “Innovation is not the primary focus at the mo-

ment, and these activities are just crisis management measures. Such

short-term arrangements enhance their stock prices and are purely busi-

ness-oriented, not innovation-oriented.”

According to the latest PwC report, Pharma 2020, Virtual R&D, Which

path will you take?, this ‘innovation deficit’ has enormous strategic impli-

cations for the industry as a whole: “Pharmaceutical companies need to

decide what they want to concentrate on doing and identify the

core competencies they will require, a process which may in-

volve exiting from some parts of research and development.

“But even those that regard research and development as

a core element of their business will have to make fundamen-

tal alterations in the way they work. They may, for example,

have to focus more heavily on specialty therapies, since most

of the diseases for which there are currently no effective med-

ications or cures are not amenable to mass-market treat-

ments, as well as reducing the time and costs involved in

researching and developing such medicines to ensure that so-

ciety can afford them.”

The truth is, no matter how much the public loves to hate

big pharma – much as we love to hate any powerful industry

with a major impact on our lives – the world needs the pharma-

ceutical industry. Without the innovative research and develop-

ment it funds and carries out, many serious diseases would

remain untreated.

So what’s the answer? Companies – whatever side of the

Atlantic they find themselves on – need to take a different ap-

proach. Instead of gorging themselves on their rivals, then going

on a ruthless job-cutting purge, they need to slim down from

within, stay focused on vital research, find themselves a niche.

Accept that the days of big blockbusters are over. Build a port-

folio of mid-performers – then if they lose one drug to generic

competition, it won’t smash a meteor-sized hole in their profits.

Smart companies, the lucky ones with strong enough cash

flows to ride out the recession, will target emerging markets or

focus on core competencies or rare conditions with high unmet

need. Combined with the stability afforded by private ownership,

this could mean that the European pharmaceutical sector will

emerge from the financial downturn relatively unscathed. n



With drug development times of ap-

proximately 15 years and subsequent

costs approaching $2 billion by 2010,

pharmaceutical companies are increasingly in

search of processes that can help them consis-

tently deliver a return on investment during the

patent life of a drug. Enterprise level laboratory

information management systems (LIMS) are

key contributors in this effort. Delivering ad-

vanced functionality that is specific to each

stage of the drug development process, so-

phisticated, purpose-built LIMS streamline

processes and costs and present organisa-

tions with unique integration opportunities.

These LIMS provide superior capabilities by

delivering real-time analysis and reports, fa-

cilitating regulatory compliance and product

quality, integrating with the company’s broad-

er network and providing secure access to key

data throughout the organisation.

Thermo Fisher Scientific, the world leader in

serving science, has developed a portfolio of

LIMS that meet the needs of our customers. This

is particularly true in the Life Science market

where laboratory requirements are unique in re-

search and development, discovery, and manu-

facturing. There is no single system that could

answer the unique needs of these laboratories

so our position has been to develop, with the

help of our customers, purpose-built LIMS for

each area of the pharmaceutical value chain.

Generic LIMSHistorically, industry standard LIMS have

only delivered 30-40 percent of specific func-

tionality targeted to each user’s needs, requiring

extensive customisation to make that LIMS func-

tion in that particular setting. Such customisa-

tion is commonly only possible through the use

of proprietary programming languages that are

developed and provided by the LIMS vendor.

The combination of minimal industry-specific

functionality and often out-dated and/or costly

proprietary languages has been particularly

troublesome in the pharmaceutical industry. In

addition, pharmaceutical laboratories normal-

ly create their own user documentation, de-

sign documentation, validation scripts and

help files. As a consequence, the implemen-

tation of LIMS in various laboratory settings

has been, almost without exception, a long,

costly and painful process not only during in-

stallation, but also in operating and maintain-

ing the system over the years.

The growing mandates of global regulatory

compliance and long-term data traceability, as

well as the complexity of laboratory testing and

emphasis on batch versus sample management,

have forced pharmaceutical manufacturers into

lengthy, expensive adaptations of generic LIMS

to meet their specific requirements. Extensive

and costly customisation, validation and im-

plementation periods, in many cases lasting

36 months or more, have become routine, re-

sulting in decreased productivity. However,

with the increasingly higher costs of bringing

a new drug to market, pharmaceutical manu-

facturers cannot afford delaying the imple-

mentation of next generation tools that will

make them more productive.

Generic LIMS shortcomingsAt Thermo Fisher Scientific, we believe that

the challenges facing life science companies can

be ideally addressed using purpose-built solu-

tions that provide as much application-specific

functionality as possible out-of-the-box to meet

the particular needs of various laboratories.

When the required functionality is built into the

base system as standard, it eliminates the need

for user-specific customisations during imple-

mentation. This, in turn, results in reduced vali-

dation time, shortened deployment and easier

ongoing support.

Thermo Fisher Scientific has developed

Darwin LIMS, a fully validated laboratory and

data management system that is being success-

fully implemented worldwide by many of the

largest pharmaceutical manufacturers. Darwin

Enterprise level LIMS – reapingthe benefits of integration


CASE STUDY

Thermo Fisher Scientific:13sept 8/4/09 13:59 Page 32

LIMS is a clear example of how the benefits of

purpose-built LIMS solutions can be found in

pharmaceutical manufacturing. Darwin LIMS is

specifically designed to address, out-of-the-box,

the unique needs of pharmaceutical manufac-

turing R&D and QA/QC laboratories to help

them meet US Food and Drug Administration

(FDA) regulations, achieve significant time sav-

ings in validation efforts and generate cost sav-

ings in personnel and production time.

Darwin’s unique batch and product-orient-

ed design aligns directly with the pharmaceuti-

cal manufacturing processes, allowing

production data to be logically organised, sum-

marised and reported. Darwin LIMS also in-

cludes built-in, dashboard-ready functionality to

allow pharmaceutical laboratory managers to

make faster, more informed decisions. The sys-

tem’s user-friendly, intuitive Microsoft-compati-

ble interface facilitates end-user acceptance and

support for processmodification as part of stan-

dardisation. In addition, Darwin LIMS contains

an environmental monitoring module as stan-

dard, facilitating product qualitymonitoring and

compliance. Further standard functionality in-

cludes dissolution, stability testing and product

and batchmanagement.

LIMS into the enterpriseAccording to the 2008 strategic analysis

of the US Laboratory Information

Management Systems Market by Frost &

Sullivan, market growth indicators are fo-

cused on providing customers with not only

purpose-built LIMS that are fully integrated

with other laboratory equipment, but also

LIMS that easily align with global enterprise

solutions. In addition, preconfigured solu-

tions with test methods for specified indus-

tries will drive growth across all markets.

Today, global deployments of LIMS solu-

tions have becomemore consistent and more

rapid. The implementation of purpose-built

LIMS across the enterprise allows for more

simplified system upgrades, minimised pro-

ject risks and enhanced compliance. In addi-

tion, industry-specific solutions facilitate

enterprise-wide application and training.

These multifaceted benefits help lower the

total cost of ownership of the solution, which

is critical to pharmaceutical companies that

are under ever-increasing pressures to con-

tain costs and increase efficiency. This goal

can be achieved by integrating the LIMS with

instrumentation and enterprise systems,

which can facilitate the global harmonisation

of business processes, automation of opera-

tions and consolidation of data management

in a single system allowing for near-instant

decision-making.

out the enterprise, providing both the integra-

tion of instruments and systems, and the inter-

operability necessary to transform data into

relevant business drivers.

Thermo Fisher’s 25 years of integrating lab-

oratory informaticswith the enterprise has been

built and strengthened by its ongoing partner-

ship with industry leaders such as Microsoft,

Oracle, NextDocs and Symyx, as well as with

members of our Global Partner Alliance pro-

gramme. With Connects, we bring a strategic

vision and the resources to help facilitate

management level discussion about the ne-

cessity of integrating the various sources of

data; including laboratory and related instru-

mentation, enterprise systems (like MES,

PIMS and ERP) and enterprise communication

tools (like SharePoint, BizTalk and document

management systems), thereby elevating the

role of the laboratory in the day-to-day mis-

sion critical decisions required of manage-

ment throughout the enterprise.

ConclusionAtThermoFisher,wehave anopportunity to

leverage our expertise, people and products to

help our customers now respondwithmore cer-

tainty to the many unforeseen challenges that

can oftenmake or break a company.We believe

it’s within our power and our responsibility to

lead themarket in transforming laboratory data

into the most relevant business drivers for

those companies committed to the advance-

ment and integrity of science, and to the

health and safety of the world we live in.

Enterprise-level integration is particularly rel-

evant in today’s business climate where near

instantaneous response is required by life sci-

ence companies to protect the public and the

environment. With Connects, our goal is to

help bring key business knowledge originating

in the laboratory to management at all levels

of the enterprise. The integration of the entire

enterprise will facilitate better data correlation

and collaboration, end-to-end report genera-

tion andmore secure data exchanges, with the

goal of providing management with a dash-

board view of the key business metrics essen-

tial to running the business, and enabling

management to have the critical data they

need before, not after, any point of crisis. �


For more information about Thermo Scientific informatics solutions,please visit www.thermo.com/informatics.

In response to market growth indicators,

Thermo Fisher Scientific has introduced a new

informatics initiative aimed at bridging the gap

between laboratory-generated data and the en-

terprise level information that is required for

mission criticalmanagement decisions. Because

of the breadth of our company’s product offer-

ings and our strategic partnerships, we are

uniquely positioned to offer Thermo Scientific

Connects, an enterprise-level solution set that

allows companies to more fully integrate the

work of the laboratory into the enterprise.

Connects enables our customers to extend the

business of science from the laboratory through-

Dave Champagne was named

Vice President and General

Manager of Thermo Fisher

Scientific’s Informatics business in

April 2005. Prior to joining Thermo,

he was President and CEO of

ProActivity Software, an early stage

venture that provides business

process analysis solutions. Earlier,

he was President and CEO of

UPSPRING Software, a

development tools vendor, before it

was acquired by MKS.

Thermo Fisher Scientific:13sept 8/4/09 14:00 Page 33

Much has been written about the difficult situation in which the US pharmaceu-

tical industry finds itself, with several of the bigger companies merging and cut-

ting jobs, but what’s happening here in Europe? For Merck Serono at least, the

outlook is not all bad. When asked if the financial downturn will force the com-

pany to downsize its R&D staff, Bernhard Kirschbaum, Executive Vice

President of Research and Development for Merck Serono, says, “No, I

don’t see that we will have to cut jobs. We are in a more comfortable situation than many of our

bigger competitors who face big challenges with patent expiries. We don’t have significant

patent expiries in the near future, giving us time to bring new drugs to market, and creating a

completely different dynamic than the one that exists in companies who are under pressure.

“We see a significant opportunity to build and create the right momentum and so there is no

talk of job cuts. On the contrary, we are further building our R&D capabilities, particularly in the new

core areas that we have announced.”

Staying in focusThe core areas that Kirschbaum is referring to are oncology, autoimmune and inflammatory dis-

eases and neurodegenerative diseases. “These are our focus areas,” he says.“At the same time we

want to maintain our leadership around the growth hormone and fertility business. But in terms of

research efforts, we’re doing less research for the two latter areas. Until we find cures or better pro-

tection for cancer, there will be a medical need because there are still many people dying, and many

cancers are not very treatable and we are far away from cures.”


The global pharmaceutical industry is facing sometough challenges at the moment: patent expiries, alack of new blockbusters, and now the ongoingcrisis in the financial markets. But Merck Serono’sBernhard Kirschbaum isn’t too worried, as he tellsNGP’s Marie Shields.

THE BIG INTERVIEW

waveRidingthe

Kirschbaum ED:13sept 8/4/09 13:51 Page 34


steadwe can think in somewhat longer periods. I did live through this dur-

ing my time at Aventis, when you always had to look at the stock market

and to sometimes make short-term decisions that were not absolutely in

line with regard to long-term requirements.

“This does not mean we are not ambitious, and it doesn’t mean we

don’t have a lot of pressure and want to bring things forward and not lose

any time. But in our setting, there is no need to do something that helps in

the short term but which in the long termwould be amistake.

“TheMerck family has invested a lot in this company, not just money.

It’s not like with some other families whomight invest here and there and

when theonebusinesssuffers theypull theirmoneyoutandput it intosome-

thing else. That’s not the case with us, which brings additional stability.We

alsohaveboth thechemicalsand thepharmaceuticals

business sectors and this helps us to balance things

out.Thereare timeswhenthepharmabusinessprofits

fromthechemistrybusinessand thereare times, such

as right now, where the chem-

istry business profits from the

pharmabusiness.”

Another benefit that

Kirschbaum finds in working

at Merck Serono is the oppor-

tunity to work in networks rather than silos. This is

part of the reason he chose the company as the

next step in his career. “I chose an organisation

with an open and active mindset, which you par-

ticularly need in the early phase of drug develop-

ment, because you can’t do it all on your own. The

world has changed so dramatically that you could

be as big as you wish as a company, and you will

still need help. You still need the networks and the

access to experts externally.”

Kirschbaum has worked in New York, Paris and

Germany. He believes it’s important, both for him

personally and also as a leader in a global company,

to be exposed to different cultures andnationalities.

“I’ve always enjoyed that interaction,” he says. “I

found each of those places extremely enjoyable,

whether it was the LakeConstance regionwithmany

“We have a strong commitment to and a very nice portfolio in oncol-

ogy, where we are approaching the indications from different angles, at-

tacking tumor cells themselves, the tumor environment and the immune

system.

“Then we have neurodegenerative diseases like Parkinson’s and

Alzheimer’s,where there’s currently only symptomatic treatment. These are

devastating diseases and an increasing burden for an aging population.

The whole industry, including ourselves, is looking for disease-modifying

agents that are able to at least postpone the onset or the progression of

these diseases. That would have a huge impact on the individual patient

andalsoon society, if you think about the explosionof the cost and thebur-

den associated with the aging population.

“Andof courseoneof our big areas ismultiple sclerosis,wheredespite

the fact that there are great drugs, there’s still a need for higher efficacy and

for more convenience, which would then allow better compliance, more

continuity, less frequent injections and less painful or oral alternatives that

are efficacious and safe.With cladribine tablets and their favourable results

from thephase III CLARITY study,wehave theopportunity to serve patients

with a new oral alternative.”

Kirschbaum points out that with rheumatology and autoimmune dis-

eases in general, and even in rheumatoid arthritis, there are still re-

searchers looking desperately for effective, new, safe alternatives. He says

it’s a tough task tobecome curative, and this is evenmore true for other au-

toimmune diseases such as inflammatory bowel disease.

MerckSeronohas a very exciting compound in the context of rheumatol-

ogy: “We are engaged in osteoarthritis and we think with one of our com-

pounds, FGF18, we indeed have a compound that may become the first

disease-modifyingagent.Hereagainwehaveadisease that affects regenera-

tionof the jointsandhitsmanypeople,10timesmorethanRAintermsofpreva-

lence.Youhavethesurgery, thekneeandhipreplacementandotherwiseyou’d

givepainkillersbut that’s oftenmore counterproductive thanbeneficial.

“It’s ambitious because many companies have tried. We have a very

attractive mechanism with the fibroblast growth factor 18 that targets the

articular cartilage and stimulates it to grow. It would be wonderful for the

patients to find something that would be disease-modifying.”

Family valuesThe ability to continue with these important areas of research de-

pends to some extent on a stable working environment. One factor that

helps Merck Serono provide this stability is the fact that it is a family-

owned company.

“This gives us a lot of confidence for the future,” says Kirschbaum. “It

meanswe don’t have to look every day, everyminute at the stock price; in-


Bernhard Kirschbaum is Executive Vice President of

Research and Development for Merck Serono, and a

member of its Executive Management Board. Kirschbaum

joined Merck KGaA in 2005 and was previously Vice

President in Pre-clinical R&D and Head of Global

Technologies. Prior to joining Merck, Kirschbaum was Vice

President Discovery Research for sanofi-aventis. He has also

worked for Aventis and Hoechst Marion Roussel in various

senior positions, and headed the Centre of Applied

Genomics in Martinsried.

“The combination of what the consumers want,what the health agencies want and the discussionaround pricing will lead to more stratifiedapproaches to medicine”


opportunities for outdoor activities, or somewhere like New York, where

you can combine a tough academic environment and a high workload with

the best quality entertainment options. And then there was Paris, which

was perfect both with regard to my work at the Pasteur Institute and my pri-

vate life, with a home in the Quartier Latin.

“The toughest part of all those changes was the step into industry, be-

cause for industry I exchanged the espresso at noon in a nice Parisian café

with the canteen next to the chemical plant. But what I learned in all these

different situations was that I had to approach each with the attitude that,

independently of how it turned it, it would be an important experience for

me that I would profit from in one way or another. This attitude has made

me quite relaxed in approaching challenges.”

In terms of the differences between the academic world and the world

of big pharma, Kirschbaum says that as a young scientist, it’s extremely re-

warding if you are associated with a compound that makes it through de-

velopment. “There was one compound that I accompanied to the market

at the beginning of my career and that was just a great experience and a

huge learning curve. This was one of the reasons why I have stayed in the

industry, because the experience is so manifold and so broad.”

Changing timesRheumatic and autoimmune disease research has been through

many changes since Kirschbaum started working in the area in the mid-

1990s. “Then, methotrexate was the generic standard therapy. There

were some other drugs that showed efficacy – they had serious side ef-

fects, but they were cheap, and you needed to beat this type of efficacy.

During this period several oral compounds were profiled at the same

time as injectibles such as the anti-TNF treatments, which completely

changed the environment.

“The development during the past decade has been dramatic. It was

interesting to see such a field where people were on the one hand anxious

to treat the pain and on the other hand there were cheap generic com-


ThermoFisher.indd 1 8/4/09 13:26:04

pounds available and you had to decide if it was worth the effort of em-

barking on further work. There were already treatment options but there

was – and still is –medical need in this area. For example, there are people

who are not able to stay on a certain therapy because at some point they

can’t simply stand it any longer, and they need other options.”

MerckSerono’s current pipeline includes Erbitux, which according to

Kirschbaum is becoming an important standard in oncology. “It’s cer-

tainly an important pillar for us to build our oncology portfolio around.

We are continuing to look into alternative indications where Erbitux may

be beneficial.”

“In oncology, it’s very important to have combinations of drugs that

work together to bring an improvement. This was a significant break-

through in colorectal cancer. If this cancer gets reduced to a levelwhere the

metastasis canbe completely resected, this provides the chance for a cure.

The combination of Erbitux treatmentwith subsequent surgery canbeben-

eficial. If you have a patient forwhomsurgery is not an option because it is

not resectable and you can bring it down to a level where it becomes re-

sectable, then this is a significant additional benefit.”

In addition to Erbitux,MerckSeronohas several promising compounds

in later stage development for various cancers. These include cilengitide, a

peptide-like integrin inhibitor which acts as an antiangiogenic agent, and

Stimuvax, for non-small cell lung cancer, which Kirschbaum says could be

extremely exciting in the development of a vaccine for cancer. “It would be

the first successful vaccine for cancer. Of course the verdict is still out as to

whether it will work in a larger patient population,” Kirschbaum explains.

“That’s to be tested now in phase III.”

Biomarkers remain an important element in the company’s cancer re-

search. “Eachofour trials hasanassociationwithabiomarker,”Kirschbaum

explains. “Withmanyof our products, we either associate themwith certain

markers or we associate themwith single nucleotide polymorphisms. As a

midsizedcompany,weare inabetterposition to tackle this than thebigphar-

ma companies, whomayworry about losingmarket share.

“The combination of what the consumers want, what the health agen-

cies want and the discussion around pricing will inevitably lead us tomore

stratified approaches to medicine. Those companies who embark on this

earlyonwill havesetastandardandalsowill have thechance tocreatemore

credibility in the community because you can say, ‘I won’t give it to people

who have no chance to benefit from it, but I can stratify the population.’ Of

course we can never be 100 percent sure, but we can stratify it in a way that

thosepeoplewhotake thecompoundhaveabetter chanceofbenefiting.This

is a very ethical thing to do,whichwehave an obligation to engage in.

“We also have compounds for various autoimmune diseases in the

pipeline. A compoundcalledatacicept is being investigated in several differ-

ent areas such as RA, lupus andMS. This is a compound that neutralises B-

cell growth factors and therefore controls B-cell response. There is FGF18 for

osteoarthritis,which is inearly clinical development.Westill havea longway

togobutweare reallyexcitedabout this compound. It couldevenhavecom-

pany-transforming potential if it is successful.

“In addition to such diseases, we are tackling rare diseases such as in-

heritedphenylketonuria.Our compoundKuvan,whichprovides thefirst ther-

apy for this raredisease, has recentlybeenapproved in theEuropeanUnion.

It may not be the ultimate blockbuster, but if you have the chance to bring

this type of treatment to the patient, you should do it.”

Ramping upMerck Serono recently announced a $50million expansion of its fa-

cility in Billerica, near Boston, Massachusetts. As a primarily European-

based company, Merck Serono is looking to build up significant presence

in the US.

“Historically we had two sites in the US – one from Merck and one

from Serono – and we said that we need to bring those people together

and we are willing to invest in a nice campus there. We brought the dis-

covery research campus together with our technical operations facilities

at a site where there is the potential for further expansion eventually if

we decide to invest more.

“We want to create these hubs, not only to ensure a fully integrated

group of people that covers the value chain, but also in terms of having

good local interactions with excellent partners in academia and biotech.

Boston is a very good place to do this.We have a significant group there

that works on oncology, and again it’s important that they are embed-

ded in the local networks. And we have our endocrinology, our growth

hormone and our fertility approaches located there.

“There’sa lot of excitement over in Boston.We have just been ranked

in the top 10 of biotech employers by Sciencemagazine, and we have an

all-time low attrition rate in research in the Boston area. It has always

been double digit before and now we are well in the single digits, and

that’s a great achievement, especially if you remember that we just

formed Merck Serono two years ago. There’s a remarkable stability and

loyalty there, which you usually don’t see in these US regions with heavy

pharma presence.”

The emphasis on networks rather than silos also helps to create an

R&D continuum. Kirschbaum says that whenever you make a surgical cut

between research and development, you end up with silos where people

don’t interact very effectively. “We have created a structure where people

are interactingmuchmore. They are encouragedboth by the structure and

bymanagement to interact, andweare seeinggoodprogress in this. As one

of themost recent activities in this area, we havemerged the research and

development departments into one function, headed by myself. It is a big

advantage to have everybody around one table.

“Weare also developing relationshipswith university clinics andother

external partners that could be involved in early clinical development. We

have interestingmodels inBoston, theRhine-Main-Neckar area inGermany

and also inGeneva – for example,with theUniversity of Lausanne. It’s time

to try newmodels, and thedifferent partners involved aremuchmore open

to this. The stratifiedmedicine approach also calls for these types of inter-

actions. Youneed tobuild these things very early in your approach, because

otherwise you lose a lot of timeand risk not bringing your compound to the

patient.”

In the end it comes down to commitment and a willingness to excel

during times of change, both of which Kirschbaum and his company seem

to have in spades. “There is a very strong commitment to innovation. We

are currently spending €1 billion on R&D every year, which ismore than 20percent ofMerck Serono’s total revenues. This also shows if you look at the

recent investmentswehavemade in new technologies that couldbringnew

drug-likemolecules to themarket.”

It certainly sounds as if Merck Serono is well placed to ride out the fi-

nancial downturn, and emerge successful on the other side. �



With the state of the pharmaceutical industry beginning to

reflect that of thefinancialmarkets,weare starting to see

big drug companies buying out those unable tomaintain

a respectable share price. In a multi-billion dollar indus-

try, differentiation from competitors is key to keeping

one’s head above water, and Shire’s entire corporate structure is based

upon this principle.

In a bid to stay competitive in the trend of large pharma company buy-

outs, Shire has adopted a strategy that sets it apart. “We’re a highly spe-

cialised business in that we focus on diseases that are very rare and have

a very high unmet meet,” explains Sylvie Grégoire, President of Human

Genetic Therapies. “Our populations qualify as orphan,which confers a cer-

tain protection in termsof intellectual property from thegovernments in the

US, Japan and Europe.

“Ourportfolioofproducts intheHumanGeneticTherapiesbusinessfocus-

eson thevery rareendof theorphandiseases: the target populationswe treat

arebetween2000and3000.Whatthatmeansisthatthedevelopmentprograms

inordertobeabletobringproductstothemarkethavetobeglobal innaturebe-

causewhen I say2000, Imean2000patientsworldwide,”explainsGrégoire.

By focusingonanicheareaofpatient care,Shiremust search theworld to

findpatientstocompleteitsclinicalstudies,andasaresultmustoperateinover

43countriestocreateaviablebusinessmodel.Commercialisationofproduct is

very important to completing themodel; the success of sucha strategy canbe

seen in two of the company’s currently marketed products, Elaprase and

Replagal,whichareusedinover43countriesasenzymereplacementtherapies.

This business strategy has not necessarily been a safe one, but the

choice to develop and bring products to themarket in such a way has ulti-

mately generated sufficient profits, despite the higher price of such prod-

ucts and the rarity of patients available for treatment. “Governments and


FROM THE CROWD

FEATURE

Mike Cola and Sylvie Grégoire of Shire Pharmaceuticals explain whybeing different is increasingly important in the dark days of economicrecession. By Natalie Brandweiner

OUTSTANDING

“This year we anticipate doing a littleover €1.5 billion in revenue out of ourSpecialty Pharma business” Mike Cola

Cola Gre?goire:13sept 8/4/09 13:42 Page 40

the populations we serve are willing to pay for such products because the

impact they have on patients’ lives is significant,” says Grégoire. “If they

don’t have replacement therapies or the drugs thatwedevelop, their qual-

ity of life results in very highmorbidity as well as often early mortality.”

New productsShire’s aim is to introduceeight newproducts to such rare diseasepop-

ulations by 2015, which it hopes will bring in €1.1 billion in revenue. Thecompany’s expansion is due to the strategic reinvestment of this revenue

into new drug development. As a big fish in a rela-

tively small pond, Grégoire believes focusing on a

nichemarket will benefit the company, in compar-

ison to the approach of larger, more generic, phar-

ma companies.

“Those life-changing products are the rev-

enue generators, but they also provide hope for

those with rare and dire diseases, and that really

motivates our team, who come to work every day

with thehopeof helping and transforming families’

lives as well as the patients’ lives.”

However, producing drugswith suchhigh-pro-

file capabilities brings with it both challenges and

responsibilities. “It’s a highly specialised area, but

within our humangenetic therapies businesswe’ve

developed the internal capabilities to counter this.

You can leverage those capabilities in terms of

both the clinical development of the products and

the commercial infrastructure you have. Once

you’ve done it with success with one product, you

can leverage the know-how aswell as the capabil-

ities to add products to that particular model, as

opposed to being inmultiple therapeutic areas.

“It doesn’t matter whether the specific thera-

peutic areas are cardiovascular or GI. Generally,

these patients with rare genetic diseases have

multi-organ systemproblems, so it’s a generalway

of developing multi-organ disease expertise, and

we can leverage that know-how internally. Clearly,

a very good understanding of the regulatory ap-

proval process, as well of as pricing and reim-

bursement, in all of these countries is key,”

explains Grégoire.

Wider rangeProduct focus is obviously an essential com-

ponent of Shire’s success. As Mike Cola, President of Specialty

Pharmaceuticals explains, the company’s Specialty Pharmaceuticals busi-

ness model is far more wide ranging, with a vast array of drug programs.

“We have everything from an orphan drug in Xagrid in Europe all the way

to something that’s more of amassmarketed product in the US for ADHD,

Vyvanse, and in the past, Adderall XR.

“Wehave three business units now in our Specialty Pharmabusiness,

ADHD, GI and EPU, our emerging products business unit.Within each one

of those business unitswehave sales forces fairlywell aligned. These units

try to run as semi-autonomous companies within a company focused very

much on the needs of the specialist physician, which is very similar to the

model in our Human Genetic Therapies business that Sylvie oversees.

Within the ADHD area, our lead product is Vyvanse, which we launched

about 18months ago and it is growing nicely.We think it will be themarket

leader over time.”

EPU is the side of the business that allows the company to become

more commercial. “We haven’t talked a lot it, but we have a number of

Carrierwave initiatives underway. Carrierwave is

a technology that was acquired in our 2007 ac-

quisition of NewRiver Pharmaceuticals. It came

along with Vyvanse and we’re discovering ways

to apply that technology.We hope to be able to

sharemore about it by themiddle of 2009.

“Overall the consistency between the two

businesses is there. We leverage the same

model and the sameprinciples, they’re just a lit-

tle bit different as far as size and scale. This year

we anticipate doing a little over €1.5 billion inrevenue out of our Specialty Pharma business

andwe’ll drop somewhere in the neighborhood

of €75million to our overall bottom line. So our

Specialty Pharma unit is a growing business,”

says Cola.”

SurvivalAs a specialised pharma company with a

much smaller sales force and very fewpatented

products, it’s certainly going to be easier for

Shire than for the larger andmore generic phar-

ma companies to survive the current challenges,

given the financial markets.

“Beyond Adderall XR, we do not have a lot

of patent exposure. If you look at the IP of our

current products it goes out very far into the

2023-2024 range,” explains Cola.

“If you look at all our diseases they’re high-

ly symptomatic. We create tremendous value

for the patient. If these patients don’t have

their medication they will feel the difference

quickly, as opposed to an asymptomatic drug

lowering your cholesterol or even your blood

pressure, where youmay not notice it for a long

period of time.

“That differentiating factor – focusing on symptomatic conditions –

helps us.Weprovide a lot of value for a smaller patient population and that

value we don’t think will be taken away from these folks through reduced

access to healthcare.”

Despite the upcoming loss of patent protection on Adderall, Shire has

a portfolio of productswide and big enough for it to cover the gap. Cola re-

lates the company’s growth story, and explains that with six new product

launches in the last three years, that will continue to drive the company’s


Mike Cola is President ofSpecialty Pharmaceuticals

Sylvie Grégoire is President ofHuman Genetic Therapies


“Out of that 3500 people we’ve

hired at Shire, we’ve hired close to 2500

of them in the last three andahalf years;

so I’ve seen tremendous changes.We’re

trying to consolidate all of those recent

hires and make things more efficient. If

you think of the state of the company

whenMatt Emmens took over as CEO in

2003, it reallywasnot inagoodplaceand

each year we’ve added a fair amount of

newproductsandnewstructure,building

newopportunities for Shire,” saysCola.

Grégoireexplains thecompany’sap-

proach for the future, highlighting re-

cruitment of people to Shire’s already

expanding operations to be central to

strategy. “In our Human Genetic

Therapies business, we’ve added 300

people in 2007 and 2008 to our team,

and in 2009we have plans to addmore

than 275 people.

“We plan on hiring to support our

growingbusiness, specifically,we’re launchingamedicine in Europe, Firazyr

and we are now hiring people to work on that project. We’re projecting to

hire in 2009 in a prudent way, based on the fact that we have the uncer-

tainties that come with XR. It’s completely justified by the growth of the

business and achieving the goals of the business,” she explains.

StrategyGrégoire’s experience in both the traditional and the entrepreneurial

aspects of the pharmaceutical industry have contributed to her tenure at

Shire andher influenceon the company’s strategy. As she explains, “These

kindsof experiences in termsof business, thinking about how to runa com-

pany in a nimble and entrepreneurial fashion and a global view is

very important, and is something that helps me in mapping out

the potential for our HGT business to grow.

“In just that year and a quarter that I’ve been here we’ve

added a significant amount of projects to the pipeline through

business development and our HGT business has a research

component. So we look at what’s in our research portfolio and

we’re always working on different potential new drugs that will

enter the pipeline internally, and externally. The economic dif-

ficulties that small companies are facing today in terms of rais-

ing capital whether they’re private or public provide an opportunity for

Shire to aggressively consider acquisitions of products that fit our strat-

egy, making sure that we focus on that specialist strategy. We have a

courageous way of approaching business opportunities that come from

the external world and want to manage the company in a non-big phar-

ma way.”

That non-big pharma way certainly seems to be an approach that has

boosted the company’s revenue andallowed it to further its development of

new compounds. However, with the credit crunch expecting to last at least

well into 2010, only timewill tell if such a strategywill pay off. �

success. “We knowwe need towork through the end of the life for Adderall

XR.We understand the dynamic of losing the exclusivity in April, but in fact

wehaveacitizens’petition inplace.Wedon’t knowthe impactof thecitizens’

petition. Theremay not bemulti-source generics but we’re not counting on

that happening, so it’s really agrowthstorywith thenewproducts,” hesays.

Grégoire attributes a large portion of the company’s growth to its re-

cently launchedproducts. “They still have a lot of growth in them,whether

it’s from our Specialty Pharma business or our Human Genetic Therapies

business. From the growth perspective of our currently marketed medi-

cines, and then the pipeline products that we have, we feel it’s a nice story

for the overall growth beyond the Adderall XR story, which had been a sig-

nificant part of Shire’s history. In our Human Genetic Therapies business,

we’ve added 300 people in 2007 and 2008 to our team, and in 2009 we

have plans to addmore than 275 people.”

New jobsShire’s development as a company is largely due to the substantial

growth it has undergone in the last two to three years. It currently employs

about 3500 people globally, with a sales force of approximately 1400 to

1500 people; without having thousands of salespeople relying on what’s

going to be next in the pipeline, themodel becomesmuchmore efficient.


“We have a courageous way ofapproaching business opportunities andwant to manage the company in a non-bigpharma way” Sylvie Grégoire

Shire Human Genetic Therapies, Cambridge, Massachusetts, US


Hamilton.indd 1 8/4/09 13:17:17


people who are passionate about moving the process along and de-

veloping it continuously, you will not be leading edge.”

Once you have the right people in place, the next issue to be

tackled is the constraints of legacy equipment. Sandell says this can

be overcome by building in fl exibility from the very beginning, “When

we’re building a new facility, it’s very much about building in fl exibility

in line with our knowledge. Of course there will still be constraints, but

it’s mostly about getting to a point in the construction of a facility where

you are very aware about your bottlenecks and your constraints so that

you have made conscious decisions as to what you end up with.

“When you have constructed the facility, you will then know the

ways out of potential future problems. You have to do a really big,

good planning exercise before you start building so that you know if

you build it like this, you will have a bottleneck in say, step one. Or

if you do it like this, you can remove the bottleneck in step one, but

then step four becomes the bottleneck. You have to think forward and

see where this facility could go in the future. If you have a conscious-

For Kim Sandell, building the ultimate pharmaceutical

manufacturing facility is not about bricks and mortar or

machinery – it’s about people. Sandell, who is Pfi zer’s Di-

rector of Manufacturing, knows what he’s talking about.

He is currently project director for a new biotech plant

under construction in Strängnäs, Sweden. He believes

that of manufacturing’s four elements – equipment, product material,

processes and people – people are the most important.

“If you have a newly constructed facility or an old facility, you’re

more or less stuck with the equipment. It sits there. So you need to

work around with processes, or you need to fi nd clever ways of utilis-

ing people better, such as other ways of working shifts, for example.

It’s also about empowering people to feel that, ‘I can do my job and

take decisions within my responsibility.’

“The people element of it, that’s the most important thing; that’s

where you can make a difference. Everyone can buy the right equip-

ment, everyone can get a fairly good process, but if you don’t have

CUT DOWN, COLLABORATE AND FOCUS ON THE CUSTOMERPfi zer’s Kim Sandell lets NGP in on his vision for the manufacturing facility of the future.

MANUFACTURING

SENDALL ED P44,45 47,48.indd 44 8/4/09 13:47:42

ness about that, it’s much easier to work around. Otherwise, if you

build something for a certain purpose described in the business

case at that point, you can be sure that it will change in fi ve years,

and then you don’t have the fl exibility.”

Manufacturing is an integral part of the pharmaceutical proc-

ess, but it is often not considered thoroughly enough in the design

process. Sandell says this will change, with the facilities of the

future being designed to be multipurpose. “You have to have

someone with a good imagination and good knowledge about

what might come, and you have to make some educated guesses,

so that you don’t focus solely on that one product. Building a dedi-

cated facility is a terrible waste of capital. You need to look at a

broader perspective, but you still have to go back to the process

that you’re aiming at to start with to make sure that that you can

reach the quality attributes you need.

“One of the most crucial elements is having customer input from

the beginning. You need to think about things like user demands

and fl exibility when the design is still only on paper. If you do it later,

you will already have built in restrictions that might be less desirable.

It’s about getting a customer focus: you need to have the customer on

board in the product early so that you can make the right decisions.

“Otherwise, you might miss the long-term goal; you might not give

enough consideration to lifecycle costs, for example. It might be wise

to spend €10 million on something rather than €1 million, because if

you choose the €1 million engineering solution, it might not help in the

long run, because you might need to spend €20 million on people in

the following 10 years because you need a complicated workaround.”

Breaking down silosSandell says that part of the innovation process for the future of

manufacturing will involve encouraging people to think in a broader

context. “It’s very much about getting a mixture of people and trying

not to look at the departmental things. It’s about saying, ‘I’m work-

Kim Sandell is Director of

Manufacturing at Pfi zer. He is

responsible for the end-user

representation and start-up

activities for the new biotech

plant being constructed in

Strängnäs, Sweden.

“When it comes to Lean manufacturing, the pharmaceutical industry is way behind, maybe 15 or 20 years”


SENDALL ED P44,45 47,48.indd 45 8/4/09 13:47:53

BestManufacturing.indd 1 8/4/09 13:10:51


There are those who say that the pharmaceutical industry should

not only break down silos within its own walls, but that it also needs to

reach out and learn from other industries when it comes to introducing

more future-oriented manufacturing processes. In much the same way

that Novartis has said it wants to become the Toyota of the pharma-

ceutical industry, Sandell says that his company can learn from other

manufacturers on its home turf.

“I think that’s the same thing for us. We are fortunate being in

Strängnäs in Sweden; we are close to Södertälje where we have

Scania, the big truck manufacturer, and they are really advanced in

Lean manufacturing. The

pharmaceutical industry is

way behind on this, way,

way behind, maybe 15 or 20

years. We definitely have to

step up our performance.

“We can make a quick

comparison on the existing

processes we have today

and the existing facility and compare that to the new facility that we’re

building up now. We will produce the same products, but we have a new

generation of process. Today we need to handle about nine batches to

get to one final batch of a certain size. In the facility of the future, we will

be able to handle one batch all the way through with a three times higher

yield. So we are replacing 27 batches with one batch.

“Those are the things you have to do to move forward. You

can’t just have a lab model that you scale up 1000 times; you need

ing for the capital product, so I’m focusing on my parts in the capital

things. I look at equipment.’

“But you also have to have someone coming from the process side

talking to these people and saying, ‘Yes, but if you do it like this, it will

be much more beneficial from a process point of view.’ It’s all about

mixing a team, and as a manager being proactive in that and bringing

in a cross-functional team. Somehow you have to, as a manager, force

people together, because it’s very easy to sit in your silo and say, ‘I’ll

do my work and he’ll do his.’ And that’s not the way of the future.”

One concept in streamlining which many other industries have

introduced, is continuous manufacturing, but Sandell points out that

this method is not particularly suitable for the pharmaceutical indus-

try, which tends to stick to the batch process. “We are working with

E. coli fermentation, for example. E. coli is a really rapid organism to

work with: it grows for 48 hours, and after that it has generated so

much cell mass, you can’t handle it within the equipment. You have to

have a batch break. I think we’ll still stay with batches for a long, long

time. You do need to have a process where the batch flows smoothly

through the system so that you don’t have to wait to empty the whole

facility, but until batch one is done, you can’t start batch two. It will

never be a fully continuous process.

“The other big drawback of having a continuous process when

you’re working with fermentation and high potential drugs, is that

you have such enormous value in the facility, it’s nice to have isolated

batches if something goes wrong. It could be very expensive if you have

continuous operations and it takes 10 days to shut the facility down.

That might mean you have lost several million euros worth of product.”

“Building a dedicated facility is a terrible waste of capital”

SENDALL ED P44,45 47,48.indd 47 8/4/09 13:47:59

48 www.ngpharma.eu.comwww.ngpharma.eu.com

Given this, what other metrics can we then use to measure op-

erational excellence, because everyone says cost is the driver, be-

cause it gets the executive buy-in. How can we ensure operational

excellence moves in the way of empowering the people to do well

without threatening their livelihood?

Sandell says it’s about showing what you can do with the facil-

ity and the equipment you have. “Say that you can be so effi cient

so that you can free up 70 percent of the capacity. Then it’s about,

for management, fi lling that capacity; it’s not about trying to shut it

down or laying off people. We need to fi nd something to fi ll it with,

and if we don’t have products in our own pipeline, we can try some-

thing else, such as going out to do contract manufacturing.

“We can show that we will free up this capacity, but that it

should be used for something else. Otherwise, you won’t get those

great benefi ts that you might think, because you’re still saving

money, but you might spend things in capital to make these im-

provements, and you’re still stuck with the same volumes. All that

goes back to the same volumes, and you don’t get the big leverage

on the improvements that you would get if you could still utilise all

the capacity you have.”

In the end, Sandell is looking to make Pfi zer a leaner, more fl exible

manufacturing entity. “We would like to fi ll up what we have in spare

in terms of other products, and if it’s not

a Pfi zer product, it will be great if we

could fi nd a third party, and we’re work-

ing on those strategies. It’s not all about

saving, saving, saving, cutting away and

cutting away. Freeing up capacity is more

the thing; fi lling that up.”

And ultimately, Sandell says, the

big drug companies can use this to take

back ground in the battle against the

generics. “You can take the electronics

industry as an example,” he explains.

“There are a lot of joint ventures around

facilities where they are producing the

same kind of microchips, but it might be Phillips or Sony or someone

else using the same facility; the only thing you are changing is the

layout of the plasma screen.

“In the same way, why not have a growth hormone production

site where you have a joint venture of fi ve big companies making

growth hormone. Why should they all have separate facilities? If

you consolidate that into one facility, you get much better gain out

of that facility and you might utilise the capacity up to 90 percent

instead of having fi ve facilities that might be used to 50 percent.

“We need to go to more alliances like that to, into the future and

think in a much less conventional way. If you look at all other in-

dustries, this is not something new. But in pharmaceuticals we have

been too protective.”

Once it opens up to these new ideas, pharmaceutical manu-

facturing will never be the same again. It may even prove to be the

secret weapon that helps big pharma stave off generic competition

and come through the recession more or less intact.

to look at around step one – what effect does that have? – to step

two, and try to get into a free-floating thing so that you can have a

batch flowing through.

“Today we have to have a lot of intermediate steps, and that

wastes a lot of time, because you need to collect a product, and then

start the next step. But in the new facility, we can start from point A

and run all the way to point Z without having any stops. We’ve been

more moving toward that and looking at less intermediate steps and

trying to gain yields as well – and of course, looking at waste time.

“We will reduce the lead time on these processes with about 75

percent moving from the old facility to the new facility, just because

it’s a more streamlined process and we can streamline work around it

as well. Just imagine handling 27 batches at the compared to one; it’s

a huge impact.”

Reining in spendingSandell believes there is no need for enormous capital expend-

iture in creating and building these new labs. “That’s the beauty of

it: the new processes don’t have a new specification. They use the

old specification, so we can use all the old methods. The analytical

labs stays intact. You use the old labs for doing the new processes,

so what you are doing is freeing up a lot of time in those labs for

doing more production or using per-

sonnel, wherever the needs are. The

best thing would be if you could have

more product coming in and you can

do even more with the same amount of

people. Otherwise, you would have to

take away people if the volume stays

the same.

“The dilemma you end up with

when you are working with operational

excellence is you have to be very care-

ful that you don’t start to use it solely

as a savings exercise, because that

takes away all the engagement from

people. They will start thinking, ‘If I do good work here, that might

mean that I don’t have a job on Monday.’ It’s very important that

operational excellence is about freeing up capacity and then trying

to fill that capacity.

“It’s not about freeing up people and taking them away and

minimising the organisation. I guess that’s why companies like

Toyota and Scania have been really good at this, because they have

been working from one capacity base, and they needed to increase

capacity. It has not been about being more effi cient in that way, but

they gain all the effi ciency anyhow. It’s all about doing more with

what you have.

“I’m a bit worried about the turmoil in the pharmaceutical industry

now, because it’s more about doing – or saving money. Even at Pfi zer

this operational excellence initiative that we’re running now more or

less started as a saving exercise. That doesn’t empower people, and

that doesn’t engage people because in the course of the work, you

might lose your job when you are making improvements.”

“When you’re working with high potential drugs, it could be very expensive if something goes wrong and it takes 10 days to shut the facility down”

SENDALL ED P44,45 47,48.indd 48 8/4/09 13:48:02

Lodestone.indd 1 8/4/09 13:19:20

times on the machines have to be extremely

short. For a complete changeover from our

machinery, for instancing changing of pack-

aging five vials to 10 syringes in combination

takes about 30-45 minutes.

We have seen a clear trend that time to

market is an issue. They build less and less

stock, which is also capital, and they want to

make sure they can package on their machine

whatever they want, whenever they want, and

changeover and flexibility of the machine is of

the essence. Today you buy a syringe machine

to package syringes, and in two years maybe

you will have to package injector pens, so you

want to make sure the equipment you spend

millions on can be retrofitted, and that is its

changeover flexibility, that’s the key in the

pharmaceutical market today.

NGP.What role does product packaging play in

ensuring medicines are safe from counterfeit

and tampering?

MZ.Obviously, product packaging plays amajor

role besides tight control of the distribution

channels. The features used on pharmaceutical

secondary packaging are many. Dividella can

offer features, such as hotmelt tamper evidence

closure on the TopLoad carton and cardboard

tamper evidence features on every single prod-

uct inside a TopLoad carton. (For instance every

single syringe in a multi-syringe presentation is

protected individually.)

Other features include the print and/or la-

belling features on theouter side of theTopLoad

carton that are necessary for a real track and

trace (this can be datamatrix codes, serial num-

NGP. How can the supply chain be operated

to help in the fight about counterfeit medi-

cines?

Manfred Zurkirch. There are different philoso-

phies. One of them is making sure that the final

patient, the customer, doesn’t get a counterfeit

medicine; that’s the easier way. The more com-

plicated one, the full-blown track and trace,

makes sure not only that it doesn’t happen, but

if it does, it also finds out exactly which type of

supply chain it has been done in and by whom.

This is tricky, and the pharmaceutical company

has to make sure that it has clear control over

the distribution channels down to the doctor or

the final patient bywhatevermeans. This canbe

ready in the future via RFID.

I’m skeptical that you canhave full technical

control until the end. Youhave to know theways

your products go and have a trust relationship

with someof the doctors; otherwise, you can al-

ways cheat.

NGP. How can time to market be achieved with

the shortest possible changeover time?

MZ. That’s one of the strengths of our compa-

ny, and we have seen, especially in the last

few years, that product batches are getting

smaller and smaller. This means that since

products are becoming more expensive,

they’re more specialised. Pharmaceutical

companies want to produce packages on the

same machine, and so they change over sev-

eral times a day to make sure that they do so

just in time. They get an order for a batch of

50 packs, and then they package those, and

then the next ones, and so the changeover

bers, RFID tags etc.) and special marks on the

cardboard that enable the final customer to ver-

ify where the carton originates from. Normally,

these features aredefined togetherwith the cus-

tomer during the packaging development

process even before discussion about the ma-

chine itself starts. �

Product package efficiency


By Manfred Zurkirch

EXECUTIVE INTERVIEW

Manfred Zurkirch is ManagingDirector of Dividella AG, whichhe joined in 2006 from a leadingSwiss technology group, wherehe was Business Unit Manager,and previously VP Marketingand Sales. His expertise coversthe capital equipment industry,and through his extensive salesactivities he has an excellentknowledge of internationalmarkets. He previously heldvarious technical and managerialpositions in Switzerland’sbiggest telecommunicationscorporation. Zurkirch is adoctorate physicist and he alsoholds a Master’s degree from atop business school in Paris.

“We have seen a clear trend that timeto market is an issue”

Dividella ED:13sept 8/4/09 13:49 Page 50

Dividella.indd 1 8/4/09 13:15:06


Cross-divisional solutions will play a

major factor for the success in the future

global supply chain of pharmaceuticals.

End to end integrated solutions is the true com-

petitive edge. The forwarding industry needs

to focus more on integrated solutions, meeting

up with expectations from the pharmaceutical

companies that seek to have cross-divisional

solutions.

The pharmaceutical supply chain is under

great development where the industry is going

from decentralised decision making and func-

tional focus to a model of a true integrated and

value added supply chain model, where cross

functional focus and centre lead strategies are

focus areas.

Warehouse strategies play a signifi cant

role for the supply chain and the potential mar-

kets served. The pharmaceutical industry is

seeking true long time partners that have the

ability in offering all areas of logistical activi-

ties, distribution and warehousing.

The pharmaceutical industry has become

aware of the signifi cant advantage of operat-

ing their supply chain from warehousing to

effective road, airfreight or ocean freight, this

linked with most up to date communication

platforms. The traditional business behaviour

between a logistics supplier and pharmaceuti-

cal companies are changing. Historically there

has been a clean cut in between different solu-

tions, warehousing, airfreight, ocean freight or

road freight.

The future partnerships will span over the

different areas, becoming one integrated solu-

tion. A true global logistics provider must be

able to offer these cross-divisional solutions,

best tailored in any region of the globe where

the customer chooses. It is simply not good

enough only to offer top quality air freight so-

lutions if you can not offer a warehouse opera-

tion tailored to customer needs.

The market demands global solutions

and customers are requesting the ability to

order correct quantities and lower inventory

levels. This brings a change to the order pro-

fi le; orders are becoming smaller. Produc-

tion changes accordingly. This is a challenge

for the distribution of pharmaceuticals.

Consolidation possibilities that can meet

with the lead-time demands of end custom-

ers are highly valuable.

A change of routines in the supply chain

can have dramatic effects if not properly imple-

mented at all levels. With clear communication

the cost of change reduces dramatically.

Global harmonisation enhances the possibility

of maximising effects in a supply chain.

It is the harmonisation and interaction be-

tween the pharmaceutical company, freight

forwarder and carrier that gives the supply

chain success.

There are regional variances in infrastruc-

ture that determine how the supply chain

is operated. A true cross divisional activity

achieves several synergies for both parties.

The fi nancial benefi ts are far greater than if a

customer would operate with three or four dif-

ferent partners for the warehouse, airfreight,

ocean freight and road freight services.

The logistics provider will become more

integrated into the pharmaceutical company

and its full supply chain. Better understanding

the pharmaceutical companies’ demands and

needs will secure a robust service level and at

the same time keep cost down.

Facts are that communication between

parties becomes more effective. The need for

a suitable communication platform is a must.

This part could take some time to adjust to

both parties, but ones up and running acts as

the glue between the parties.

Cross divisional partnering tends to be for

a period of three to fi ve years, this falls in line

with changes that are ongoing in current busi-

ness climate, long term partnering and fewer

partners.

Geodis Group global strategy is to meet

up with the future trends for cross-division-

al demand in the pharmaceutical industry.

Geodis has several partnerships up and run-

ning where a full control, cross-divisional

set up is operated. We see the benefi ts of

this type of approach and seek to partner

with more pharmaceutical producers or

wholesalers.

Geodis Group stand in the forefront of

end to end, cross-divisional solutions for

pharmaceuticals.

INDUSTRY INSIGHT

Cross-divisional integrated solutions

The supply chain has become a competitive edge, a sales argument and at the same time, a key area for cost cutting activities. Time to market plays a signifi cant role for the future.

Martin Svantesson is Vertical

Market Director of Geodis Wilson

Pharmaceuticals. He has 15 years

experience in Global distribution and

holds a Master’s degree in Supply

Chain Management. Svantesson’s

role is to develop Geodis Wilson’s

pharmaceutical distribution solution/

proposal for existing and potential

pharmaceutical customers, as well

as to harmonise a global approach

within Geodis Wilson in regards to

pharmaceutical handling according

to GDP standards.

GeodisWilson.indd 52 8/4/09 13:46:13

GeodisWilson.indd 1 8/4/09 13:16:27


In recent years, the life science industry has faced increasing challenges, often due

to long development cycles, uncontrolled failure risks and growing competition. As

SVP and Head of Process Technology at Bayer, Helmut Mothes is discovering new

concepts in the development and manufacturing of drugs to address these issues.

He explains the signifi cant challenges created by the long development cycle for

drugs, and the risks produced by the complexity of the tasks, advising that the solution

for the industry to apply specifi c concepts proven to speed up the process, containing

those risks in its early phases: “If failure happens in an early phase, the risk of having

spent too much money already is avoided,” he says.

According to Mothes, there are three major concepts that you could apply to manage

that process effi ciently. “The fi rst thing you have to do is introduce what you could call

proof of concept or proof of visibility in the developmental cycle very early, and during

the early phases of a developmental project you have to focus on activities that help to

lead to the proof of concept.

“You also need workfl ows, particularly after proof of concept, that are very stand-

ardised, very modular, and that allow you with minimum risk to achieve the goal, to

break through pre-clinical and clinical development, and then to launch the product.

Thirdly, combined with that second concept, it’s necessary to have standardised tech-

nology platforms, particularly with respect to manufacturing. So these are the three

things that are important to speed up the process and to take the risk of failure into early

phases,” says Mothes.

MANUFACTURING

NEW CONCEPTS

IN RISK CONTROL

Bayer’s Helmut Mothes examines the success of Lean and the development of operational excellence.

MOTHES ED P54-56.indd 54 8/4/09 14:33:40


“To be really successful in operational excellence you need in-

tegrated programs that address three topics. First of all you need an

assessment of where you are and where you could go with your per-

formance. This assessment has to be neutral. It should not be biased

by beliefs that you carry from the past, so that’s the first element: as-

sessment. Second thing, you need methodology. Very often we get pro-

posals, which we improve, but methodology means you have to have

tools, software and handbooks that guide you through the process of

implementing operational excellence projects. So assessment, meth-

odology, and the third level that is automatically linked to operational

excellence is the topic of sustainable implementation: you need things

that allow you to monitor, to steadily improve the key parameters.

“For example, you need online monitoring with respect to key

parameters: assessment, methodology and sustainable implementa-

tion to bring an integrated approach. At biotechnology services we

have put together a package that integrates these three levels and the

package actually aims at different targets,” he says.

Mothes notes the importance of efficiency in improving speed

and flexibility during drug synthesis in the manufacturing of active

substances. He advises the first step in this to be in synthesizing

an active substance, starting with the technologies that are easy to

scale up, which is often done through the setting up of laboratories

that are able to produce very small quantities in a manner that is

similar to a later production side.

Data managementIn terms of improving handling of information, a more efficient

creation of data is important to transfer some of that failure risk to

earlier phases in the development cycle. Mothes explains that central

to this is the development of a drug, whether chemical compound or

biological, which will create a huge amount of data. However, this

does not come without its challenges.

“The problem arises as to how to manage this data appropriately

and also, a challenge even more important in the future, is how to ex-

tract the right information out of this data to support decision-making.

Essentially, you need efficient ways to manage huge amounts of data,

not only for a single-track development project, but also for a variety of

projects, because that may create additional information and opportu-

nities. Also, combining data management with modelling and computa-

tional tools could allow you to extract further information to create more

insights into structures, things you can see by simply handling data.”

In order to shorten the time between target discovery and ap-

proval of the active substance, Bayer has implemented many of the

standard procedures, from high throughput screening in the early

stages of generating small quantities of an active compound, through

to efficient ways of managing clinical testing.

“Of course, there are new ways to improve the performance,” ex-

plains Mothes. “I would like to describe that with an example, which

is not so much related to drug discovery, but to the synthesis of active

ingredients and how to get an active ingredient or an active substance

from the early stages toward the production scale.”

“For example, when you start a development you generate the

first milligram of a product, and the synthesis route you have chosen

to do that will affect what you have to invest later on in the production

side, it will affect how complex the process development will be, and

it will also affect what the risks are. We try to implement a concept so

that you generate the first milligrams of a product with technologies

that can be easily scaled up and then put into reality in a production

plan: micro technology.

“The reaction is done in a single channel and then later on the pro-

duction is done in a multiple number of channels, but what is happen-

ing in a reaction channel doesn’t change. So scaling up is not really a

problem. This is very simplified, but it makes clear that it is possible

to use the same technology platform when you produce the first mil-

ligrams of active substances, and you use the same principles late in

production. That of course significantly minimises the risk of failure

and also optimises the speed of the positive element processes.”

LeanThe move to Lean and toward operational excellence is continuing

to dominate discussions within the life sciences industry, and so with

it becoming a major topic for biotechnological services, to address

topics related to performance and operation. “The idea is to apply

operational excellence in an integrated manner. We want to operate

the process, the plan and the facility as optimally and as efficiently as

possible, so that’s the target, and this objective is particularly chal-

lenging at the moment with all the changes in raw materials and global

competition,” says Mothes.

Helmut Mothes has been Head of the Process Technology

Division at Bayer Technology Services since January 2002.

Prior to this he worked at Bayer’s Animal Health Business

Group in Mannheim, where he was responsible for operations

(manufacturing, supply chain management and quality

assurance). He began his career at Bayer in 1984, working in the

Process Engineering Department of the Central Research Division.

During his five-year stay in the US, he worked first at Bayer Corp

(formerly Miles Inc) and then at Haarmann & Reimer as manager

of the biotechnology pilot plant and later of citric acid production.

MOTHES ED P54-56.indd 55 8/4/09 13:43:11


Bayer also recently signed a partnership agreement to use their

modelling and simulation software, and as a result has implemented

some of the necessary hardware. “These are the first very promis-

ing projects running,” explains Mothes. “What are we aiming at? We

think that these methods could enhance certain development tasks,

such as the area of codings and in the area of formulations and drug

delivery systems.

“It’s important to integrate these computational methods with

what you do in a standard manner with experiments, and these

computational methods allow you to reduce the number of experi-

ments, but they also allow you to challenge your mental models and

that creates new knowledge. We have applied these things to two

or three actual topics in drug development and we think that these

theoretical methods definitely supplement what we do during the

normal development cycle.”

Innovation Bayer follows a strategy that can be described as openly in-

novative: the complexities of the challenges are only successful if

handled without a network of research units, institutes and univer-

sities. A single company is not capable of providing all the neces-

sary resources, making it essential to build a network of research

collaborations. Mothes names the catalysis centre in Aachen as one

example of this: “It’s one element, together with biomaterial signs,

biotechnology services and the university, which we have set up.

In the centre there are people working from the university but also

Bayer people, and in this environment we are carrying out projects

that are more long term.

“We are going for what we call dream

reactions. Currently, we have a product

that you synthesise with five or six steps.

It would be very beneficial if you could

reduce the steps to get to a polymer from

five or six to let’s say two or three, by com-

bining new technologies, new catalysts

and ionic liquids, and that will reduce raw

material demands and investment.

“Since it’s very long-term research, we

also need some time. That’s the reason we’ve supported the centre

for at least five years, but there are already some developments that

indicate there is a potential. There’s still some way to go, but first re-

sults show that we are very likely to be successful there,” he says.

Innovation is important to Bayer, especially in terms of econom-

ics. “If you look at a product like polycarbonate, then currently you

are doing that in plants where you have several steps. You synthesise

step by step and find the product would be polymer. It is feasible to

take two of the main raw materials, carbon dioxide in this particular

case, and synthesise that polymer. There have been a lot of efforts

in the past to pursue so-called ‘dream reactions’ and in principle

they are plausible, but up until now they haven’t been achievable.

“With nanotechnology, new catalysts and new process tech-

nologies, like micro technology, there is a good opportunity to be

successful.” n

“Important to this process are modular and standardised concepts,

along with being able to prefabricate certain things later on for produc-

tion. Currently active ingredients are manufactured in multi-purpose,

multi-product plants, which require upfront investment, and it’s always

difficult to get a high utilisation in these plants. These multi-purpose,

multi-product plants are very flexible but they are less efficient.

“We try to overcome that problem by moving towards continuous

production, and by small but dedicated

processes to manufacture active ingre-

dients. This could change the way active

substances are manufactured: we move

away from a multi-purpose, multi-product

chemical plant toward a more automotive

kind of production for active substances.

“Whether that will actually happen,

we will see. There are certain challenges in

terms of technology that are required, but

what I consider to be the most important challenge for us is changing

production strategies in such a manner that will require a paradigm

change, because you cannot implement a multi-purpose plan in a

small, dedicated line. That will not allow you to utilise all the benefits,

meaning you have to strategically approach the topic. Therefore

Bayer’s biotechnology services, together with those of other major

companies, have started an initiative we call F3 factory.”

The F3 factory project is supported by the European Commis-

sion, and is set up to allow different companies to put together more

flexible concepts, at a faster pace. Since it involves a paradigm shift,

companies cannot push their individual concepts through. Instead, a

consortium of partners must work together to standardise modules

and interfaces. The change from a multi-purpose, multi-product

bench production toward continuous dedicated production is one of

the trends currently being seen in the life science area.

“We want to operate the process, the plan and the facility as optimally and as efficiently as possible, which is particularly challenging at the moment”

MOTHES ED P54-56.indd 56 8/4/09 13:43:14

GraceDavidson.indd 1 8/4/09 13:16:43

Grindeks.indd 1 8/4/09 13:17:03

NGP. What advantages can companies in the pharmaceutical sector gain

from outsourcing their manufacturing requirements?

Lipmans Zeligmans. The main advantages are optimisation of resources

and concentration on the company’s long-term, strategic processes. Why

is this important? The deepening of the global economic crisis has signifi-

cantly reduced end consumer purchasing power and is leading to increased

competition between producers and the price of goods or services and ef-

fectively reducing their costs is more important than ever. This is driving

all market players to find ways to optimise internal company costs and im-

prove efficiency. One option or solution for improving business is to con-

centrate financial and human resources on the company’s long-term,

strategic processes, and to outsource less important, non-core processes

to companies specialised in effectively providing a specific service.

In the pharmaceuticals industry, companies usually prefer to use con-

tractors to perform standard processes, for which there is no risk of knowl-

edge transfer. These are usually standard production processes, but the

choice of sourcing model depends on each company’s specific strategy.

Jim Kernan. Price pressure and a lack of a strong pipeline are forcing many

manufacturers to reconsider the organisation of their production systems.

Some companies are focusing their efforts on improving manufacturing ef-

ficiency by introducing techniques such as Lean manufacturing. Others are

examining their product portfolio and looking to see if they can drop or sell

off some of the small volume products. Still others are adopting a combi-

nation of both approaches.

At the same time, the growth in demand for personalised medicines,

added to the need for multiple line extensions in order to maintain sales and

the opening of new geographical markets, are leading to greater fragmenta-

tion in the number of finished pack presentations demanded by customers.

In the face of these competing challenges, production of solid or liq-

uid dosage forms in bulk for smaller volume products may still be eco-

nomic. The real problem starts when companies want to fill or pack in short

runs and in multiple presentations.

By outsourcing the short runs to partners that have the flexibility to

respond quickly to customer demand and the ability to keep costs at a rea-

sonable level, mainstream manufacturers can free up their large volume

lines to deliver much improved efficiency with far better customer service,

whilst maintaining a full portfolio of product presentations. Inventory and

working capital can also be kept to a minimum.

Anders Ulfhielm. Pharmaceutical companies doing outsourcing activities

can get substantial cost savings and offset the high capital investment re-

quired for building in-house manufacturing capabilities, while still keep-

ing the compliance and quality level.

The companies can also focus on core competencies. CMOs can today

provide technology transfer and manufacturing capacity quickly as the or-

ganisations are small and flexible, and pharmaceutical companies can get

access to additional expertise and expensive state-of-the-art technologies.

The disadvantages are that companies have reduced the opportunity

to develop internal manufacturing know-how and expertise. The loss of

control of manufacturing is a commonly cited concern of pharma compa-

nies. It can also be a concern regarding the confidentiality of developed pro-

prietary information.


ROUNDTABLE

THEADVANTAGESOFOUTSOURCINGOptimising your resources toachieve long-term success, withLipmans Zeligmans, Jim Kernanand Anders Ulfhielm.

OUTSOURCING RT:apr09 08/04/2009 14:41 Page 59

Pharmaflow.indd 1 8/4/09 13:21:17

win-win situation.When you use outsourcing companies or CMOs, you will

always have process and manufacturing steps with a high utilisation level,

and thus will have an efficient value-added process with gains for both the

pharmaceutical company and the CMO. It’s all about having the right criti-

cal mass and utilising the best knowledge.

LZ. Entrusting manufacturing to a company specialising in the relevant field,

with experience, know-how, reputation and all of the necessary resources

for providing the respective service, can have a positive impact on compa-

ny cash flow by optimising inventories both for raw materials and finished

products, since the service provider is fully responsible for this. Also, by

optimising capital expenditures, the company saves both time and the re-

sources required to maintain or adapt the necessary infrastructure and ac-

quire technology as this is all done by the service provider to accelerating

the products’s time-to-market. A company specialising in contract manu-

facturing usually arranges the development, manufacturing, packaging and

delivery of the product in accordance with an agreed, binding schedule in

line with JIT system and GDP requirements.

JK. By outsourcing the fragmented elements of their manufacturing re-

quirements, companies can apply the full rigour of lean manufacturing tech-

niques to improve all aspects of their retained mainline activities including

inventory management, production efficiency and customer service.

By choosing a flexible and responsive outsource partner that spe-

cialises in small volume production, they can also be assured that they will

maximise their ability to service the short run presentations effectively. In

both cases, working capital, inventory cycle and cash flow are improved.

Why should companies applying the principles of Lean Manufacturing con-

sider outsourcing their short production runs?

JK. The highly integrated manufacturing models used by the pharmaceuti-

cal industry are well suited to the application of lean manufacturing tech-

niques, but there are a number of precursors that must be put in place in

advance. One key principle is that Lean manufacturing is best applied to a

stable manufacturing environment where the number of changes to pro-

duction schedules and finished product presentations has already been

minimised.

It is no surprise that the old 80/20 rule that applies in so many indus-

tries also applies to the pharmaceutical sector. Typically, 80 percent of the

profit made on pharmaceuticals is made from just 20 percent of the finished

pack presentations, or stock keeping units (SKUs). The remaining 80 percent

of the SKUs are normally small runners and contribute only 20 percent of the

profit. These small runners also account for an inordinate amount of

changeover time. A disproportionate amount of inventory are frequently the

cause of unplanned interruptions to the production schedule and are often

found at the back of the queue, resulting in poor customer service.

To apply Lean manufacturing successfully it is essential to clear the

decks of the small runners so that full focus can be brought to bear on those

SKUs that offer the greatest potential for efficiency gains. In the meantime,

the small volume products should be diverted to suitable units within the

company’s own infrastructure or outsourced to manufacturing partners

who specialise in short run production.

AU. When outsourcing, Lean manufacturing principles should always been

taking into consideration when evaluating all types of manufacturing steps.

This is especially important when you are doing outsourcing activities with

short production runs, to avoid inefficient steps.

LZ. The lengthy process of developing a product, constantly rising manu-

facturing, equipment and marketing costs, and increasing quality and reg-

ulatory requirements can all delay a product’s entry into the market, which

is critical for efficiency in pharmaceutical companies.

By evaluating its processes and outsourcing those requiring big in-

vestments or specific knowledge, a company can concentrate its financial

and human resources on long-term development and strengthening com-

petitiveness in strategically important areas such as R&D and marketing.

This can all have a positive impact on company cash flow by reducing

product costs and time to market. And isn’t that the main goal?

NGP. How can outsourcing help companies reduce costs, reduce invento-

ries, improve lead times and facilitate improved customer service?

AU. You need to create a company outsourcing strategy which shall be ap-

proved by the executive management, find qualified partners and go for a


Jim Kernan is one of the founders of PharmaFlow Ltd and

is responsible for Business Development. Prior to

PharmaFlow he held senior positions within Eli Lily, Baxter,

Aventis and most recently as Vice President of International

Manufacturing at Stiefel Laboratories. He has extensive

experience of operations, quality and strategy management

within the life sciences sector.

“Price pressure and a lack of a strongpipeline are forcing many manufacturersto reconsider the organisation of theirproduction systems” Jim Kernan


LZ. Grindeks has extensive experience in manufacturing a broad spectrum

of pharmaceuticals. We offer full-service contract manufacturing starting

from development and production of APIs and followed by development,

manufacturing, packaging and distribution of various finished dosage

forms (tablets, capsules, ointments, injections, syrups). This allows our cus-

tomers to optimise their costs for purchasing raw materials, maintaining

inventories, manufacturing and logistics. We are flexible in meeting the cus-

tomer needs and offer tailor-made solutions.

Grindeks constantly invests in modern, high-powered technologies – our

newly finished dosage forms plant opened in 2009, complies with world class

pharmaceutical manufacturing standards and has a capacity of 1.5 billion

tablets and 500 million capsules per year. The manufacturing processes are

organised in accordance with GMP and ISO quality standards, the plant is

equipped with a modern automatic control system that regulates the micro-

climate, manages the technical engineering systems and other manufactur-

ing processes and significantly reduces energy consumption.

An equally important factor is the geographical location of Latvia, the

home country of Grindeks. Latvia is a bridge between Europe and Russia,

which means savings on logistics costs for shipping goods from one side

to the other.

The historical background of Grindeks (links with Russia, the CIS and

Eastern countries), its European business culture, the language skills of

its staff, international quality standards and the significant research ca-

pacity of the company add up to creative and farsighted business solutions

at still very reasonable prices.

This is especially attractive to medium sized Western European com-

panies that prefer to do business on a European scale.

AU. Companies need to utilise the CMO fixed assets in an efficient way, pro-

vide an umbrella overview, be flexible, put strong efforts in improving com-

munication levels and establish a professional project management

system. n

NGP. Pharmaceutical companies are coming under increasing pressure to

reduce costs, lower inventory levels and ensure continuity of supply. How

can companies like yours help them to achieve this?

JK. PharmaFlow was established in 2004 by experienced pharmaceuti-

cal professionals to provide contract manufacturing services for small

batch/multiple presentation products in the pharmaceutical and natur-

al healthcare sectors. Operating in a fully GMP licensed facility, we spe-

cialise in providing innovative, flexible, low cost formulation, filling and

packing solutions.

By outsourcing short runs to PharmaFlow, our customers achieve in-

creased production efficiencies, minimise production delays, reduce inven-

tory, improve customer service, shorten their cash cycle time and free up their

own management team’s time to focus on improving all round profitability


Lipmans Zeligmans is the Director of Final Dosage Forms

Manufacturing of Grindeks. He has worked for Grindeks since

1992 and has developed tremendous experience in managing

the manufacturing processes of company products, as well

as for contract-manufacturing partners. Under his guidance

the new solid dosage forms manufacturing plant of Grindeks

was built, equipped and opened in 2009.

Anders Ulfhielm is CEO at Rechon Life Science AB in

Malmö, Sweden. He is responsible for creating a new

pharmaceutical business in Europe with the newly founded

company Rechon Life Science, which has Chinese owners.

He has long experience in executive positions within the

pharmaceutical industry at Astra, Kabi-Pharmacia, Gist-

brocades and Ferring Pharmaceutical.

“By evaluating its processes andoutsourcing those requiring biginvestments or specific knowledge, acompany can concentrate its financialand human resources on long-termdevelopment” Lipmans Zeligmans

“Pharmaceutical companies doingoutsourcing activities can get substantialcost savings and offset the high capitalinvestment required for building in-housemanufacturing capabilities” Anders Ulfhielm


Rechon2.indd 1 8/4/09 13:22:08


“What we’re trying to do overall is look for the suppliers we can

keep growing with, that we can keep collaborating with, and that we

can get even closer to than we’ve done before. This is the basis of sup-

plier relationship management. But how exactly the crisis is going to

change the landscape, I’m not sure. It’s our job to try to be able to see

ahead of time which are the ones we can work with, which are the ones

we can help, and which are the ones we feel may become a greater

liability, for which we may have to put in contingency plans.

“We recognize the risk, but also the opportunity. We’re fortunate

enough to be working in the pharma industry, which is typically not

as hit during a recession. We’re still impacted, but we’re not hit as

hard as maybe more variable spend industries, although we certainly

have our business pressures to look for effi ciencies and economies of

scale. On the other hand, in our approach the supply base that we deal

with is probably even more fragile. Because to that we do have to be

a little bit cautious.

“Whenever we see some vulnerabilities, as a large, multinational

pharmaceutical company, we can offer stability of volume,” he says.

“We can offer assistance with cash fl ow – there’s a high level of cer-

tainty that we’ll be able to pay our bills at the end of the day – and

we can also look for commitments beyond the immediate short-term

future. So we can both leverage the market opportunities and also

work with our vendors to strengthen them in those times of turbu-

lence, and that’s how we’re adjusting the strategy.”

The effect of this turbulence on the required skill sets for pro-

curement executives is drastic. In a stable market, negotiation is


Turbulence ahead_Rashed.indd 65 8/4/09 14:01:06

ABB.indd 1 8/4/09 13:08:10


essential, and the relationship between buyer and seller is

balanced: following the transaction, one person will lose some-

thing, one person will gain. Rashed explains that in the current

economic crisis, there are certain situations in which negotiating

and pricing is not suitable. Instead you must take an overall look,

not just from a sourcing leadership aspect, but also considering

the business continuity and the business element.

“Now is the time to make some changes; like everyone else,

we will seek gains to make it through the market conditions,

but we also have to think a bit more longer term, and this goes

beyond the purchase order transaction,” says Rashed.

New strategyA strong department depends on good people, and in 2005

Rashed launched the Talent Management Initiative within the

manufacturing department, which was considered an unusual

move. He did this not because of any personal desire to stand

out, but from a logical and business necessity.

“I had just moved into the European role and there were 100

people in the team, spread across 27 different sites, the majority

of whom had not come from sourcing. We had some who were

new learners coming on board to the function, and it was hard

to distinguish who was who and what they knew. So it originally

started off as an assessment tool, to understand competency

skill levels and requirements – what is the demonstrated versus

the needed? When the findings came out, they were pretty re-

vealing, but then the question was, “What do we do with that

information?

“We identified a lot of gaps. The outcome was that we put

together a program, which was meant to not only address the

talent gaps but also bridge them, and by doing so the needs of

the function were actually evolving faster than we were able to

bridge them, and that’s when it became a more comprehensive

program,” explains Rashed.

The initiative originally started as a tool to correctly assess the

right people, based on skills competencies, but the actual outcome

was far greater than expected. It became a talent development pro-

gram of on-the-job action learning and mentoring, expanding the

potential for growth and contribution of each individual.

“In this way, we can make sure we hold the top performers in the

organisation. It took us about a year and a half to build and is very

useful. It was once again applied out of necessity, but we took that as

a base to expand and make it a global sourcing program, which is now

being carried across all divisions,” he says.

According to Rashed, the difference following the initiative has

been huge. “If you look the quantified numbers, the savings have

undoubtedly been a lot more than in the past. We’ve doubled or

tripled our savings performance from being probably lower middle

of the pack being among the best in class companies. If you look

at the ROI of our functions, measuring the investments versus the

return based on salaries, overhead, the fixed costs and so on, ROI

has pretty much doubled versus what it was, so it has been a very

good investment.

“This has come through a change of requirements in skills and

competencies. The support function, the more traditional role, has

mainly been either automated, delegated, outsourced or sometimes

just purely eliminated, and we’ve constantly moved upstream in the

decision making chain getting closer to a customer, but adding value

much earlier in the process.”

War for talentThere is a well-publicised war for talent within procurement, which

begs the question of exactly what the hiring organisation has to get

right. Rashed advises that the answer to this involves a variety of dimen-

sions, the first being what is the exact level at which you want to hire?

“We can both leverage the market opportunities and also work with our vendors to strengthen them in these times of turbulence”

Sammy Rashed has 17 years’ experience in procurement management across

various industries, and currently heads sourcing globally across Novartis’

pharmaceuticals sites. His areas of expertise include regional program deployment

and talent development in the sourcing function.



“On one hand, you want to make the job responsibilities as at-

tractive as possible, and at some point they all convert from the soft

skills that we’re looking for. But you get to a certain level where you’re

competing with much more established functions, so you don’t want

to over-specify the requirements needed from the individual.

“You also don’t want to over-promise what the job will do if the re-

ality is you’re building the competencies that you need two years from

now, and it’s not going to be ready to be deployed until then. In other

words, if you hire someone with a strategic mindset, who comes with

a bag full of ideas and wants to change the world, but you put them

behind the desk to tactically negotiate with vendors and ensure com-

pliance, that’s a big mismatch. This has actually happened a few times

in the past. From that perspective, it’s about getting the level right.

“The second thing is the environment. If I look at our company

specifically, we probably offer more sustained and faster career

growth than the average company. Every so many years, you can

expect to move on to the next level. What comes out of that is the

notion of the career curve.

“You can asses an individual’s progress by measuring what has

been the growth historically versus the level of responsibility, and if

you see someone with a relatively flat curve and the position we’re

offering them now is way above the normal trend they’ve had in the

past, that should raise some alarm bells. Likewise, if it’s a parallel

move by someone who’s fully done the role before, they may not get

the same level of satisfaction from coming in and doing the exact

same role again.

“From a summary perspective, it’s about sizing the job, not just

from an aspiration perspective, but also in terms of reality: what will

the job look like, and how does that fit within one’s career growth? The

keyword for me is ‘growth’. The function is growing quickly, and we’re

looking for people who can sustain the growth, come in for a while,

either grow with the function or grow out of the function at some point

back into the business. But at the current moment it’s not a place to

come and look for stability for the next five years. It is moving too

quickly,” explains Rashed.

If there ever was a time for thinking outside the box, this is it.

The recent mergers and acquisitions within the pharma industry

are producing a knock-on affect on the ability to combine different

procurement skill sets. “I can tell you that, from my discussions with

the people impacted, this is having a drastic change within their day

jobs. The quantity of available talent is going up by a tremendous

amount. If anything, when you have mergers and acquisitions, there

are usually a number of redundancies that happen as a result of that,

and the function as a whole is becoming leaner.

“The market has seen more availability of resources in the pro-

curement field, but the quality is not there. People who can navigate

through those turbulent times have got a strategic mindset, a good

vision, good engagement skills and are strong communicators.

These are not the typical skills of procurement professionals. These

we’re still looking for, referring back to the war for talent. Anyone

who has got those qualities will be doing very well in the market

despite the number of people available,” he says.

In terms of how procurement skills will develop over the next few

years, Rashed doesn’t see much change from current trends. The

factors he emphasizes are the ability to understand and align with

the business strategy, the ability to engage with senior stakeholders

– how you get them to accept that you understand their needs and to

trust you sufficiently to give you the leadership of the projects to get

their needs met – and being more entrepreneurial, being able to es-

sentially identify, build, initiate and lead cross-functional projects.

“You’re not working for the business; you’re working with the busi-

ness, often in a project leadership role where you rally different

team members from different functions together towards a common

goal, and you essentially elevate your role internally to a business

productivity champion.

“If I compare skills with technical competencies, the technical

competencies can often be trained; the skills are a bit harder to

come by,” says Rashed. The transferable skills usually play a heavier

weight in the decision to hire or not than the technical competencies,

and you can usually get a feeling as to whether the person has those

skills in the first few minutes of a conversation or an interview, then

the rest becomes a set of validation. It’s finding those candidates

that are ready now with those skills and behaviors. Again, every

other function is looking for the same skills and mindset, we’re not

unique in that,”n

“You can asses an individual’s progress by measuring what

has been the growth historically versus the level of responsibility”


Creapharm.indd 1 8/4/09 13:14:09

The pharmaceutical industry is under great pressure, not only because

of the financial crisis but also due to low pipelines, patent end-life,

new therapies, long product development lead times, low asset util-

isation in production facilities and regulatory changes. Driven by future de-

velopment and manufacturing strategies, several major pharmaceutical

companies have initiated an acquisition process to be ready for the indus-

trial challenge which is knocking on the door.

Nevertheless, acquisitions will not only lead to the expected quantifi-

able and qualifiable benefits, but also technical and functional changes are

also inevitable to meet future challenges. Several companies have started

an expedition to increase operational efficiency, reduce the production

costs, accelerate time to market and address niche markets (such as per-

sonalised medicine). This expedition is strongly supported by the regula-

tory authorities, such as the FDA and EMEA, and they encourage the

industry to work on a consistent and high-quality drug product, ensuring

the required therapeutic effect to the patient.

Regulatory authorities emphasise that patient safety comes first and that

a consistent and high-quality end product is a must. In other words, process

understanding and management of process variability are key today for R&D

as well as for manufacturing departments. It took some time but today the

industry confirms that the PAT (process analytical technology) and QbD (qual-

ity by design) concept is key to increasing process understanding.

Also, the new draft Guidance on Process Validation describes the FDA’s

vision on the alignment of process validation activities with the product life-

cycle concept. The guidance clearly references the PAT/QbD concept as a

cornerstone for, “The collection and evaluation of data, from the process

design stage throughout production, which establishes scientific evidence

that a process is capable of consistently delivering quality products.”

Various new technologies find their way into and will change the current

pharmaceutical landscape. Intelligent and multidisciplinary solutions will

allow companies to address current and future market challenges and be-

come more competitive.

The solution of choiceSiemens can be an important partner in helping the industry to improve

R&D and manufacturing performance, supply chain, quality and asset man-

agement. Bringing together the customer’s requirements with Siemens’ ca-

pabilities is our main target. One of the key technologies in which Siemens

is investing which will continue to drastically change the pharma industry

is PAT/QbD. PAT guarantees the quality of the end product by measuring

the critical quality and performance attributes of raw materials, in process

materials and processes in real-time.

The PAT/QbD solution of Siemens, called SIPAT, is the first configurable

and user-friendly PAT/QbD solution which links all PAT tools (for example,

process analysers, multivariate data analysis solutions, off-line laboratory

data, process control data and historical data) together into one real-time

PAT/QbD architecture. SIPAT collects and aligns process data, analyser

data, laboratory off-line data and manual data, executes model-based cal-

culations for quality predictions and views all data in real time for batch

quality analysis, which can also be accessed off-line for analysis and model-

building improvements. A replay function allows new models to be tested

and validated based on historical data.

As several major and smaller pharmaceutical companies have decid-

ed to implement SIPAT in their processes (R&D and/or manufacturing),

SIPAT is becoming the solution of choice for PAT/QbD in the pharmaceuti-

cal industry. Siemens has extensive experience with PAT projects and its

multidisciplinary team can help customers in subjects such as setting up

the DoE (design of experiments), data modelling, risk based analysis, SIPAT

configuration, manufacturing control strategy (including advanced process

control) and integration of SIPAT into the IT landscape. The interaction of

Siemens with the pharmaceutical industry and the intensive communica-

tion with regulatory authorities in the US and Europe have placed Siemens

in a strong position to provide the industry with the products and solutions

which are needed, today and tomorrow. n

Better process understanding


Patrick Boosyut looks at software solutions to help the pharmaceutical industryimplement process analytical technology.

INDUSTRY INSIGHT

Patrick Boosyut is PAT Account Manager in the Production and Quality

Management group of Siemens. He obtained a Master’s degree in

Chemical Engineering, with a specialisation in Biochemistry. He has

worked for seven years in the LIMS (laboratory information management

system) and PLM (product lifecycle management solution) and quality

management systems business. Today he focuses on the application of

PAT/QbD in the pharmaceutical sector, designing PAT/QbD infrastructures

and consulting with companies on their project approaches.

“Technical and functionalchanges are inevitable tomeet future challenges”

SIEMENS:mar09 08/04/2009 13:49 Page 70

Siemens.indd 1 8/4/09 13:24:36


ROUNDTABLE

Strategic outsourcing of manufacturing

The strategic outsourcing of the manufacture of active phar-

maceutical ingredients, intermediates and reagents by the

pharmaceutical industry during the last three decades of

the 20th century was the key driver for the development of the

fi ne chemical industry around the world. There have been periods

when this trend was temporarily halted and in some individual

company cases reversed, but overall the outsourcing trend has

continued. This trend has been driven by the pharmaceutical in-

dustry’s need to focus on its key business drivers, fi rstly research-

ing and fi nding new medicines and treatments, and secondly the

global marketing of their products. The cost, and to some extent

expertise, of chemical manufacture, with its capital-intensive

plant and equipment, is a burden that most medicine manufactur-

ers can no longer afford to bear. Consequently partnering with re-

liable, quality driven and cost-conscious fi ne chemical suppliers

is of vital importance to modern pharmaceutical companies.

Over the last 30 years, many small and medium-sized fi ne

chemical businesses grew on the back of the pharmaceutical in-

dustry’s outsourcing opportunities. This growth in turn attracted

several major chemical corporations who thought that this was an

opportunity to move into higher added-value intermediates. The

bigger companies actively pursued and bought up many small

and medium-sized fi ne chemical units. However, it has become

apparent in the 21st century that they often failed to recognise

that the companies they had bought had built their reputation

on the speed of response, quick local decision-making and fl ex-

ibility that their customers demanded. These characteristics

are not easy to manage in large corporations and more recently

many of the businesses that were acquired have again been spun

out, freeing themselves from the overhead burden and complex

decision-making processes of large conglomerates.

The north east of England has particular strengths in fi ne

chemicals and companies in the region have histories that re-

fl ect the scene we have set out above. The North East of England

Process Industry Cluster (NEPIC) has many small, medium and

large company members that are able to work at all levels of the

pharmaceutical supply chain. Companies with bases in this region

can deal with the development of new molecules, the scale-up of

processes, the delivery of clinical trial materials right through to

full-scale manufacture and indeed into formulation and packag-

ing. Here, four signifi cant NEPIC members talk to NGP about their

experiences supplying outsourced products to the pharmaceuti-

cal sector – Aesica Pharmaceuticals, Piramal Health Care, Shasun

pharmaceutical Solutions and Fine Organics Limited, whose busi-

nesses in this region are approaching 200 years of experience in

this activity.

NEPIC ED P72-74.indd 72 8/4/09 13:44:57


NGP. Life within the large corporate organisations clearly did not suit

your business model. What was it that drove your organisation to its

current business position?

Aidan Walker. Although the move out of big pharma wasn’t one that

the majority of staff welcomed at the time of transition, the ability

to clearly make a real difference and, to a large extent, meaningfully

infl uence their own futures is a change that many are now very posi-

tive about. The growing variety of business has also allowed us to

capitalise on the wasted inherent capabilities that had previously lain

dormant within many of the staff.

Kevin Cook. Speed, fl exibility and service have always been the cor-

nerstones of our offering at Dudley. The acquisition by Shasun has

allowed us to become a more signifi cant part of a more focused or-

ganisation, enabling faster decision-making and greater responsive-

ness, with a common goal across the entire organisation of providing

the highest level of service to our pharma customers.

Keith Hanson. Our business model is driven by customer service,

fl exibility and rapid response, which ultimately adds value to our cus-

tomer supply chain and minimises risk by reducing time to market.

Being an independent company, we are able to make decisions quickly

and expedite solutions with minimal bureaucracy. Also, the ability to

freely explore a wider spectrum of market sectors increases our scope

of business opportunities signifi cantly.

Keith Payne. The need for more entrepreneurial and innovative think-

ing to adapt faster to market conditions and customer requirements.

Aidan Walker is Site Manager

at Piramal Healthcare, Pharma

Solutions. Prior to this he had a

number of leadership roles. On the

sale of the Morpeth site to Piramal,

Walker was appointed Site Leader and

has led the site through its transition

from a supply site to a standalone

business unit within Piramal.

Kevin Cook is Operations Director at

Shasun Pharma Solutions Ltd. He has

over 22 years’ experience in chemical

and pharmaceutical manufacturing

and has held a range of managerial

positions in the areas of HSE, supply

chain, operations and new product

introduction. Prior to joining Shasun

Pharma Solutions in 1992, he served

in various operational roles with

Boots Pharmaceuticals.

NGP. Manufacturing for the global pharmaceutical market as you do,

what are the priorities that are being demanded by your customers?

KP. Globally, pharmaceutical customers are looking for us to be reli-

able, resourceful, fl exible and competitive.

KH. Security of supply, high standards for safety, health, environment

and quality, technical innovation and optimum cost.

AW. On the whole the demands are the same as they have always been:

on time delivery, at the right quality, at competitive prices. There is

growing pressure on prices as would be expected and also a growing

requirement to be able to demonstrate a secure supply chain.

KC. With the continuing trend toward outsourcing and a growing de-

pendency on external manufacturing, assurance of supply remains

a key priority for our customers with technical expertise, on-time

delivery, right fi rst time production and comprehensive quality, and

HSE systems and controls being essential components of a successful

supply chain. Within an ever more competitive landscape, this is very

closely followed by cost.

NGP. Innovation has always been a key driver for outsourcing of prod-

ucts in the sector. How has this infl uenced your business strategy?

KC. At Shasun we recognise that innovation is a critical aspect of sup-

plier selection, complementing the benefi ts of continuous improvement

and operational excellence with the ability to deliver step changes in

quality and cost. Innovation is a key element of Shasun’s offering and

is delivered through two main platforms, manufacturing innovation,

Keith Hanson is Managing Director

at Fine Organics Limited. He spent

28 years with Laporte and Evonik

Degussa, latterly as General Manager

of Seal Sands. Hanson has managed

most of the functions on site and in

the process has acquired a practical

understanding of the internal and

external dynamics of the business.

Keith Payne is Sales and Marketing

Director at Aesica Pharmaceuticals

Ltd. He joined Aesica in 2007

and became Sales and Marketing

Director in July 2008. Prior to joining

Aesica, Payne was Senior Vice

President, Product Development

Services at NextPharma and was

previously Commercial Director

for Clariant Life Science Molecules

(formerly Archimica Fine Chemicals).

NEPIC ED P72-74.indd 73 8/4/09 13:45:11


with the application of new manufacturing techniques to deliver cost-

effective solutions to our customers; and combining dedicated R&D

resources with regional collaborations and a world-renowned scientifi c

advisory board to drive the application of innovative technologies, such

as Shasun’s proprietary Fluorination, ABF and HKR technologies, and

bring novel synthesis solutions to our customers.

KP. Our business strategy is driven by the goal of providing innova-

tive services, approaches and special capabilities for synthesis and

formulation of pharmaceuticals, which is responsive to our customers

needs for outsourcing.

KH. We are a toll manufacturer of pharmaceutical intermediates and

hence on many occasions the processes supplied are relatively fi xed

by registrations to the regulatory authorities. Innovation has to be

looked at in the fullness of the supply chain, starting with the most

effi cient use of assets.

AW. Innovation for us has primarily been fo-

cused around developing our one stop shop

offering. With this in mind we have invested

heavily in capabilities that extend the scope

of our offering beyond traditional manufac-

turing. These include both development

capabilities in API and formulations, as well

as a brand new clinical trials services unit.

NGP. As productivity is key to effective cost control and pricing, how

has your involvement in your region’s improvements, through NEPIC

and One North East, benefi ted your business?

KH. Our CI programme has been driven by the site management,

supported by local expertise as and when needed. We have had tre-

mendous support from One North East over the last four years. Our CI

training programme was support by NEPA and NAC and latterly we are

working with NEPIC to improve our business support mechanisms.

AW. We have received signifi cant benefi t from involvement in a number

of these programs. Right now we are coming toward the end of our

narrow and deep intervention, after which the whole workforce will

have attained the skills necessary to ensure we can drive productivity

improvements from shop fl oor level upwards on a sustainable basis.

KP. Aesica has certainly benefi ted from our staff participating in

NEPIC and One North East seminars, which raise awareness on in-

dustry best practices, operational effi ciency and other measures

that improve productivity.

KC. Through NEPIC, Shasun has participated in a number of manu-

facturing and energy effi ciency programs, sharing best practices

and benchmarking across the cluster to deliver tangible benefi ts to

our business.

There is an ever-increasing pressure on the price of

drugs arising from governments across the world. There

is also a growing moral obligation to supply cheaper

medicines to less economically developed countries.

Furthermore, pharmaceutical companies have the

strategic need to focus their management expertise

on researching and developing the next generation of

pharmaceuticals. All of this has given added intensity

to the manufacture of cost-effective pharmaceutical

ingredients. Companies like Aesica, Fine Organics,

Piramal and Shasun, by providing a range of outsourcing

opportunities, and a service that is effi cient, of high

quality and fl exible, have become key partners in the

pharmaceutical supply chain.

Within one hour drive time in the North East of

England, there are companies working across the whole

pharmaceutical supply chain. They represent over 33

percent of the UK’s pharmaceutical GDP. This sector is

provided with a wide range of support services via the

regional development agency One North East, including

world class activities such as the Centre for Process

Innovation and NEPIC.For more information, please visit www.nepic.co.uk

“In the North East of England, there are companies working across the whole pharmaceutical supply chain”

NEPIC ED P72-74.indd 74 8/4/09 13:45:15

Nepic.indd 1 8/4/09 13:20:50


MANUFACTURING

SLIM DOWN, TONE UP

Dreamer.indd 76 8/4/09 13:57:11


Steve Dreamer always knew that achieving his desire to

change the way in which European pharmaceutical manage-

ment operated would be painful, but as he discovered, with

much pain comes much gain.

“We started off in the US in implementing some of our operational

excellence programs and we proved that they worked there, so then we

brought them over to Europe,” says Dreamer, Global Head of Pharma

Engineering for Novartis. “There was some scepticism up front as to

whether this would this really work or if this just an American way of

doing things; Europeans often like to have 100 percent of the answers

before making a decision.

“We were able to move very rapidly in the US on some of our im-

plementations and they recognised that and admired it, saying, “Well

how do we get our people to think differently? What can we do so that

they can adopt some of this 80/20 type thinking so that we can move

forward as well?”

CollaborationOne of the key ways in which Novartis developed their process

teams to bring about a change in managerial direction was to put the

quality control laboratories within the process team. The traditional

thinking would be for the quality control laboratories to stand alone,

as a separate group. Dreamer argues that by combining the two, there

is an increase in open communication and an improvement in quality.

“What the agencies are really looking for is to be able to solve

these problems collaboratively, not the previous confrontational type

arrangement. As we try to collaborate with the agencies, this builds

a level of trust and comfort, so by doing that and showing that these

changes are accepted by the agencies, that helped open up commu-

nication,” he says.

“When there’s a new technology on the market, people often buy

it, thinking it to be ‘cool technology’: it runs faster and makes things

prettier. They implement it and then they forget about the other el-

ements. So it may be a fast piece of equipment but if the materials

don’t allow you to run fast you don’t get any gains. If the process is

upstream and downstream of that new piece of technology, and if

they aren’t in line, you don’t gain anything, and if the people aren’t on

board you certainly don’t gain anything either.

“So we always look at those for elements to make sure that things

are in sync. When we look at an improvement we try not to look at

just a silo or unit operation, we try to look at what’s the impact of

the business. If we want to change the business we look the process

of material and the operations that are going to impact the business.

Then we look at the roles of the people, and then fi nally the people

that are in those roles. We always follow that formula and it seems to

work,” says Dreamer.

Originally, the changes that came in the traditional way did so via

a person joining, changing the organisation, bringing in new people,

and then letting them pick the process. However, this system was

simply not effi cient enough for Novartis, who have instead decided to

fl ip the process around.

Management change“We do this on a local scale, as well as on a global scale. There’s

a change management program that goes with it, which makes every-

one aware of how uncomfortable the change is going to be, so we take

people through this training and we support them.

“The most important thing of all of this is the leaders. We’re trying

to develop them as coaches, not as managers. We don’t want people

that are going to go out and tell their operators and workers what to

do. These people know better than anyone how to make medicines,

so what we want to do is coach them, and that helps them through the

transition,” he explains.

Novartis’ structure can be described as the creation of a much

fl atter level of management organisation. The company fi rst deter-

mines the various places in which people with specifi c qualifi cations

are needed, and then puts the right people in those places. Dreamer

explains that if this is done in the right way, then management are

able to take a step back, and the operations should be able to suc-

cessfully run independently.

How Steve Dreamer is whipping Novartis’ manufacturing process into the best shape of its life.

Dreamer.indd 77 8/4/09 13:57:22

Sensitech.indd 1 8/4/09 13:24:20


“If you don’t address the process fi rst,” says Dreamer, “If you just

go in and try to do cultural training, you don’t gain anything. I’ve had

a lot of people say, ‘We don’t want to change our processes. We just

want to change the culture.’

“I’m not convinced that simply changing the culture will work be-

cause, although you may change people to think differently, they don’t

act differently. By changing the process they have to act differently

and that forces them into a new way of thinking. Then you get a culture

change. If you do that in the right way, they can’t drift back to the way it

used to be. You’ve eliminated all the different levels of management.

“In some of our sites we had eight levels of management. Today

on all of our sites we’re at three levels. There are one or two still at

four and they’re moving to three levels. When you get to that point

you’re never going to come back in and add layers, so you only hire the

people that can work within this new framework and we’ve done that

for 18 sites now quite successfully,” he says.

Target 2010Successful is certainly an accurate word with which to describe

Novartis’ management change, with a full implementation of a Lean

structure almost in place. Dreamer attributes this to the managerial

adoption of a “top-down vision”. “You can’t just sell – people go out

and do Lean or people go out and do improvements. They’ll walk dif-

ferent directions so you have to bring it together; they want some-

thing to work towards so we try to put this vision in place. We call it

‘Target 2010, The Toyota of Pharma’, which is a fi ve-year plan. We put

it in place in 2005 and it’s running through 2010, and we never waver

from the program.

“Often in large companies each year they come out with a new

fl avour, but we’re trying not to do that. We have a vision as to what

we want the supply chain to look like and we work toward that bottom

up. We enable the people, we give them the tools, we describe what

processes we want and we let them work. They start at the low level

site-by-site and we start connecting it together, adjusting the people

as we go.

“Some of these new supply chain techniques are not learnt in

university. Nobody else in the industry has done it, so you have to

create the people and that takes time. You have to bring them along,

educate them, and sometimes you have to change people as well, but

eventually we work toward that vision. We have measurements along

the way that we look at: throughput time, customer service levels,

productivity and overall asset effectiveness. You monitor those and

you advance in one area, and then you work in the other area. All of

those things have to line up well in order to really achieve that vision,”

he explains.

However, the implementation of Target 2010 does not neces-

sarily mean a rigidity of the system. With learning, change be-

comes necessary. “One of the things that we always tell our people

is identify 80 percent of it and go. Twenty percent of it you’re going

to have to figure out along the way. If we tried to get all 100 per-

cent we’d never get anywhere. Somebody asked the other day,

“Part of the reason we’re successful is that we’re consistent, we do the same thing every time and it’s very predictable”

Steven Dreamer speaking at the NGP summit

As Head of Novartis’ Global Pharma Engineering

& Innovation Quality Productivity, Steve Dreamer

is responsible for providing technical and project

management for the major capital investments, and for

building operational excellence capability for the TechOps

organisation to achieve Target 2010, The Toyota of Pharma

Vision by embedding Lean, process oriented organisation

and other re-engineering processes.

Dreamer.indd 79 8/4/09 13:57:26


‘Okay, 2010 is next year. What’s the next vision?’ We don’t know.

We’re comfortable in saying, ‘I don’t know’ because when we get

there we’ll f igure out the next step. If we start thinking about it

now there’s still opportunity over the next year to realise certain

improvements and we may forego something if we try to do it too

soon,” he explains.

By the end of 2009, the vision for Novartis’ next plan is due to be

implemented. Rather than a master plan, like the one implemented in

2005, this time around they are opting for a step-by-step proposal,

allowing them to continue learning on the way. The established

values of Novartis’ traditional structure are steadily being replaced to

encompass a learning organisation, and change the culture in which

managers think, encouraging them to be positive about the changes

and inspirational as to what the next steps should be.

Continuous manufacturingAnother policy that Dreamer is championing is continuous manu-

facturing. He explains that one of the advantages of the crea-

tion of a Lean structure is to reduce overall throughput time

end-to-end, from the first chemical step all the way through

distribution.

“In some cases, for major products, we’ve been able

to go from 550 days down to 200 days. If you continuously

manufacture, you conceivably go from 200 days down to 35

days or less, and it’s not just changing existing batch proc-

esses and connecting them together in a continuous way, but

it’s changing the chemistry.

“One of the advantages is that there should be signifi-

cantly less capital investment. We combine all of the steps

of the drug product together into one manufacturing step

and, because you put stuff in one end of the pipe and you get

tablets out the other, you can control quality better. You don’t

have all of these intermediate tests that you have to deal

with. No other company has done this. It’s a 15-year journey

for us: we’re in pilot now this year and we’re starting to see

some progress with it that makes us believe it’s going to be

real,” he explains.

The move to Lean and the push for continuous manufac-

turing are coalescing that vision, which is displaying the in-

novation part of the process. Dreamer notes a Lean program

already in place, Innovation Quality Productivity (IQP), which

focuses on the quality removing variability from our proc-

esses. He explains this to be the typical Six Sigma, whereas

the innovation part of pharma to be a little more difficult.

Innovation“We’re innovative in the products that we develop, but

we don’t want to have operators running around the plant

being innovative and trying new things. Part of the reason we’re suc-

cessful is that we’re consistent, we do the same thing every time and

it’s very predictable. There’s no room for innovation in the way you

make the products. However, if you can redesign the whole process,

innovation can make a difference there and we believe this might be a

strategic advantage for us in the future.

“Innovation in the pharmaceutical industry is producing products

that solve disease issues in a different way: it’s the overall health of

it. Is it important to have innovation in the way you make the product?

We’re not in the business because we make the product. We’re in the

business of healing, of solving unmet medical needs. That’s the in-

novation part and that’s where the industry really should focus: on

making the product.

“We should be able to make it with the highest quality, with the

fastest time, and with the lowest cost, and if innovation can help drive

that then we will look at it, but innovation in making product brings

probably not a lot of benefit to the customer in the end. Ultimately,

they’re going to get a tablet and they won’t know if innovation took

place in there, not like an iPod or other devices that a consumer would

see. So for us, innovation is improving quality, reducing cost, or being

more responsive to market demand, but the real innovation for phar-

maceutical is in the patient healthcare,” Dreamer concludes. n

“We have a vision as to what we want the supply chain to look like and we work towards that bottom up”

Dreamer.indd 80 8/4/09 13:57:30

Arvato.indd 1 8/4/09 13:09:52

SCA2.indd 1 8/4/09 13:23:45


NGP. The pharmaceutical industry is subject to increasingly stringent reg-

ulations regarding its supply chain. What challenges does this present to

companies?

Jean Bédard. Companies involved throughout the pharmaceutical supply

chain must comply with the new stringent regulations on the storage and

transportation of pharmaceutical or medicinal products.

One challenge is to gather all the necessary data and information to have

a clear understanding and knowledge of the storage and transport conditions

that prevail throughout the supply chain. This can be a long and complex

process as it involves uncontrolled environments (transports, seasons) and

many potential stakeholders, such as wholesalers, transporters, pharmacies,

etc. While pharmaceutical warehousing and storage zones are controlled en-

vironments and are easier to validate, uncontrolled environments such as

those observed during the transportation and distribution of drug products

(ground, sea and air) certainly represent a challenge to companies.

Another challenge is to reach a pharmaceutical supply chain that is both

fully compliant and economically sound. An optimal pharmaceutical cold chain

should ultimately provide compliance but limit the additional distribution costs.

Richard Harrop. I am often tasked with evaluating the impact of new regula-

tions and industry guidelines on a company. When doing this it is vital to un-

derstand the key focus areas; performance and price. Do new regulations

demand greater performance and will this greater performance increase cost?

NGP. What methods can companies use to comply with these regulations?

RH. Partnership is key. The pharmaceutical manufacturer, logistics provider,

ancillary packaging designer and data-logging supplier should be dis-

cussing the project together from day one. Building this team ensures clar-

ity is present throughout the development process and all aspects of the

supply chain can be considered.

JB. There exist various methods to be used in order to reach cold chain com-

pliance. Our approach is to start first with an exhaustive cold chain regulato-

ry gap analysis where the pertinence of the cold chain regulations, as well as

the extent of cold chain management actions to be applied, are verified and

established in regard to the audited company and supply chain.

This preliminary step enables us to develop a cold chain compliance

plan that can be orderly and progressively implemented to the company

and its supply chain.

The compliance with cold chain regulations will require acting on var-

ious cold chain quality aspects, from optimising stability and temperature

excursions test studies, updating the cold chain quality system (person-

nel training, procedures, quality agreement), validating all cold chain

processes and equipment (mapping of warehouses and storage areas, tem-

perature profiles study during transport, I/O qualification of temperature-

controlled storage systems), up to installing cold chain monitoring where

needed (temperature-controlled storage and transportation areas, ship-

ments and products).

NGP. What tools are available to enable companies to maintain the integrity

of their products during the manufacturing and supply chain process?

JB. Cold chain monitoring and packaging systems are the major tools to

maintain the integrity of products during the manufacturing and supply

chain process.

We now have efficient and user-friendly

monitoring systems to automatically and con-

tinuously monitor the environmental condi-

tions during the handling, storage and

transportation of pharmaceutical products.

Companies have access to new technologies

such as monitoring solutions, wired/wireless

sensor networks, data loggers and thermo-

couples to effectively monitor manufacturing

facilities, warehouses and storage areas, stor-

age equipment, transport, shipments and

products in transit. Furthermore, special at-

tention should be put on new RFID sensing

technologies that enable us to track and trace

cold chain products and shipments.

Meeting the challenges of supply chain regulationsNGP speaks to a panel of experts about the changes affecting thepharmaceutical cold chain.

ROUNDTABLE

Richard Harrop is the Commercial and Technical

Manager of SCA Cool Logistics and has been involved in

the temperature control packaging industry for six years,

initially in packaging design and then moving into the

commercial field.

Qualified in structural packaging design, Harrop

previously worked as a technical designer for the FMCG

sector before moving into the world of temperature

control packaging where he has worked predominately

within packaging technology.

He has developed and implemented several

successful temperature control solutions for many of the

world’s leading pharmaceutical corporations.

“The interest in creating more robustand effective cold chain solutions hasgrown dramatically” Richard Harrop

COLD CHAIN RT:13sept 08/04/2009 13:37 Page 83


As for monitoring, shipping and packaging technologies are evolving

to offer better thermal protection and performance and to conform to lo-

gistic needs. New conditioning and insulating materials (VIP, polyurethane,

phase change materials) are introduced while reusable temperature-con-

trolled containers are proposed for international shipments. Another im-

portant tool to be developed resides in temperature-controlled

transportation modes (e.g., temperature-controlled ground trailers).

RH. Over recent years the interest in creating more robust and effective cold

chain solutions has grown dramatically. Even without the pressure of regula-

tions, companies seem to have even greater desire to ensure product integri-

ty. However, we still come back to the debate of performance versus cost.

At SCA Cool Logistics we have dedicated resources to exploring the

possibilities of new cold chain solutions and by working closely with all our

industry partners we have been able to develop solutions that meet both

performance and cost requirements.

Today our pharmaceutical partners can select solutions that come ready-

qualified against real-world temperature data, offer controlled cooling and

heating without batteries or preconditioning, hold loads from one litre up to

800 litres and beyond and last for a single shipment or can be reused. They

can also be returned to us for cleaning and can reach durations exceeding 120

hours, regardless of ambient conditions, and are thermostatically controlled.

NGP. How do you see the pharmaceutical supply chain developing in the

future?

RH. Green solutions that fulfil a company’s corporate social responsibility

whilst addressing the need for maximising cost-effectiveness – these are the

systems of tomorrow. Environmental accountability is already bringing con-

siderations regarding recyclability, carbon emissions and energy cost. Cold

chain is one part that can be re-evaluated from a green standpoint.

Green solutions already exist, but what must be considered is how they

are implemented. The green credentials of a solution must be measured

alongside how that solution is used. Will components need to be condi-

tioned within refrigerators or freezers? Are suitable facilities available to

break down the biodegradable container? How many miles does the

reusable system need to travel before it returns to its point of origin?

If we look at two different products, ZeoCool and GREENBOX, we can

see that both have the possibility to solve to green issues, but in very dif-

ferent ways.

The ZeoCool system uses the process of evaporative cooling which re-

moves the requirement to pre-condition components; this is an environ-

mental benefit considering that Europe’s refrigerators and freezers account

for 62 million tonnes of carbon dioxide emissions every year.

ZeoCool offers reduced total system payload, which in turn reduces

the transport or fuel consideration; simpler packing process, which means

reductions in occupied packing space and man-hours; and no requirement

for costly and energy-hungry refrigerated transport.

GREENBOX is a completely sustainable thermal packaging system, cre-

ated with 100 percent recyclable, organic-based, non-toxic and some fully

biodegradable components. The resilient nature of GREENBOX means cus-

tomers can use one box up to 50 times. Reclamation centres gather used

GREENBOXes and inspect, clean and re-certify them for re-use.

GREENBOX’s innovative materials are 100 percent recyclable. When

the hard plastic outer and Thermal-Lok insulating panels reach the end of

their lives they are ground down and made into new shells and panels. In

addition, GREENBOX features biodegradable, non-petroleum, non-toxic

phase change materials. Customers can save up to 65 percent on distribu-

tion-related expenses due to GREENBOX’s unique, reusable design.

Because GREENBOX maintains temperature for up to five days; customers

can ship road freight – even on Fridays – resulting in up to 65 percent re-

duction in shipping and distribution costs.

JB. As for the drug development side with GLPs, the manufacturing side with

its GMPs, and the clinical trial side with the GCPs, the pharmaceutical supply

chain side is going to be significantly impacted with good storage and distri-

bution practices to ensure the highest levels of security and

safety for the drug products going throughout the supply

chain, from the manufacturing facilities handoff up to the

final end-users (patients).

Cold chain compliance and anti-counterfeiting are cer-

tainly the two major pillars in making the supply chain

more secure and safe. As a consequence, a great regula-

tory emphasis will be put on these two aspects, thus lead-

ing to more generalised good storage and distribution

practices in the pharmaceutical supply chain.

In the near future, we will probably see a more spe-

cialised pharmaceutical supply chain, meaning a supply

chain where stakeholders such as wholesalers or trans-

porters will be more focused on providing services and

quality that fulfil the new pharmaceutical supply chain re-

quirements. n

Jean Bédard is Chief Executive Officer

of Alternatives Technologie Pharma Inc.

He has led the company and its

impressive team of cold chain and

track and trace management experts

since 2003, and has managed more

than 100 cold chain compliance

programs in the life sciences and

healthcare sectors. He holds an MBA in

Bio-industry Management.

“An optimal pharmaceutical cold chainshould ultimately provide compliancebut limit the additional distributioncosts” Jean Bédard

COLD CHAIN RT:13sept 08/04/2009 14:44 Page 84

Alternatives.indd 1 8/4/09 13:08:27


FEATURE

SLAOUI ED P86-89.indd 86 8/4/09 13:50:01


be pursuing. One of the participants said at the end, ‘This is amazing

because it’s such common sense. It’s not sexy and it’s not crazy, but

it’s so pragmatic that we believe in it.’”

Before he joined GSK 17 years ago, Slaoui’s previous career was

in academia, and he is acutely aware of the differences between the

two. “In academia, partial success is still success,” he says. “You

can publish a paper in one of the great journals – Nature, let’s say,

or Science – and even if your paper is 95 percent right and five per-

cent wrong, it will still be considered a success. In pharmaceuticals,

either you’re 100 percent right and you have a medicine, or you’re one

percent wrong, and there’s no medicine. This makes a dramatic differ-

ence, because if your medicine has a safety problem, you cannot give

it to a patient, even if in 99 percent of its features, it’s fine. That raises

the bar so much higher.”

In industry, no matter how bright you are, a host of other factors

need to fall into place before science leads to a treatment that can be

given to patients. Slaoui points out that this makes you more prag-

matic, and more wary of trends. In academia, by contrast, research-

ers will often publish numerous papers in each new publication that

comes along, even if none of them is particularly transformative.

Another thing Slaoui learned from his time in the ivory tower was

to seek out people with what he calls ‘educated intuition’. “Science

and innovation are a mix, a kind of art that combines deep expertise

and intuition. You can’t put your finger on it – some people have it and

some people don’t. Some people are more often right than wrong, and

others – unfortunately most – are most often wrong and rarely right.”

Meeting the challengesOne of the biggest hurdles Slaoui has had to overcome since

taking on the Chairman’s role in 2006, he says, stemmed somewhat

counter-intuitively from the fact that the performance of GSK’s R&D

was already pretty good. He explains that applying a vision to strongly

As part of a company-wide restructuring that began in

October 2007, GlaxoSmithKline announced last autumn

that it would shed 850 research jobs in Britain and the

US, and earlier this year the company warned that it

might be forced to make further cuts in an effort to cut

costs by €2 billion over two years.

When asked about the job cuts, Moncef Slaoui, GSK’s Chairman

of R&D, says, “It is difficult to tell people who have been working

for you for a long time and doing their best to discover medicines

that now they are going to lose their jobs, because we can’t continue

doing things the same way we used to do them. That in order to stay

at the top, we have to redesign our organisation. It’s a very difficult

message. It definitely impacts the morale of the organisation and

the motivation of those losing their jobs, and also their colleagues

who have to see that happen. It’s one of the big challenges of chang-

ing an organisation.

“Scientists are faithful to their projects and to their science. They

do their best for their projects. It’s not because they fail individually

that they lose their jobs. Globally there may be an element of fail-

ure, or at least of limited success, because we haven’t had enough

blockbusters coming through, but on an individual basis and a small

team basis, it’s very hard. I’m confident that this strategy and these

changes will make us even more successful, but there is still a period

of adjustment – of grieving, if you will.

“We know that we’re making changes that will make us stronger

in four or five years. If we don’t make them now, we’re not going to be

standing when it’s havoc in the industry. But it’s hard to relate that to

an individual who may be losing his or her job today.”

Slaoui’s task must surely be made easier by his own participative

management style. He summarises his style with this anecdote: “A

few months after I became Chairman of R&D, I had a meeting with the

60 most senior R&D leaders to discuss my vision and the strategy we’d

changesMoncef Slaoui has been working hard to restructure GlaxoSmithKline’s R&D organisation in order to ensure the company’s future. But will he succeed in keeping his team on top in these challenging times? Marie Shields investigates.

Ringing the

SLAOUI ED P86-89.indd 87 8/4/09 13:50:01


helm of everything you do and never settle for less. Second, empower

the talent and the people who have the expertise and the depth to do the

work that needs to be done, versus telling them what they need to do.

“It is those who have the depth of expertise in the particular area

of research they’re working on who are best equipped to make the right

decisions,” he says. “This is versus having a few leaders in an office

somewhere telling them what they should do, which is usually wrong.

“But at the same time, we should hold them accountable, because

that’s one of the things we didn’t do well before. Set expectations very

clearly, generate a culture and environment where people feel safe to

make guesses, to have judgments, to make choices and take risks.

We need to remember that this is not an academic centre, and we do

expect them more often than not to succeed.”

Slaoui hopes to achieve this by

creating much smaller units to drive the

engine of R&D. These new units – small

groups of between 30 and 60 individu-

als – will be called discovery perform-

ance units (DPUs). Three-year to

five-year business plans will be judged

by an investment board made up of

venture capitalists, bankers and other

experts, as well as scientists.

The units will have clear delivera-

bles, and the deep scientific expertise

they need to discover medicines, and,

as Slaoui puts it, they will either deliver

or they won’t. “When you’re in such a

situation, you perform better; you have

an opportunity to exert your passion

better. You need to empower people and

give them the time and the resources to

do what they need to do.

“We’re doing several things at

once. First, we looked into the basic

science and asked, ‘Where is fertile

ground for discovery to happen?’ We

didn’t look at the market. We didn’t say,

‘Where are we selling a lot of drugs?’

We said, ‘Where is the raw material for

great discovery to happen?’ And we

identified eight areas. Then we said

to our teams, ‘If those are the areas in which there is fertile ground

to discover, why don’t you use your creativity? Come to us with your

plan, come with a budget request, and then you have a three-year

period to exert your creativity.’”

Slaoui says this new structure has transformed the way the dis-

covery groups are working, because they moved from a culture where

people had a sense of entitlement and never had to answer questions,

with everybody hoping they would deliver something, to a culture

where they have to earn what they have.

“The same principle is being driven across the organisation. We

have much smaller project teams, and individuals work on a single

enhance performance is harder to do with an organisation that is rea-

sonably successful – it’s easier to drive change when you’re obviously

on the verge of disaster.

“From a management and a leadership standpoint, that’s certainly

where most of the challenge stems from, because you have to deliver

a contradictory message between acknowledging and praising the

current successes, and then pushing hard for change.

“Another related challenge is to introduce a different culture into

the organisation and make changes while continuing to deliver. It’s a

bit like fixing the engine of a jumbo jet at 40,000 feet and making sure

it doesn’t crash. That’s fascinating and very interesting.” (And most

people would add, also more than a little dangerous!)

Of course, Slaoui’s job is not just about challenges; there are op-

portunities as well. He is full of praise

for the talent that exists within his

organisation. “It’s extraordinary to see

the amount of talent we have. There are

15,000 people in R&D, and there is such

diversity and richness. One of my main

focus areas is to make sure this talent

is identified and recognised.”

Surviving and thrivingNo one can deny that the pharma-

ceutical industry is facing a time of sig-

nificant change, with patents expiring

and new blockbusters harder to come

by. According to Slaoui, the move to ge-

nerics stems partly from the fact that

payors have realised they can be much

more powerful; that they can use ge-

neric medicine and that they can make

it harder for a new medicine to be paid

for and to justify its value. Regulators

have also substantially raised the bar

in terms of the safety they expect from

novel medicines.

“There will come a time when a

significant number of players in the

industry will disappear and only a few

will remain around the table,” Slaoui

says. “Those who remain will be those

with a strong R&D pipeline and a strong R&D organisation. GSK will

be one of those, because our business model is based on innovation

and the discovery of novel medicines. That’s the name of the game for

those who will survive.

“For this reason, we have no choice but to organise our R&D or-

ganisation for maximum success. And that’s what we’re doing. It’s why

I’m pushing for quite significant and profound changes, despite the

fact that our organisation is already pretty successful. Because pretty

good is not good enough; outstanding is what it’s going to take.”

The changes Slaoui is pushing for go straight to the heart of what

makes an R&D operation a success: first, put the best science at the

Moncef Slaoui is Chairman of Research and

Development at glaxoSmithKline. he is a

member of the Corporate executive team and

the Board of glaxoSmithKline plc. in his previous

position as Senior Vice President, Worldwide

Business Development and external Alliances, he

spearheaded changes in R&D to enhance drug

discovery and accelerate product development.

Previously, in gSK Biologicals, he engineered the

development of a robust vaccines pipeline.

SLAOUI ED P86-89.indd 88 8/4/09 13:50:03


it. We’ve done that twice in the last year. We acquired a company

called Domantis that has a technology that will transform the way we

make antibodies.

We also acquired a company called Sirtris, which works on sir-

tuins, enzymes involved in longevity, diabetes and infl ammation. If

we can crack that nut – and I think the Sirtris people are the best

placed to do it – and make medicines out of sirtuins, they will truly

be transformative.”

Going globalFor historical reasons, most pharma companies have based

their R&D exclusively in the West, between the US and Europe, but

as Slaoui rightly points out, two-thirds of the earth’s population lies

outside of those regions.

With growth in healthcare costs in developed countries already

showing signs of slowing, many pharma companies have developed

a sudden interest in moving into new parts of the world, in terms of

both sales and research. Pfi zer, for example, recently announced that

it will set up a unit focusing on emerging markets, and sanofi -aventis

is pushing into eastern Europe with its purchase of Czech generic-

drug maker Zentiva.

A cynic might say that this move is prompted less by a heartfelt

desire on behalf of these companies to improve health conditions

across the world, and more by the lure of untapped potential profi ts, or

as a way of conducting clinical trials on the cheap. But Slaoui remains

convinced that establishing research bases in these areas can only

have a positive impact on the advancement of scientifi c research.

“Places like China or India or South Korea or even Latin America

have great scientists and great ideas that are often neglected. We

have a strategy to fi nd the talent wherever it is. We opened a big

center in China, not with the intent of sourcing low-cost research, but

to access the best scientists and the best discoverers. Our motto is:

‘We’re going to move from Made in China to Discovered in China.’”

It’s clear that Slaoui is determined to keep GSK’s R&D at the top

of its game, whatever the challenges. And after spending even a rela-

tively short time in his company, you get the feeling that he will most

likely succeed.

project or two and not on 10. In this way, we are re-personalising R&D.

What happened in the last two decades is that we, as an industry,

thought we could industrialise R&D in the same way we industrialised

manufacturing: ask people to be excellent in a very small task and do

it on many different projects.

“But R&D doesn’t work that way. R&D is about insight, it’s about

expertise, it’s about judgment; and that comes from depth of under-

standing and from spending time, a lot of time, in a given area – it’s

about depth and not breadth. Breadth is important in a few places, but

it’s not important that everybody has breadth; it’s very important that

most people have depth in the area they are working on.”

Partnering upSlaoui again stresses the need to open up GSK’s R&D to the out-

side world, because good ideas don’t occur in a vacuum. To this end,

the company is ramping up its partnering efforts.

“Like others, we partner; but in contrast to others, when we part-

ner we don’t tell our partners how they should do things, because

what we value is diversity,” Slaoui explains. “We listen to how they do

it and let them do it. We trust them.”

GSK recently announced two major partnerships with Harvard insti-

tutes, which Slaoui says are aimed at the onset of very basic science, an

almost symbiotic relationship with discoverers and innovators at that

level. This allows the company to do two things: keep its internal sci-

ence cutting edge; and have its own scientists spend time in academia,

and in exchange have university scientists spend time in industry.

“This works well, because they are usually fascinated and come

to understand how valuable and rewarding the work we do in industry

is. And many of them will, I hope, join us as great talent.

“We also have many partnerships with biotech companies here

in Europe, in the US, and farther afi eld in countries like India. We now

have 60 programmes in our pipeline that are completely run by biotech

companies. Recently we signed a deal with a company in Switzerland

for a revolutionary sleep medicine that’s in phase III; and also with

Valiant for a schizophrenia medicine.

“Sometimes when we think there is a transforming platform

technology or approach that will really change medicine, we acquire

WHO PRIORITY DISEASESMoncef Slaoui, Chairman of R&D at glaxoSmithKline, outlines the company’s work on the WhO priority diseases: hiV/AiDS, tuberculosis and malaria.

“We are absolutely committed to fi ghting the diseases of the developing world. i

spent my fi rst 15 years in the pharmaceutical industry in vaccines; i was personally

strongly involved with our malaria vaccine, for instance, and the hiV vaccine.

We have a dedicated pharmaceutical R&D center in tres Cantos, just outside of

Madrid, that’s focused on discovering medicines for malaria and tuberculosis. And

we have substantial public-private partnerships with the gates Foundation, with the

Malaria Vaccine initiative, with Medicines for Malaria, and others.

On the vaccine side, we have signifi cant malaria vaccine programs that are

currently in phase iii trials in Africa; and also programs for tuberculosis and hiV. We

have a strong rotavirus program, having just launched our Rotarix vaccine. A rotavirus

is a virus that causes diarrhea in babies, and between 600,000 and 800,000 babies

die every year in the developing world from rotavirus-induced diarrhoea.”

Aids virus attacking healthy cells.

SLAOUI ED P86-89.indd 89 8/4/09 13:50:06

cause there is simply not enough acetonitrile available to efficiently run

their labs using traditional liquid chromatography technology. As these or-

ganisations evaluate their options, the innovations behind UPLC technolo-

gy provide the best solution to today’s crisis and safeguarding against

future risk.”

Working with its key customers, Waters estimates that replacing tra-

ditional high performance LC (HPLC) with ACQUITY UltraPerformance LC

(UPLC) reduces acetonitrile consumption by up to 95 percent without com-

promising productivity and performance.

The ACQUITY UPLC System allows scientists to perform required analy-

ses, such as quality assurance and quality control tests, using fewer re-

sources than HPLC. Because the system operates with a lower flow rate and

separates samples in less time, UPLC uses significantly less solvent, in-

cluding acetonitrile. The result is the ability to maintain or improve lab pro-

ductivity and performance, with reduced costs and reduced external

pressures associated with the current acetonitrile shortage.

With the acetonitrile shortage expected to last the better part of 2009,

current UPLC users are experiencing a competitive advantage. UPLC pro-

vides a short-term solution to the crisis while also offering long-term secu-

rity, a means to demonstrate environmental responsibility, and increased

productivity many times over. n

In general, a scientist in a pharmaceu-

tical laboratory would not expect a

major sporting event, a hurricane, and

the struggling automobile industry to

impact his work. Yet these seemingly

unrelated events are providing a significant

challenge to scientists who rely on liquid

chromatography.

Why is this so important to the pharma-

ceutical business? Every pharmaceutical lab-

oratory has them – liquid chromatography

systems are an indispensable tool in con-

ducting effective R&D and product release

testing. Typically, the solvents that are used

with these systems come with a considerable

operational cost – thousands of litres that

add up to hundreds of thousands of euros

per year. One of the most used solvents in the

laboratory is known as acetonitrile.

Ahead of the games in Beijing, one of

the world’s largest acetonitrile manufactur-

ing plants was shut down to reduce area air

pollution. To date, that plant has not been

restarted. Hurricane Ike forced the closure of a second large plant in Texas.

And finally, access to acetonitrile as a production byproduct of a polymer

used in automobiles is tight, as consumer demand for cars lags.

The impact on analytical laboratories is being felt across all indus-

tries that depend on liquid chromatography. Suppliers have notified

clients they will be unable to fill all acetonitrile orders. Laboratories at

leading companies are searching for solutions to maintain their mission-

critical laboratory productivity. This situation is prompting companies to

quickly evaluate their current liquid chromatography systems and their

associated acetonitrile usage requirements to ensure uninterrupted lab-

oratory operations.

“The time for ACQUITY UPLC System adoption has never been clear-

er,” says Rohit Khanna, Vice President of Global Marketing for the Waters

Division of Waters Corporation. “Laboratory-dependent businesses and

government agencies around the world are facing difficult decisions be-


Storm warning

ASK THE EXPERT

For more information, visit www.waters.com/green.

“The impact on analyticallaboratories is being felt across

all industries”

How the Beijing Olympics, Hurricane Ike and the slowed auto industry are causingheadaches for pharmaceutical scientists.

WATERS ATE:co proof 08/04/2009 14:43 Page 90

Waters1.indd 1 8/4/09 13:07:19

Much of the work that Kotzin and his team carry out in medical sciences

is related to biomarkers. “Our group is composed of combined groups from

research and clinical development,” he points out. “For example, we have

a molecular sciences group that’s devoted to molecular biomarkers, we

have an imaging sciences group that’s devoted to advanced imaging bio-

markers, we have a clinical immunology group that includes a group fo-

cused on cellular biomarkers, and we have the development group. It’s a

very biomarker-oriented function here in medical sciences.”

The goal of Kotzin’s studies is to maximise the information he gets from

early clinical trials. Because the therapeutics are being introduced into a

small number of people, it’s important to get as much information as pos-

sible, which is accomplished by dividing biomarkers up into different cate-

gories. “One of our biomarker-directed questions is, when we introduce a

therapeutic into people, did we hit the target? Did we do what we really

Brian Kotzin is the first to admit that his background is a lit-

tle unusual compared to that of his senior colleagues at

Amgen. “I was at the University of Colorado, at The National

Jewish Centre for Immunology, now called the National

Jewish Medical and Research Centre,” he explains. “I was a

physician scientist and did the usual things they do in aca-

demic medicine. I’m a clinician, a rheumatologist, so I saw patients within

the internal medicine and rheumatology setting. I also ran a laboratory, and

I did a lot of teaching.”

Kotzin’s appointments were in medicine, immunology and genetics.

Over 25 years, he headed clinical immunology and rheumatology groups,

as well as a centre of excellence devoted to autoimmune diseases. As this

research developed, he realised the next step would be to develop it into a

therapeutic, which can be hard to do in an academic setting.


BIOMARKERS

Brian Kotzin, Vice President of Medical Sciences at Amgen, tells Marie Shieldshow biomarkers help translate basic science into medicine.

translational

Leapingahead in

medicine

Kotzin ED:13sept 8/4/09 14:43 Page 92

thought we did?” says Kotzin. “Thenwe ask, didwe cover the biochemical

pathway?Were the intracellular signaling pathways inhibited to the full ex-

tent that we thought they were?

“Then we have biomarkers that are a measure of clinical activity. We

can’t do large clinical studieswhereweuse a clinical endpoint, like survival

– we don’t do that in these early clinical trials. Instead, we try to incorpo-

rate biomarkers that will give us a clue as to whether we have a clinical ef-

fect. For example, if it’s a cancer therapeutic, did we shrink the tumor, or

were the tumor cells killed within the tumor?

“The last group of biomarkers that we try to get insight into are those

that might predict who’s going to respond to a therapeutic. We call them

stratification biomarkers or predictive biomarkers.”

One other important category of biomarker is related to safety. Most

therapeutics at this early stage do not work out: they fail for one reason or

another, and the importance of being able to make a strong conclusion re-

garding that failedmolecule is critical.The teamneeds toknow, if it hasa fail-

ure, is it because the target that they chose was not the right target, or is it

because the therapeutic they developedwasn’t the right therapeutic?

“By knowing whether you hit the target and whether you covered the

pathway, this gives you essential information you need to know whether

the approach is going to beuseful. If therewas noeffect on thedisease,we

don’t want to develop another molecule to hit that particular target. And

you only discover that by having those biomarkers that tell you whether

you did hit the target.

“We may have a molecule, for example, where we have a safety con-

cern. The question is, didweuse it at a dose thatwasmuchhigher thanwe

need, or was it the right dose, or was it not enough? By having the infor-

mation that says yes,wedid hit the target, orwedidn’t even reach thedose

that we needed to hit the target, this will tell us what the next step is in

terms of trying to develop something for the same pathway.”

PredictionsKotzin andhis colleagueshavehad successes inwhich they haveused

biomarkers that predict the clinical effect. For example, instead of going to

a several hundred-patient study that measures hemoglobin A1c for a dia-

betes drug, he has been able tomeasure the effect in a study with only 20

to 30 subjects, using biomarkers. “Wewere able to come to the conclusion

that the drug really didn’twork, and itwasn’t going towork even ifwe stud-

iedmanymore subjects. That’s a great help. It’smuch faster, andweexpose

fewer people to the therapeutic.

“Weget tomakeour conclusion earlier and faster, andweget tomove

on to othermoleculeswithin the portfolio.Within our cancer therapeutics,

we’ve been able to see tumor shrinkage, we’ve been able to measure the

death of cancer cells within the tumor. That’s really important early infor-

mation that says, ‘Yes, this potentially important cancer therapeutic should

bemoved forward, so thatwedo larger studies andmeasure clinical effects

like progression-free survival and overall survival.’”

Kotzin’s definition of translationalmedicine is very closely tied tomed-

ical sciences. He defines it as the interface between research and clin-

ical development. “When I think of the term ‘translational medicine’, I

think of discovery research: animal studies, basic research at the bench.

And then you move that science into clinical trials, trying to understand

whether there’s going to be a benefit in patients. Translational medicine

is that interface, moving it all forward. And it’s all the science that goes

along with that transition.

“It’s this interface of translating thediscoveries youhave – either in cell

culture or in animals – into humandisease. It’s a very difficult thingbecause

the animal models are frequently not predictive of the human disease.


“All of the science we do here is centredaround how we take what we’ve learned inthe animal studies, or in the preclinicalstudies, and move that into humans, so thatwe can truly understand things”


Certainly one way to improve safety is not to inject all study partici-

pants at the same time at the beginning of the study. Instead, one individ-

ual is exposed to a very low dose, and if that causes no ill effects,

researchers can feel more comfortable about exposing several people to

that therapeutic. The dose can be gradually increased after the first sub-

jects have been safely dosed.

Animal studies are often carried out to provide enough information to

ensure that the compoundwill not causeproblems in people. But as Kotzin

explains, sometimes a negative result in animalswill not necessarily trans-

late into humans.

“This is challenging because we’re sometimes faced with situations

wherewe have an animal toxicitywhichwe don’t believewill translate into

humans.When this happens, we have to figure out how to get beyond the

problem and convince ourselves, investi-

gators and regulators that this shouldn’t

prevent us from going into people, espe-

cially when the illness is grievous, such as

a cancer therapeutic.”

DevelopmentsThere has been an explosion in basic

science, which has had a big impact in

translational medicine, because there are

so many new ideas and new discoveries

that can now be translated to humans. As

Kotzin says, “The whole understanding of

disease has been an important develop-

ment for translationalmedicine.That’s very

dependent on new research technologies,

which give us the ability to develop new

molecular techniques.

“There have been tremendous ad-

vances in proteomics, and in how to mea-

sure intracellular pathways by measuring

proteins that get phosphorylated. And

there’s beena tremendous explosion in ge-

netics in terms of the tools you can use.

Now, you can screen thewhole genome for

polymorphisms thatmight affectwhether your therapeuticwill work in cer-

tain people and not others.

“There are also new sequencingmachines that sequence at an unbe-

lievable rate, something that nobody even a few years ago could believe

that we could do. And that’s added to the information we can add in our

early clinical trials. We can sample tumors, for example, and do unbeliev-

able amounts of sequencing of all the different genes that have changed in

those tumor cells.”

“We’ve also become more innovative in our clinical trials. We’re no

longer fixed into the same type of experiments. We’re doing clinical trials

where we learn as we go, right in the same clinical trial. We’ve combined

different, single dose andmultiple doses in the same trial. Again, ensuring

safety at the same timewe go, but increasing the information that we get,

as well as the speed that we can move in terms of getting the information

that we need.”�

“We’re measuring pathways in animals, and we have to measure the

samepathways in humans. All of the sciencewedohere is centred around

howwe takewhat we’ve learned in the animal studies, or in the preclinical

studies, and move that into humans, so that we can truly understand

things. And it’smuchmore difficult. In an animal study, you can look at the

whole animal to see whether your drug has had an effect. But in human

studies, you may be limited to sampling blood. You have to be very inge-

nious, very innovative in how you get the information. This whole process

is translational medicine.

ApprovalHowdifficult is it to get approval to carry out these early clinical trials?

Kotzin explains that there are extensive regulations that govern this

process. This is to ensure the safety of the

participants when investigating a thera-

peutic that has never beenput into people

before. Patient safety is paramount.

Because of this, there are many regula-

tions regarding what doses you can start

at and what types of animal preclinical

studies you need in order to know that the

therapeutic is likely to be safe.

These regulations have becomemuch

morestringent in the last fewyears,because

of thetragicoutcomeofTeGenero’sTGN1412

study. TGN1412was a therapeutic that was

designed to target T-cells, but instead of in-

ducing the lymphocytes to not respond, it

triggered them to releasemassive amounts

of cytokines.Oneof the study’smajor flaws

was in thedecision to inject all of thepartic-

ipants at the same time, and all who re-

ceived the activedrugbecameseriously ill.

“That catastrophe understandably

colored early development around the

world,” says Kotzin. “Although at Amgen

we’re very stringent and we like to believe

wewouldnot havedoneanything like that,

everyone became afraid of approving new therapeutics, especially biolog-

ics. Now nearly every time we apply to put a new biologic into people, the

specter of the TeGenero catastrophe comes up. This has resulted in new

regulations being put into place around the globe that delay the process.

“I remember traveling to theMHRAandpresenting amolecule thatwas

an immunologic molecule, and we arrived shortly after the TeGenero

tragedy. The regulatory group in the UK just didn’t know what to do. They

were faced with the results of this tragedy and how to prevent something

like that from ever happening again.

“It became almost an irrational fear of new clinical trials, and we had

to get beyond that using really strong science to convince people that our

trials are safe. We’ve been trying to convince regulatory groups – for ex-

ample, when we come forward with a new therapeutic – that the science

predicts that thiswill be safe.We’ve been successful, but sometimes there

has been an inordinate delay related to the fact that people are still afraid.”


Brian Kotzin joined

Amgen in 2004, as

Vice President and

Head, Global

Inflammation

Development,

before transitioning

to his current

position as Vice

President, Medical Sciences. He leads this

integrated function comprised of Early

Clinical Development, Molecular Sciences,

Imaging Sciences, Clinical Immunology, and

Computational Biology. Medical Sciences is

responsible for the planning and execution

of early-phase clinical development as well

as the discovery and implementation of

pharmacodynamic biomarkers in clinical

studies at Amgen.


Anabase.indd 82 8/4/09 13:09:35


EXECUTIVE INTERVIEW

Tools for screening and validationTaqman SNP Genotyping Assays, developed by Applied Biosystems, are a state-of-the-art technology for screening and validation of polymorphisms. Recently Applied Biosystems introduced two new products to complement this offering; the high throughput Taqman Open Array Genotyping System and Taqman Copy Number Assays.

NGP. What is genotyping, and what are its applications in disease

prevention?

Xavier Cristina. Genotyping refers to the process of determining an

individual’s genotype. SNPs are currently the most commonly studied

genetic variation, although microsatellites and STRs have been widely

used in the past and new markers, such as CNV (copy number vari-

ants), are of increasing interest to researchers. The ultimate goal of

this analysis is to fi nd links between a disease (or group of diseases)

and its genetic background. Advances in the technologies available

have allowed researchers to analyse thousands, or even millions, of

SNPs to discover disease-associated genes, and validate results by

replicating studies with larger cohorts of samples using technologies

like Taqman SNP Genotyping Assays.

NGP. Why is genotyping important in clinical research?

XC. Clinical studies aim to discover panels of SNPs or other genetic

markers that can be used in the prevention, prognosis or treatment

decision of complex diseases. These biomarker panels often include

polymorphisms of high clinical relevance, such as those located in

DME (drug metabolising enzyme) genes. As they affect an individual’s

drug responses, genes that code for the DMEs represent one of the

most important classes of genetic variation in drug development

studies. Analysis of SNPs in these genes is very important during the

drug development phase, as this can indicate how

a patient will metabolise the candidate drug. As a

simple example, grouping patients into low, medium

or high metabolisers can help researchers adjust

dosage to improve drug effi ciency. This strategy is

called pharmacogenetics, and is important for the

future of personalised medicine. Applied Biosystems’

DME Taqman SNP Genotyping Assays incorporate over

2600 high value polymorphisms located in regulatory

elements and coding regions of 220 drug metabolism

and transporter genes. Later this year, users will be

able to customise the Taqman Array Platform (micro-

fl uidic card) for DME genotyping research, allowing simultaneous

analysis of eight samples for up to 96 SNPs.

NGP. What benefi ts does Applied Biosystems’ new high throughput

genotyping system provide to life scientists? How does it differ from

similar systems?

XC. The recently launched Taqman OpenArray Genotyping System com-

bines Taqman SNP Genotyping Assays with the massively parallel Ope-

nArray technology, allowing researchers to analyse more than 90,000

genotypes per day at low cost and with a simple laboratory set-up. The

nanoliter sample volumes required for the Taqman technology permit a

very simple workfl ow, with the excellent call rates critical to the success

of this kind of research. Unlike other technologies, the Taqman OpenAr-

ray Genotyping System supports full analysis from DNA to results, with

customers able to choose from more than 4.5 million pre-designed

assays, or custom designed assays to suit any gene for any species.

These assays are ready to run on OpenArray, with no hidden costs

coming from oligo fees or third party consumables that may hamper

the workfl ow. With this system, Applied Biosystems delivers market-

leading performance, support, training and service to ensure customer

satisfaction for high throughput genotyping applications.

NGP. What do you believe will be the most important developments in

genotyping over the next few years?

XC. Next generation sequencing is an exciting new technology

being used by laboratories conducting disease-association studies.

Re-sequencing of a large number of individuals will bring more ge-

netic markers (SNPs and CNVs), so there will be increasing demand

for simple yet effective technologies for validation and commerciali-

sation of biomarker panels. To complement the SNP assays portfolio,

Applied Biosystems has recently launched the Taqman Copy Number

Assays. This solution is comprised of more than 1.6 million pre-

designed assays, as well as a custom design pipeline, with specifi c

analysis software to provide a platform for all researchers interested

in CNV screening and validation of array CGH.

Xavier Cristina is the European Business

Development Manager for the Molecular

Biology Systems Division at Applied

Biosystems, part of Life Technologies.

After completing a PhD in Microbiology and

Biochemistry, he joined Applied Biosystems

in 2000 and has developed his career in

various positions in the company.

Applied Biosystems.indd 96 8/4/09 13:55:42

KDM2.indd 1 8/4/09 13:18:47

Compliance is typically considered to en-

sure inclusion of process steps in work-

flows and SOPs to address 21 CFR Part 11,

GCP, GAMP or other regulatory requirements.

The missing piece for sustainable compliance is

the automation of business processes (SOPs es-

sentially) in a controlled way – a way that ensures

that the appropriate steps, rules and other com-

pliance factors are clearly documented and en-

forced during process execution. In addition, life

sciences companies must have a proactive, sys-

tematicwayofcontrollingaccess, trackingactions

and capturing an accurate, ‘on demand’audit trail

of both human and system actions. Effective de-

ployment of process modelling and business

process management (BPM) software has helped

a number of the world’s largest life sciences com-

panies successfully accomplish this – on a rela-

tively short timeline and for a reasonable cost.

The first step is to model mission-critical

processes, analyse them, and define standard

global processes with regional differences where

required by regulations. The secret to success at

this stage is to make the models as robust and all

encompassing as possible. Traditional, static,

‘wallpaper’ process models will not suffice.

ConnectingThe foundations for SOP automation will be

laid within the models. To establish this founda-

tion effectively, the models must connect togeth-

er with a defined taxonomy to ensure complete

process paths with no orphan processes or seg-

ments, and be easily consumable across the en-

terprise for sharing, annotating and

collaborating. They must also natively include as-

sociated documents and content – standard op-

erating procedures (SOPs), forms, work

instructions, etc – and be accessible in role-spe-

cific views for user training and guidance.

Building from these comprehensive mod-

els, BPM software can then be applied to trans-

form the models into live operating processes.

BPM is being used by top global pharmaceutical

organisations to implement processes in new

and more effective ways. This is enabled by the

ability to take process models and associated re-

quirements elements directly from the model-

ling tool into the BPM automation engine, which

significantly shortens process design and de-

ployment timelines and ensures documentation

consistency. Process execution elements are

added within BPM – user forms, dashboards, in-

tegration services, role hierarchies and more –

bringing the process to life. The direct linkage

from the process models, SOPs and other docu-

mentation to process execution is how active

process compliance is achieved.

Executing processes on a BPM software

platform implicitly means that users are required

to follow the prescribed flow and make deci-

sions only as permitted by their defined role and

authority in the organisation. All user actions

and process data are captured in real time, giv-

ing management greater visibility into opera-

tions. Further, all of the process information

captured in the BPM software exports into stan-

dard documentation formats to serve as validat-

ed evidence of process compliance.

SoftwareFor life sciences companies traditionally de-

pendent on SOP documents, deviations and

waivers, leveraging an integrated process analy-

sis and BPM software suite provides process dis-

cipline and compliance that delivers real value in

a number of ways. These include reduced SOP

deviations through enforced process adherence;

reduced or eliminated SOP waiver forms; and

real-time process visibility and information cap-

ture to monitor process compliance. They also

include readily available process documentation

and having the ability to easily update process-

es and implement process changes when need-

ed. The overall reduction of reliance on paper

makes the process greener and portable across

the globe and produces more efficient and ef-

fective business operations.

The events in the global economy over

the past year prove that a lackadaisical ap-

proach to process visibility and control can be

disastrous. The solution exists today to help

life sciences companies achieve and maintain

active process compliance across the enter-

prise – and provide the foundation for a bright

and prosperous future. Metastorm is an en-

terprise software company focused on deliv-

ering business improvements through

effective business architecture, process

analysis and process automation technology.

Due to the many process challenges life sci-

ences companies face – from safety to innova-

tion to time-to-market – our software has

proven to be a very valuable asset. �

Automating life sciences SOPs


Life sciences organisations often overlook active process compliance as partof process initiatives.

Ethan Smith has extensive experience in

business process consulting in life sciences.

He has driven process initiatives across

research and development, sales

operations, incentive compensation,

physician spend management and

compliance. He has delivered well over a

dozen BPMS implementations in the

industry and developed enterprise BPM

strategies and centres of excellence. Smith

currently serves as the Director of Life

Sciences Solutions for Metastorm.

ASK THE EXPERT

Metastorm ATE:13sept 8/4/09 13:57 Page 98

Metastorm.indd 1 8/4/09 13:19:52


Improving data quality and streamlin-

ing operations, while decreasing costs

and drug development time, are on-

going goals for pharmaceutical labs.

Significant investments have been made

in UHPLC platforms and mass spectrom-

etry technology to improve productivity.

However, these assets cannot perform op-

timally if chromatographic separations are

not adequate, as is often the case when

attempting to separate drug compounds on

C18 columns. Phenyl columns offer some

aromatic selectivity, but little hydrophobic

retention. Restek’s unique Biphenyl phase

incorporates a novel end-to-end bonding

that is a significant advance in phenyl col-

umns, providing both high hydrophobic re-

tention and aromatic selectivity in a single

column. These attributes maximise versa-

tility and can be used to increase utilisation

and return on investment for UHPLC and LC/

MS systems.

Improve UHPLC performance with proper column choice

UHPLC in the pharmaceutical laboratory

is commonly used to accelerate development

of methods, which are then scaled to a con-

ventional HPLC-based platform for routine

analysis. This common application of UHPLC

makes the need for selective column phases

just as great in UHPLC as in HPLC. While

UHPLC does produce significant gains in ef-

ficiency and speed, the gain is not so extreme

that the stationary phase is inconsequential;

selectivity is still the driving force behind

separations, as it affects resolution to the

greatest mathematical degree. Higher qual-

ity separations, not just faster separations,

are needed by pharmaceutical laboratories.

To fully realise the potential of UHPLC, labs

need to consider both speed and selectivity.

Biphenyl columns offer both C18-like and

phenyl-like selectivity (easily controlled with

mobile phase choice), and, when used in con-

junction with UHPLC, they can provide much

faster and more effective resolution for drug

substances and impurities.

Maximise use of your LC/MS asset

Novel Biphenyl column chemistry also

can increase return on investment for mass

spectrometers. Here, the benefit is not so

much selectivity (the mass spectrometer

can provide deconvolution) as it is increased

retention. Since Biphenyl columns strongly

retain analytes, highly organic mobile

phases are used to elute the compounds

into the mass spectrometer. This leads to

higher sensitivities in electrospray ionisa-

tion as desolvation of the mobile phase

becomes more efficient, ultimately giving

better ionisation. Another advantage of

using highly retentive stationary phases,

like Biphenyl for mass spectrometry is

eliminating unwanted adduct formation or

charge competition from matrix interfer-

ences that are less retained by the column.

Commonly used C18 columns are excellent

for retaining hydrophobic solutes, but

fail when retaining hydrophilic solutes. In

contrast, Biphenyl columns are capable of

retaining both hydrophilic and hydrophobic

aromatics better than conventional C18 and

phenyl phases, resulting in a wider range of

applications and better mass spectrometer

asset utilisation.

Alternative and easily controlled se-

lectivities give Biphenyl columns a unique

versatility, leading to a higher return on in-

vestment and better utilisation of instrument

resources. Since Biphenyl columns offer both

aromatic selectivity and hydrophobic reten-

tion, orthoganol separations can be achieved

with simple mobile phase changes. This

‘tunable’ selectivity gives markedly better

separations for molecules differing in degree

of unsaturation, double bond position, or

electron withdrawing groups. Improved MS

sensitivity is also possible, due to the use

of more organic mobile phases. Biphenyl

columns are available on a variety of silicas,

including a fully scalable line accommodat-

ing UHPLC-HPLC method transfer. Versatile

Biphenyl columns can improve utilisation of

UHPLC and LC/MS resources and are an ideal

tool for method development.n

ASK THE EXPERT

Increase ROI with novel column chemistry

Richard Lake is the Pharmaceutical

Market Development Manager

at Restek Corporation. He is

responsible for overseeing the

development and application of

chromatographic products for the

pharmaceutical industry. He has

over 13 years experience including

positions as lead chemist, LC and

GC method developer, stability

manager, and study director for

pharmaceutical studies.

“Alternative and easily controlled selectivities give

Biphenyl columns a unique versatility”

By Richard Lake

Restek.indd 100 8/4/09 13:46:29

restek.indd 1 8/4/09 13:22:42


Building relationships

around the globeWyeth’s Joan Shen examines the benefi ts of choosing

international locations for clinical trials.

As Medical Director for neuroscience at Wyeth, Joan Shen is used to work-

ing with people from around the world. She is currently focused on con-

ducting global trials for phase II and phase III, for indications including

schizophrenia, bipolar and depression. “My day-to-day job is to work with

clinical scientists to generate protocols and select the countries, and then

conduct trials and analyse the data to get the results,” she explains. “We

coordinate with the other project management functions and propose to upper manage-

ment what we think the best strategy is to move forward with a certain compound.”

Clinical trials are becoming ever more complex, with larger patient groups, and are

often conducted internationally, meaning it can be challenging to conduct trials in a

timely and cost-effective manner. Shen points out that the main things to keep in mind

are speed and quality. “Wyeth has been back and forth in terms of what are the best

methods, and in the last two years we have generated a group called country visibility.

We call it the site management group, as distinct from the study team.

“This group helps us to facilitate the selection of countries and the visibility of stud-

ies company-wide. Once we get approval to move forward with a study and get a budget

in place, we have a study mobilisation meeting with all the functions, including the man-

agement group. That needs to be planned six to nine months ahead of time.

“We generate a synopsis of the study and a questionnaire about the site country’s

visibility, and the special site management group takes them and sends them all over the

world, wherever Wyeth has attachments. They collect the feedback on what is required,

such as the number of patients or disease areas or placebos needed. They then give feed-

back to us and based on that information we select which site we want to go to. That helps

us get collective information and from that we can generate a database based on site

CLINICAL TRIALS

joan shen.indd 102 8/4/09 13:49:21


requirements for most of those regions ask for the particular patient

population from their region. If early on you know you’re targeting those

populations, it makes life easier when you submit to the FDA and to get

market approval. That’s one of the incentives we are moving towards

these global studies.”

Different regulationsRegulations also vary between countries. Shen has found that

India has an excellent regulatory environment. She anticipates a

three to four month approval period there, because the board of

health is relatively easy to work with. “As long as the ethics group

committee agrees with your proposal, you have no problem. This is

not always the case in other countries.

“In Japan, the PMDA is really strict on what they do. Usually they

ask for phase I data before you can move forward, and the other

problem is slow enrollment, but I think the PMDA is now much more

open-minded. They like open dialogue, so the study team has to put

a lot of effort in to support this. We send our experts over there to

talk to them so they have a whole picture of the safety data, and then

they feel comfortable.

“Right now we anticipate novel chemicals getting approval in eight

or nine months, but again this is a regulatory bottleneck. There’s a huge

potential for markets so we usually don’t give up; we’ll keep trying.”

According to Shen, South Africa also has an excellent regulatory

environment, with an approximate three to fi ve month approval period.

The downside is that it’s on the other side of the world, and to travel

there is diffi cult. “It depends on disease areas. Some of the diseases

are much easier to conduct studies in; some are not; it depends on the

availability of the treatment.

performance in the past, and the regulatory

environment changes.”

Shen points out that the downside of

this is that the quality of the site may not

get as much consideration as it should. She

believes a joint effort works best, between

country visibility groups and the study team

to look into the specifi c capacity of and the

quality of the sites.

International benefi tsShen leads trials in various sites around

the globe, including China, India, Japan,

South Africa and Eastern Europe. While big

pharma companies have been criticised for

choosing these locations based on cost, and

have been accused of ‘taking advantage’

of unsophisticated local populations, Shen

explains that there are legitimate reasons to

site trials abroad.

“We need a diversifi ed patient popula-

tion, which is very important for development

if you are marketing all over the world; and

secondly the trend toward placebo results

and so-called failed trials is increasing in the US. That means we are

getting ‘fake’ patients or treatment resistant patients, or patients who

have been recycled from other studies. We can’t see the true treatment

facts if we repeatedly use the same population, and the commercial

treatment sites who try their best to get patients don’t necessarily pro-

vide the best quality.

“We can lower the placebo rates because we know going to coun-

tries like China, India and South Africa you see many more patients who

have not been exposed to clinical trials and to second generations of

certain drugs; for example, psychotics. It then becomes much easier to

see the true effect.

“I remember one of the studies I was involved with in the US in

which we had no effect on the treatment between the two popula-

tions, but we were able to identify the drug effects with Russian sub-

jects. Overall, it was statistically signifi cant, but if you put aside the

Russian patients you didn’t see it. We were able to discuss this with

the FDA and they agreed with our data. The quality of the data speaks

for itself.”

Of course there are disadvantages to international clinical trials.

One of these, as Shen points out, is that some countries require a

much longer time for regulatory approval. “Some countries are quite

fast, while others are very slow. For example, in China in my experi-

ence once you hit the ‘yes, go’, they are able to really move very, very

quickly. In one of the trials I remember in China, they had already fi n-

ished their enrollment but some other countries were so behind that

we asked China, ‘Can you increase the number of patients to fi nish up

all the studies?’ And they did.”

While Shen prefers to go where there is a bigger potential patient

population. “It’s also the market that we’re looking for. The regulatory

Joan Huaqiong Shen

is Medical Director for

neuroscience at Wyeth. She

began her career as a surgeon,

then obtained a PhD and

training in psychiatry. Shen,

who is board-certifi ed in

psychiatry and eligible in clinical

pharmacology, worked for Eli

Lilly before moving to Wyeth in

2005. She leads clinical trials

to China, India, Japan, South

Africa and Eastern Europe.

joan shen.indd 103 8/4/09 13:49:22


pany is doing. I’ve currently initiated this in China, to try to build

long-term relationships with the key opinion leaders there, as well

as the PIs. To better understand their needs we help to train them.

We help them to obtain the disease knowledge to get the best qual-

ity from the clinical trials.

“Those regions are looking for collaboration. They don’t want to

be treated just as a site: give us patients and we’re done. They want to

be treated with mutual respect and also have long-term collaborations.

They also like to have a co-author on the publication.”

In Shen’s view, it’s about building a long-term relationship. “Many

big pharma companies have been operating in countries like China for a

long time, so they already have good reputations there. This can mean

that when they have four or fi ve trials they prioritise ours, which can be

signifi cant factor in enrollment rates. As a big company, what you need

to do is build up a relationship with local government. If you get their

support, things are much easier.

“We also have good relationships with India and many other coun-

tries, and this does make a huge difference. We as a study team go to

visit the sites. We exchange scientifi c information and then make our-

selves available if they have problems or questions. Once you start the

trial, you can’t just throw that out and leave them on their own.

“In those regions they are still learning to ensure study quality.

For this reason, I would strongly suggest providing a refresher or other

visits to rejuvenate the study’s energy and to refresh the memory of

what’s needed, otherwise quality could deteriorate throughout the

study, especially if it’s long. That’s how I feel about the energies we

need to put in to help get recruitment as we need it.”

Another important aspect of building relationships with interna-

tional sites is education. As Shen explains, training at sites is very im-

portant, as well as training the company site managers. It’s not a matter

of setting up the trial and leaving them to get on with it. “You can’t just

give it to the region and wait for results. That never works very well.

“We need to educate people, to help them understand that if they

want to have those medications available for the local population, they

need to make sure patients understand that joining studies helps them

and will help others in the future to get medicines early on. That’s also

the selling point for the government when they say, ‘You’re trying to

test our population.’ Then we’ll say, ‘This is the only way we can get

this on the market early so everybody can have this available.’ Those

are the things we want to see not just for clinical trials, but also for

long-term patient benefi t.”

“Ethics committees in other countries sometimes also ask a lot

of questions about placebo: why you want it and can you do it with-

out it. Eastern European countries are stricter now about placebos

as well. Originally countries like Poland were pretty open to clinical

trials but now the psychiatric committee there has issues with some

kind of consensus.

“As long as there’s available treatment they do not suggest that

we use placebo in the studies, so we had to withdraw our applica-

tions. We don’t know the trend but it looks like as a company we are

moving towards more Asian and South American locations instead of

Eastern European countries, although Russia is currently has a pretty

good regulatory environment.”

Patient qualityPatient recruitment methods also differ depending on the country

in which the trial is being carried out. Shen says she is strongly opposed

to the notion that patient recruitment should be conducted based on

speed alone. “I want to recruit patients quickly, but I also want to em-

phasize the quality of the patient. We also face challenges with patient

trust in some regions.

“For example, in China and Taiwan the method of recruiting patients

largely depends on the relationship with the site. In those countries pa-

tients need therapeutic alignment with the physicians, so if they trust

the physician they come to the studies and stay with the treatment, but

if they don’t it’s hard retain them or get them to come to clinical trials

because it’s still a relatively new concept in those regions.

“You have to have a very good relationship with the site. I cannot

emphasise that enough because that’s one of the things our com-

WYETH FAST FACTS

• Founded in 1926 under the name

American Home Products Corporation

• Headquartered in Madison, NJ

• Operating in more than 100 countries

• 47,500 employees worldwide

“We need a diversifi ed patient population, which is very

important for development if you are marketing all over the world”

joan shen.indd 104 8/4/09 13:49:23

Genostar.indd 1 8/4/09 13:16:12

A lthough we are now beginning to benefit

from the genetic, genomic and proteom-

ic discoveries over the last decade, the

implementation of biomarkers for patient strat-

ification to improve diagnostics, prognostics and

companion assays for oncology targeted thera-

pies is still an extremely challenging endeavour

with limited success. This is due to many factors,

including the lack of implementation of true sys-

tems-based approaches in clinical development

to achieve multiplexed, multi-parametric, phe-

notypic profiling of protein biomarkers and cor-

responding tissue microanatomy.

PredictionsAccurate prediction of biological events,

whether it be disease prognosis, toxicity or thera-

peutic response, will become increasingly similar

to how we predict other multivariate phenome-

non; for example, the weather. A hundred years

ago farmers had to rely largely on qualitative, non-

integrated methods such as a weathervane, cloud

patterns, and an almanac for identifying weather

trends. Today, when one wishes to see the weath-

er forecast, a visit online to any one of a myriad of

weather-related websites provides a variety of im-

ages and quantitative information at our finger-

tips. Multivariate modeling integrates several

factors (images, temperature, barometric pres-

sure, wind speed, historical data, etc.) yielding ac-

curate weather forecast information, which we are

then able to make decisions with.

There is no doubt that our efforts in ‘forecast-

ing’ biological events could benefit from a similar

approach. However, at the present time, we are

often looking for ‘silver bullets’ that will facilitate

medical decisions, drug prioritisation or clinical

trial enrichment. In the press, we often read about

a single gene or protein that is responsible for can-

cer. This kind of over simplification of the problem

further inhibits our abilities to make strides in di-

agnosis, prognosis and drug development.

ProblemsCompounding the problem is the fact that the

current sequential clinical development paradigm

does not facilitate the development of multivari-

ate assays that can aid in a better understanding

of how multiple signal transduction pathways can

affect the progression or therapeutic response of

an individual’s unique cancer. This is because in

order to develop these kinds of assays for a spe-

cific patient set, pathologists need access to pa-

tient tissue samples from the specific clinical trials

in which they are conducting.

Phase III clinical trials are where there are

usually adequate patient numbers for multivari-

ate assay development. However, by the time clin-

ical trials are in phase III, it is too late to develop

a training model, validate the model, and then run

an additional prospective study to demonstrate

feasibility under FDA guidance. As such, bio-phar-

maceutical companies are forced into a dynamic

that often only considers the target in question

(i.e., Her2/neu, EGFR, etc.) or related molecules

within the pathway that the therapeutic agent

seeks to perturbate. The result is that even

though we have examples of personalised medi-

cine such as Herceptin, response rates are still

lower than desired even among patients who

have been classified as potential responders via

a companion assay (i.e., immunohistochemistry).

Although a particular patient may have an over-

active angiogenesis-related biomarker which

shows up in the immunohistochemical test, there

is currently little opportunity in the clinical devel-

opment process to stratify patients by utilising the

simultaneous measurement of biomarkers that

belong to multiple pathways. These other path-

ways may be compensating when the original

drug target is inhibited, leading to the low re-

sponse rates we are faced with today.

SolutionsA few solutions might be for the FDA to fa-

cilitate a clinical development process that is

more interactive than sequential, which could fa-

cilitate true systems-based, multivariate ap-

proaches. Additionally, further guidance for in

vitro diagnostic multivariate index assays

(IVDMIAs) is needed. Bio-Pharmaceutical drug

developers, cancer research centers, technolo-

gy providers and clinical service labs should

work together more closely, synergising efforts

where possible. As described in the article in

‘Imaging is Key to Success in Translational

Research and Drug Development,’ image intel-

ligence solutions that can be implemented

across the entire biomedical continuum will also

be needed. Further, we should accept that com-

plex biological problems will require systems-

based approaches to understand them as

opposed to approaches based on an oversim-

plification of the underlying biology. n


Why the implementation of biomarkers for patient stratificationto improve oncology-targeted therapies is still an extremelychallenging endeavour with limited success. By Peter Duncan

ASK THE EXPERT

Peter Duncan joined Definiens AG in December of 2008 as Global Director, Marketing and Business

Development, Life Sciences. In this capacity, Duncan manages external collaborations with leading

cancer centres, industry partners and biopharmaceutical companies. Prior to Definiens, he served as

Vice President, Business Development at Aureon Laboratories and was responsible for several

collaborations around applying morphometric imaging techniques to multiplexed

immunofluorescence assays applied to formalin-fixed, paraffin embedded tumor tissue. Peter has

over 15 years of executive sales, marketing and business development experience spanning the

analytical chemistry, biotechnology and diagnostic industries. He holds a BS degree in Biochemistry

from the University of Vermont.

The challenges of biomarkers

“The implementation of biomarkersfor patient stratification to improve

diagnostics, prognostics andcompanion assays for oncologytargeted therapies is still an

extremely challenging endeavourwith limited success”

DEFINIENS ATE:mar09 08/04/2009 13:42 Page 106

Definens.indd 1 8/4/09 13:14:44

Teradisc2.indd 1 8/4/09 13:25:48


NGP. What technologies can companies use to

help reduce the cost of drug discovery?

Simon Wood. It is clear that many different

informatics solutions are used to manage the

huge amounts of data generated in the drug

discovery process. This data and information

are key to making informed management

decisions for individual discovery projects,

especially as far as go/no go or fail early de-

cisions are concerned, and these are key to

efficient use of resources, including people

and money. However, this information is often

fragmented and isolated throughout the dis-

covery organisation. Laboratory informatics

solutions, such as scientific data manage-

ment systems (SDMS), can unify this data

into a single source, and make it available

to the people and systems that need it. This

supports efficient decision-making, therefore

helping control costs.

Ed Addison. At TeraDisc, we are reducing the

cost of drug discovery using a QM/MM algo-

rithms with intelligent search over molecular

space using a 2200 CPU high performance com-

puting cluster. The software is patent pending

and university generated and has shown prom-

ising results in terms of achieving very accurate

binding predictions for both small molecules

and peptides. We are able to discover lead

compounds by searching theoretical space

rather than an existing molecular library. The

results are a highly focused library of good

binding leads generated ‘in silico’ in just a few

months using a tool known as ‘Inverse Design’.

We do this for clients as a service.

Life sciences computing, modelling and in

silico design have been used only in a limited

way up to now. However, the in the past four

years, the speed, memory improvement and

throughput of high performance comput-

ing has been nothing short of breathtaking.

TeraDisc is deploying over 10,000 CPUs in a

high speed network over the next 18 months

in anticipation of greater demand for process-

ing high throughput biological data, and to be

able to conduct ultra high performance in silico

binding affinity assessments using quantum

mechanics for hundreds of millions of leads per

target project. Today, we are working with the

forward thinking organisations who want an

early adopter advantage in this area.

NGP. With looming patent expiries, pharma-

ceutical companies need to be more efficient

in R&D to stay ahead of the competition. What

tools can they use to help achieve streamline

their drug discovery process?

EA. The pharmaceutical companies that are

able to use high performance computing as

a preliminary step in discovery – for virtual

screening, target validation, toxicity assess-

ment, or mechanism of action studies – will be

better positioned to save time and money in

the discovery process.

Examples of tools running on high per-

formance computers that help with drug

discovery costs are biomarker extraction al-

gorithms, target simulation, virtual screening

and toxicity evaluations.

SW. From an informatics point of view, the tools

that help companies cut the cost of drug dis-

covery are the same as the tools that will help

streamline the drug discovery process by facili-

tating the decision making process. So again it

comes down to those systems that will provide

unified access to the required data no matter

where it comes from or what systems generate

it. An SDMS, for example, should be capable of

taking project data from multiple sources, ex-

tracting key data, storing it in a format-neutral

way (which also preserves long-term value of

the data) and making it available for searching

and reporting.

Making inforMed decisions

NGP talks to a panel of experts about using

informatics solutions to manage data in the drug

discovery process.

ROUNDTABLE

“The software has shown promising results in terms of achieving very accurate

binding predictions”Ed Addison

Starlim RT.indd 109 8/4/09 15:20:57


NGP. Drug firms are facing increasing demands

for compliance from regulatory bodies. What

tools can they use to help them meet these

requirements?

SW. Perhaps the most important tools that will

help drug firms meet their regulatory require-

ments are the ones that will help them imple-

ment and manage the traceability requirements

of those regulations. Some estimates put the

amount of time spent on regulatory and compli-

ance activities within the lab to be as high as

70 percent. Clearly, any informatics systems

implemented in the lab must support the

regulatory needs to try and reduce this burden.

Perhaps the most obvious example of this is

the support of electronic signatures in line

with FDA 21CFR Part 11 regulations. However,

systems such as LIMS will also support other

regulatory requirements – including managing

instrument maintenance and analyst training

and certification, inventory management and

chain of custody records. They will also provide

an automatic audit trail of actions taken and

changes made. Using informatics solutions to

manage regulatory needs not only eliminates

possible missing records, where lab staff forget

to record the required information, but also

makes the retrieval of regulatory data easier.

EA. One tool that we are developing is a high

performance PK/PD algorithm that runs on

high performance computers and that is capa-

ble of analysing clinical trials outcomes on very

large trials with many parameters, even high

content data. Our tool is based on a Bayesian

approach. This will enable drug developers to

provide statistical proof of fine grain outcomes

useful for personalised medicine, biomarker

identification, and/or risk assessment.

NGP. How do you see the future of drug discov-

ery developing in the next few years?

EA. We believe the market must prepare for a

transition to a greater use of life science com-

puting to be more efficient, and from a busi-

ness point of view the market must address

the transition to personalised medicine. This

means that more drugs with smaller market

sizes must be developed quicker.

Despite the uncertainties surrounding

precise cost and time estimates in the field

of personalised medicine, various impacts on

the drug development process, pipeline and

industry value chain have been identified as

more powerful and safer drugs, due to genetic

specificity and ability to choose dosing based

on biomarkers. This also requires the provi-

sion of genetic and other diagnostics to test

biomarkers, which has led to an expected im-

provement in drug discovery and development

through increasing knowledge of genomics

and bioinformatics.

Another impact has been the increased

need for IT in the drug development, discovery,

approval and clinical administration process,

along with a decrease in pharmaceutical pric-

ing and healthcare costs, due to lower develop-

ment costs

The onslaught of personalised medicine

in the marketplace represents a classic dis-

continuity. It is currently in the ‘incubation’

period. However, when personalised medicine

Simon Wood is Executive Director,

Marketing and Education at STARLIMS

Corporation. A leading authority in

laboratory informatics, he is a popular

lecturer on system implementation

and laboratory IT. His prior experience

includes establishing, for Thermo

LabSystems, the industry’s largest LIMS

implementation team. He holds a PhD

from Sheffield University.

Ed Addison is an established serial

entrepreneur and CEO of TeraDisc, a

company that provides high performance

computing applications for drug discovery.

Named “Entrepreneur of the Year” after

achieving #51 on the National Fast 500

in 1994, he is also an Adjunct Professor

of Bioinformatics at Johns Hopkins

University.

reaches the rapid growth period, there will be

a paradigm shifting affect in the industry that

accounts for all the factors above. While the

specific timing and magnitudes of the met-

rics involved are not known yet, the gradual

industry shake up expected to occur will have

a significant impact on the business models,

pipelines and growth rates of major pharma-

ceutical companies. Embracing life sciences

computing models will greatly improve the ef-

ficiency of this transition.

SW. The pressure on drug companies to

streamline their pipeline and bring candi-

date compounds to market quicker will only

continue; and the pressure will be on drug

discovery organisations to identify high po-

tential compounds to deliver to the rest of the

value chain. Continued consolidation within

the industry in terms of mergers and acquisi-

tions and the continued development of col-

laborative projects will all affect drug discovery

organisations. The reliance on IT solutions will

increase, but organisations will be looking for

unified systems and solutions that allow them

to concentrate on realizing the true value of

the data and information that exists within the

whole organisation, as opposed to just manag-

ing the data produced. The ability to deliver the

data and information produced throughout the

organisation to the people and systems that

require it will be of paramount importance. n

“Some estimates put the amount of time spent on

regulatory and compliance activities within the lab to be

as high as 70 percent”

Simon Wood

Starlim RT.indd 110 8/4/09 15:20:59

Starlims.indd 1 8/4/09 13:25:11

NGP. Drug repositioning seems to be attracting

increasing interest in thepharmaceuticalworld.

Is there a real need for it?

Andreas Persidis. Drug repositioning has been

attracting the interest of pharmaceutical and

biotech companies for two reasons: commercial

and scientific. On the commercial side, the sim-

ple truth is that companypipelines are not grow-

ing at the desired pace. At the same time, the

return per dollar or euro spent in the lab has

been steadily decreasing. Pharmaceuticals have

been trying a number of tactics such as ‘light re-

formulations’ that extendpatent protection and

company buyouts that instantly grow their

pipelines with new compounds. These tactics,

however, are proving less viable as regulatory

bodies tighten their criteria andwe begin to run

out of companies to buy.

On the scientific side, thepromiseof certain

technologies is not unfolding as hoped for. At

the same time, we are all beginning to realise

some of the limitations of our existing knowl-

edge, not only at the disease, but also at the bi-

ology and drug mechanism levels. In this

context, it makes sense to ‘milk the knowledge

cow’by recombiningourexistingknowledge inas

manynewwaysaspossible,with the specificaim

of identifyingworkabledrug-therapeuticareacor-

relations that have so far escaped our attention

and screening systems. So, yes, in my opinion

there is a real need for drug repositioning.

NGP. Is drug repositioning here to stay?

AP. I think drug repositioning is here to stay and

eventually could even lead to the transformation

ofdrugdevelopmentaswecurrentlyknowit.Drug

repositioning representsashift in thewaywe look

at biology and develop drugs, by actively exploit-

ing the interconnectivityofbiological sub-systems

andprocessesaswell as themulti-facetednature

of disease mechanisms. The tools and methods

that are currently developedwith repositioning in

mind, could however be applied to de novo com-

pounddiscoveries,aswellas to improvingourun-

derstanding of biology itself. Then, there is a very

sound financial argument that works in favour of

repositioning. In certain circumstances reposi-

tioningcandeliver results for20percentof thetyp-

ical cost of bringing a new compound to phase II

using traditional approaches.

Finally, thereareefficiency reasons thatmake

active repositioning a sensible strategy to follow. I

think it is clear that everyVPof clinical or business

developmentwants to knowall viable uses of the

compoundsat theirdisposalsoastomaximisethe

exploitationpotentialof their company’sportfolio.

This isnotpresently thecase,anddrugreposition-

ing isonegoodway toaddress the issue.

NGP. In adrug repositioning context,what is the

role of academia and of traditional drug devel-

opment processes?

AP. By definition, drug repositioning works on

existing knowledge – it reshuffleswhatweknow

about diseases and compounds in new and in-

terestingways that hopefully lead to newor bet-

ter therapies. Butmanymayhold thatmuch that

can be repositioned already has been. Here

however, we need to remember that each new

bit of knowledge interacts with many prior bits

of knowledge, potentially creating opportunity

for new discoveries.

If we look at each newdiscovery as a singu-

lar chunk of knowledge, then every single new

chunk that is added to our existing collection of

chunks (our entire body of biological and drug

knowledge) creates thousands, if notmillions, of

new combinations to be explored. It is also clear

that the clinical trials phases are here to stay for

quite some time.Drug repositioningholds some

significant promise to shorten and make less

costly the development of drugs; it is clear, how-

ever, that traditional scientific discovery as cur-

rently practiced in academiawill continue toplay

a significant role.

NGP. Is there a best way in which drug reposi-

tioning can be practiced?

AP. Drug repositioning is not a new idea. It has

beenhappening since the early 1990s,mostly as

a serendipitous process. In recent years, how-

ever, and as its value becomes more evident, a

number of companies have developed tools to

make the process more systematic. Most use

mathematical or othermodels that by necessity

make certain assumptions andmay omit seem-

ingly unrelated but probably relevant knowl-

edge. They also tend to focus on thebenefit side

of the equation, i.e., finding the newapplication

for the compound or drug. Some companies,

such asBiovista, go a step further by simultane-

ously addressing the risk side of the equation,

namely the adverse effects profile, making for

much more balanced predictions of the clinical

outcome of the repositioned drug. �

The future of drug repositioning


Andreas Persidis is the co-founder

and CEO of Biovista Inc. He has

conducted research work in the field of

applied artificial intelligence,

culminating in the development of

Biovista’s technology platform. Persidis

is a project reviewer and evaluator for

the European Commission and the

Austrian government and serves on a

number of expert panels on knowledge

discovery technologies.

EXECUTIVE INTERVIEW

Andreas Persidis talks to NGP about the transformational potential of drug repositioning.

For further information please contact [email protected].

Biovista ED:13sept 8/4/09 13:41 Page 112

Biovista.indd 1 8/4/09 13:12:05


loses a scientist affiliated with your project, you can lose access to

months – even years – of knowledge. If the only other record of the

scientist’s work is a paper notebook, the odds of recovering that

knowledge fall dramatically.

Patent filing and defenseOnce the research is completed, your partner must assist in

identifying and protecting your research. This includes: findings that

match the raw data, human readable and printable records in accept-

able forms (such as XML and PDF), preservation of time/date stamps

and signatures by inventors and witnesses,

preservation of the audit trail for the records,

and authenticating that the records are origi-

nal and have not been tampered with.

PreservationEven after a patent has been protected,

your partner’s procedures could still under-

mine the profitability of your investment.

Regulatory agencies require many records

be retained long-term, in some cases beyond

even the end of the patent. This includes

disaster recovery, data backup, role-based

access controls, audit trails, computer system

security and other measures that will help

safeguard your R&D investments. Indeed,

you must even look beyond the partner’s

procedures and consider their longevity as

well. If the company may not survive to meet

regulatory requirements, you must address

the preservation of critical IP.

Partnerships can deliver tremendous

benefits through innovative technologies,

lower costs, greater speed and agility, and a

range of talent and expertise not practical to

maintain within a single organisation. How-

ever, the value generated in a partnership is

realised not through the contents at the bottom of a test tube, but

rather through the creation, capture and exploitation of the resulting

knowledge, records and intellectual property. With great opportunity

comes great risk, increasing the necessity of protecting your invest-

ment by enforcing adequate procedural and technical controls both

within your organisation and within your partner’s. Be certain you

can trust – and verify – the results of collaboration; your success is

at stake. n

DocumentationIf collaborators have inconsistent documentation practices, you

must assume that Intellectual property (IP) defense will be judged on

the lower of the two standards. Your investment can be put at risk if a

partner does not share your compliance with appropriate local and in-

ternational regulations including: signing and witnessing lab records,

fully documented evidence trails, and recent US procedural require-

ments to keep electronic lab records in their original electronic form.

If a partner were to lose data or witnessed signatures, you run the risk

either of failing to adequately support your claims or that the partner

might subsequently falsify this information to

redress the losses.

Advanced disclosureDisclosure of data before patents are

filed is always a concern, but this risk is ex-

ponentially greater in a collaborative environ-

ment. Policies relating to the presentation or

publishing of data can vary greatly between

organisations, particularly in academic envi-

ronments that place greater weight on public

disclosure. Technology has also increased

the number of communication channels,

including conferences, papers, grants sub-

missions, webcasts, email, chat, podcasts

and wikis. Each new communication medium

makes it that much more difficult to monitor a

partner’s activities.

Adverse dataFailure to identify and address adverse

data findings is another source of risk for re-

search organisations. During legal proceed-

ings for patents or efficacy, these ‘skeletons’

can put your investment at risk. Recognise

the implications of the procedural and tech-

nical measures that your partner uses to

identify potential issues with drug safety, efficacy or stability; as

well as notes or collected evidence that fails to support your scien-

tific hypotheses.

Organisational risksWhen considering the risks of collaboration, it’s natural to focus

on paper and electronic records. Unfortunately, even the company’s

personnel policies can create risk for your investment. If a partner

INDUSTRY INSIGHT

Six riSkS to intellectual property By Jeff Spitzner

While partnerships play an increasingly critical role in the drug development lifecycle, a poorly structured partnership can expose your intellectual property to considerable risk. By understanding six common sources of risk, you can take steps to protect your investment.

Jeff Spitzner has more than 20

years’ experience in management of

scientific software and biotechnology

companies and has been recognised

as a leader in electronic lab notebooks

(ELNs), bioinformatics, and knowledge

management. He is currently President and

Chief Science Officer of Rescentris.

Rescentris.indd 114 8/4/09 14:00:09

Rescentris.indd 1 8/4/09 13:22:25

NGP.Why is it hard to predict a patient’s response during the development

of a new drug?

Allen Roses.One never knows how one is going to respond to an external

chemical given to the body. What is made harder is if you don’t study it

when it occurs, andmost people have not done so because it was prohib-

itive and there was no way of really doing so in

the past, but now you can apply pharmacoge-

netic technology during the development peri-

od. As a result of this, when an adverse event

occurs, there are now ways of finding the ge-

netic markers that are associated with those

people who will respond or those people who

may get an adverse effect.

NGP.What effects will multi-gene studies have on

the discovery and the drug development?

AR. When we’re working on a drug that’s in a particular therapeutic area,

we canuse candidate gene lists that have to dowith either the disease and

whatwe thinkweknowabout thedisease,or themechanismof themolecule

thatweareproviding,whichwewouldknowabout.These couldbehelpful in

termsof focusonefficacyeffects thatwewouldsee inusingthedrug.Thedrug

isused ina trial thatcontainsacertainpercentageofpeople thathavetheclin-

ical endpoints. The initial candidate gene lists that wewould use –which ac-

tually arepolymorphisms, or varianceswithinor around the candidate genes

– thosewouldbe thefirst thingswewouldstudy.Andabout80percentof the

time,weachieve reasonable data.

NGP. Why is pharmacogenetics expanding in the

industry?

AR. There are a couple of reasons. The industry is

contracting because it has been operating on the

overall ‘one size fits all’ concept. We’re going to

make a drug, everybody’s going to take it at the

dose at which we put it out there. With all the

failures of proof of concept – the inability to

show efficacy with many, many molecules – and

with the safety problems that are associated

with many molecules, drugs have come under both public and news-

paper/journalistic attack for being unsafe and for not working. But the

real driving reason for all this is always the finances, and it isn’t as im-

portant that you get your drug registered, although that certainly is im-

portant, what’s critically important is to get it reimbursed.

The genetic advantage


Allen Roses tells NGP how pharmacogenetics can help cut the size and costof clinical trials.

PHARMACOGENETICS

106,000deaths and 2.2 million seriousevents are caused by adverse drugreactions in the US each year

Roses ED:13sept 8/4/09 13:59 Page 116

Pharmacogenetics can identify the

people in advance who will respond to

the drugonce it’s on themarket because

of studies that were done during devel-

opment – companion diagnostics. The

insurer or the national health service, or

whoever’s making these decisions, can

estimatewhat the cost of thedrugwill be

if given to those people with predicted

responses, and not given to those peo-

ple who don’t have a predicted re-

sponse.

There is a very different approach in

Europe than in theUS. In theUS, thegov-

ernment or a government agency does-

n’t make the decisions; they’re made by

panoply of large healthcare providers.

Pharmacogenetics can provide value to

the drug at a reasonable cost by identi-

fying people who will respond that the

drug can be reimbursed, protecting the

drug against adverse events by develop-

ingprognostic or diagnosticmarkers and

identifying people who might have ad-

verse events.

NGP. What is the importance of an effi-

cient collaboration between industry

and academia in regards to collection of

pharmacogenetic data?

AR.There are twowaysof looking at this:

a pharmacogenetic study, in a single

study, can be done in a general universi-

ty. Usually this isn’t done until after the

drug is on themarket, before they canhave access to it, and is usually look-

ing at adverse events,which are all a negative influence as far as drug com-

panies are concerned.

We’ve established a series of external companies, small, which are

called the BlueWine Group, after the Duke Blue Devils mascot. The Duke

Wine Group has three companies: one of them is Cabernet, and Cabernet

Pharmaceuticals has a strictly laser focus on pharmacogenetic consul-

tation and project management for large pharma. This is how I spend 20

percent of my consultation time at Duke.We’re not getting anything out

of it except keeping these studies going and allowing them to achieve a

better chance of getting proof of concept, and a better chance of keep-

ing their drugs on themarket and providing new drugs, all of which they

totally own.

However, becausewe’re creating companion diagnostics for themand

their drugs, we also have the opportunity to commercialise those com-

panion diagnostics. Therefore, a second company, called Shiraz

Pharmaceuticals, is in charge ofmaking the arrangements and taking care

of all the things the drug company doesn’t want to, or doesn’t have the ex-

pertise in-house to do, to commercialise those companion diagnostics.

In the case of Shiraz

Pharmaceuticals, it’s part of Dean

Drug Discovery: it has a relationship

with theDeanDrugDiscovery research

institute that we have, which is called

the Dean Drug Discovery Institute. Any

milestone in royalties thatare collected

by Shiraz, 80 percent will be paid to

DukeUniversity.So itbecomesasource

of income for Duke, and it also be-

comes an automatic thought process

about, if we have some IP that’s devel-

oped inside the university, maybe we

should go to Shiraz to see about com-

mercialisation.

We get commercialisable IP from

private individuals, from Duke and

other universities, andas timegoeson

from the companies with whom we

have contracts for the development of

companion diagnostics. That then al-

lows people within the university to

understand how the market for drugs

actuallyworks, and it also shows them

ways that we can share in technology,

not as a one-off but with defined ex-

pertise. That defined expertise is

being developed transferred in educa-

tional programs, both to the Fuqua

School of Business and to the Duke

Medical School.

The third company that’s been

started is a company called Zinfandel

Pharmaceuticals, so they’re all red

wines. Zinfandel Pharmaceuticals is preparing to do a prevention clinical

trial studywith Alzheimer’s disease. It’s taking IP thatwasdeveloped for di-

agnostic purposes to predict whowill develop Alzheimer’s disease atwhat

particular age, sowe can take an epidemiological population between ages

62and87 and predict a high-risk group versus a low-risk group.

Then we would design and register our study with the regulators

using pharmacogenetics to identify the high risks during the course of

the study of the people who would go from normal to the development

of Alzheimer’s disease. Instead of needing hundreds of thousands of

people to do that kind of study, you can do it with much lower numbers,

if it works.

Wewill partnerwithmajor pharmaceutical companieswhohaveamol-

ecule thatweare interested in.We’re designing thepreliminary studieswith

several epidemiological populations across the world to see how fast we

could recruit people who are virtually or seemingly normal between the

ages of 62 and 87. At the time the study would be ready to start, probably

in late 2010 or early 2011, we would already have names of people who

have said theywould be interested in participating and get a very, very fast

start to the study. �


Allen Roses is Jefferson Pilot Professor of Neurobiology at

Duke University and CEO of Cabernet Pharmaceuticals,

Inc. He also serves in several capacities at Duke

University: as Jefferson-Pilot Professor of Neurobiology

and Genetics, as Professor of Medicine (Neurology) as

Director of the Deane Drug Discovery Institute, and as

Senior Scholar at the Fuqua School of Business. He

recently returned to Duke after a decade-long career as a

Senior Vice President at GlaxoSmithKline .

Roses ED:13sept 8/4/09 13:59 Page 117


The three genomic technologies (se-

quencing, microarray analysis and

real-time PCR) have contributed signif-

icantly to the understanding of biologi-

cal mechanisms underlying disease processes

and are well-established research tools in the

drug discovery and development process.

In particular, the identifi cation of dis-

ease-specifi c genetic signatures, the inves-

tigation of mutations in disease-associated

genes, and the quantifi cation of expression

of these genes can provide new insights into

the pathogenic mechanisms of a disease,

and may ultimately lead to new therapeutic

approaches. In addition, gene expression

monitoring could potentially be used for im-

proving the drug development process, such

as in predictive toxicology or in better predic-

tion of dose-response effects.

The identifi cation of sub-segments of

patient populations on the basis of meaning-

ful biomarkers to allow for selection of the

group of patients most likely to respond, to

improve the dosage of a drug or to monitor

disease progression, is also increasingly

based on the use of molecular methods.

ThroughputHypothesis free analysis of the expres-

sion levels of all genes involved in the biology

of a disease would provide great insight into

the alterations leading to a particular disease

state. Although this approach is increasingly

employed, driven by the availability of next

generation sequencing approaches, the

use of microarray analysis has a longer his-

tory and track record in the measurement of

gene expression levels, SNP profi ling or copy

number variation measurement. Microarray

profi ling is powerful in providing data points

at reasonable costs. The results, however,

need to be validated by real-time PCR to allow

for greater sensitivity, increased dynamic

range and confi rmation of specifi city.

Among the challenges in real-time PCR

is coping with the complexity of the study.

Many experimental set-ups will require high

sample numbers to be measured for one or

a few target genes, whereas measurement of

gene signatures will require the analysis of a

higher number of target genes per sample.

Currently, real-time PCR is well established

in 96- and 384-well format. Especially for

the analysis of gene expression patterns,

the required sample amount for multi-well

analysis on 384-well plates can be insuf-

fi cient, depending on the sample type being

used. Whereas pre-amplifi cation of the RNA

can increase the number of analysis that

can be performed on a single sample, many

researchers prefer to decrease the sample

volume required. Innovative technologies

have been developed that allow real-time

PCR measurement in volumes well below the

µl range. Whereas these technologies can

be applied without pre-amplifi cation when

the target gene concentration in the sample

is high enough, they will suffer from lacking

sensitivity for lower expressed genes.

To balance throughput requirements

with sensitivity, the availability of a 1536-

well real-time PCR system has several advan-

tages. Real-time PCR can be performed in 0,5

– 2 µl for suffi cient sensitivity, plates can be

loaded with a selection of existing automat-

ed pipetting technologies and the plate can

be fl exibly confi gured with regard to number

of samples/ targets, fi tting the needs of the

individual experiment.

Another challenge in real-time PCR is the

development of assays with good perform-

ance. Especially when measuring the expres-

sion levels from multiple genes the design

of assays is extremely laborious. Important

criteria are PCR effi ciency 2.0 +/- 0.2, linear

dynamic range of at least three logs and

similar signal heights of amplifi cation curves.

Also important are R2 value of standard curve

between 0.99 and 1.00, high specifi city and

no side products, Cp <= 34 of highest cDNA

concentration and good shape of amplifi ca-

tion curve.

Highest convenience for users is offered

when assays are offered pre-formatted on

PCR-plates, provided that the validation

criteria listed above can be met. Logical

panels, based upon well described biological

pathways allow the measurement of expres-

sion of many relevant genes simultaneously,

thereby greatly reducing the effort in assay

development.

Ultimately, the combination of high

throughput (384- / 1536- well) platforms

with formatting of validated PCR assays of

the researchers choice on PCR plates will

make it easier to employ molecular methods

in pharmaceutical research.

ASK THE EXPERT

Extending molecular methods

Robertus van Miltenburg, MBA is

the Director of Marketing for qPCR and

Nucleic Acid Preparation Systems for

Roche Applied Science. Roche Applied

Science is a business area within the

Roche Diagnostics Division of Hoffmann-

La Roche. Roche Applied Science

develops and markets analytical tools and

systems for the life science industry.

“Innovative technologies have

been developed that allow real-time PCR

measurement in volumes well below

the µl range”

ROBERTUS VAN MILTENBURG

RocheDiagnostic.indd 118 8/4/09 13:46:47

RocheDiagnostics.indd 1 8/4/09 13:23:19

NGP. What biomarkers are being used to

allow for drug development?

Philippe Goix. Biomarkers, are widely used

in virtually all therapeutic areas including;

Cardiovascular (e.g. Cardiac Troponin I),

CNS diseases (e.g. Amyloid βeta 40, 42),

Oncology (e.g. VEGF, Akt-1, PSA), Metabolic

Diseases (e.g. Insulin, GLP-1), and Infl amma-

tory Diseases (cytokines and chemokines).

Biomarkers serve a variety of different pur-

poses in support of pharmaceutical develop-

ment; a wide range of biomarkers are being

used in drug development covering nearly all

classifi cations of analytes, including proteins

and metabolites, genetic markers, DNA, RNA

and many others across a wide range of plat-

forms. For example, Singulex immunoassays

focus upon proteins such as cytokines, chem-

okines, growth factors, transcription factors,

and hormones, regulatory proteins such as

troponin and metabolites such as cAMP.

NGP. Why are biomarkers important for per-

sonalised healthcare?

PG. Biomarkers are used in personalised

healthcare as a diagnostic tool to identify pop-

ulations for stratifi cation and abnormalities in

individuals, to be better able to tell who can

benefi t from therapies and to track individual

disease progression. They are also used to

modify or switch therapies when one mode is

not successful, and also to maximise the utili-

sation of drugs e.g. to better enable drugs and

delivery modes to be cost effective.

NGP. How can they be used to measure dis-

ease progression?

PG. Many biomarkers can be used as pro-

gression monitors from normalcy. The pri-

mary logic is that there are baseline levels

of biomarkers that can be measured in indi-

vidual patients. By following the patient over

time, medical professionals would be able

to monitor the progression from any given

state, either healthy to sick or preferably sick

to healthy. It is hoped that the detection of

the disease arrives in time for a therapeutic

intervention.

Many biomarkers that are clinically relevant,

however, are diffi cult to monitor with given

technologies currently available (such as

lacking the necessary sensitivity to measure

the changes). By increasing assay sensitivity,

it is possible to observe the minute levels of

the analyte of interest. Thus, allowing for

observation of small incremental changes

(approximately 50-250 fg/mL) from a given

state providing the researcher or clinician

with vital data about the effi cacy of a given

drug or treatment regimen.

For example, Singulex has pioneered devel-

opment of a very sensitive troponin I assay.

With this assay it is possible to observe

very small changes in troponin. In placing

patients on a treadmill it is possible to ob-

serve a difference between resting states

and exercise states and determine those at

highest risk. Our work with rats verifi ed that

many of the same principals apply to animals

and troponin.

NGP. How can effi cacy and safety be suc-

cessfully balanced during drug discovery?

PG. By increasing sensitivity, the therapeutic

index can be optimised on both ends (safety

and effi cacy) to obtain the optimal amount

(least amount) of drug to have the greatest

effect. To accomplish this task requires a re-

producible and sensitive surrogate biomar-

ker. Knowing the stability of the analyte in

your population helps to provide a framework

or a relevant base from which to measure.

With this baseline of the biomarker/analyte

one can observe signifi cant changes beyond

baseline variation.

Surrogate biomarkers can track disease se-

verity and the effect of the drug to modify or

minimise the disease. Additionally, there are

specifi c markers that are indicative of toxic

effects and can be monitored in relation to

the effi cacy of dosage.

Philippe J. Goix is the President and

CEO of Singulex, Inc. Dr. Goix took the

position in 2004 to spearhead Singulex’s

commercial efforts in the life science and

diagnostic markets. Previously, he founded

Guava Technologies and was a senior

scientist at Sandia National Laboratories,

Stanford University, and CNRS France.

Biomarker use in drug development


EXECUTIVE INTERVIEW

Singulex.indd 120 8/4/09 14:46:57

Singulex.indd 1 8/4/09 13:24:53


The rising costs of bringing a

drug to market and the cost

pressure under which health-

care systems operate has cre-

ated an environment in which

the development of successful

drugs has become increasingly challenging.

In order to grow profitability, pharma must

focus on both reducing the costs of drug

development and on increasing the medical

value for segmented patient populations.

Flexible solutions are required to address

the needs of the drug discovery process and

support downstream clinical trials. Next gen-

eration sequencing, coupled with genomic

enrichment technologies, offer new technical

solutions for more efficient pharmaceutical

and diagnostic development.

The genomics revolutionGenetics play a large role in human

health and DNA sequencing has proven to

be an important tool in understanding the

genetic basis of disease. However, the cost

and resources needed for capillary (Sanger)

sequencing has limited the scope of genomic

analysis of disease. The next generation

sequencing era, marked by the commer-

cialisation of the Genome Sequencer System

from 454 Life Sciences in 2005, triggered a

fundamental change in the way researchers

approach personal genetic variation. Rather

than analysing a single sample at a coarse

level, the speed and throughput of next

generation sequencing systems enables

scientists to study hundreds of samples at

significant depth and quality.

With the introduction of genomic enrich-

ment technologies, such as Roche Nimble-

Gen’s Sequence Capture Array products, the

time and cost of sequencing has decreased

further, as it is now possible to capture and

sequence only the human genomic regions

of interest. These arrays target specific can-

didate gene or exon sets, the whole human

exome, and contiguous disease-associated

regions. The combination of 454 Sequencing

and NimbleGen Sequence Capture arrays has

created a paradigm shift for the analysis of

variants within genomic loci and megabase-

sized disease regions that play critical roles

in human health. The challenge now is to

rapidly and accurately apply these technolo-

gies to understand how disease-associated

genetic variation can ultimately lead to pow-

erful discoveries of new drug targets.

Accelerating discoveriesThese technologies enable innovative

approaches to develop novel therapies and

diagnostics, and are considered one tangible

pathway toward personalised healthcare.

Recent studies have used 454 Sequencing

alone or in combination with NimbleGen

Ushering in the era of personalised healthcare

Gerd Maass has worked for

Roche since 1997 in several global

programs in the field of cancer drug

research and development. From

2001-2006, he was responsible for

the management of the pharmaco-

diagnostic programs in cancer.

Between 2007 and July 2008,

Maass headed the research and

development activities of Roche

Applied Science. Effective August

1st, 2008, he was appointed as

President and CEO of Roche

NimbleGen, located in Madison,

Wisconsin.

Sequence Capture Arrays to uncover new in-

sights into the genetic basis of a wide range

of diseases, including the following:

Oncology: In a pivotal paper published

in Nature Methods in 2006, Thomas et al

demonstrated that 454 Sequencing could

be used to elucidate cancer tumour micro-

heterogeneity. The study identified two

minority EGFR populations at a frequency

of two percent and three percent of the total

EGFR, both of which were associated with

clinical resistance to EGFR inhibitor drugs.

In another study, the combination of 454 Se-

quencing and NimbleGen Sequence Capture

Arrays was used to analyse specific exons

in a lymphoma cancer cell line (Albert et al

Nature Methods, 2007). The study demon-

strated the effective capture of exons with

high coverage of the targets.

Viruses and infectious diseases: The

throughput of 454 Sequencing has allowed

researchers to deeply analyse viral popula-

tions and identify viral subtypes. Recently

Simen et al. ( Journal of Infectious Disease,

2009) used ultra-deep 454 Sequencing to

identify low-frequency drug-resistant HIV

variants in patient samples. The study found

that mutations present at the one percent

level are likely to lead to premature failure of

treatment. Identifying these rare viral muta-

tions may ultimately enable prescription of

a more effective drug regimen and sophis-

ticated surveillance, based on an infectious

agent’s genetic characteristics.

Autoimmune diseases: In another recent

study, Nejentsev et al (Science, 2009) outline

a path from genetic association to the iden-

tification of protective and causative alleles

for type 1 diabetes, marking a key step for the

development of clinical applications based

on previously identified molecular markers.

The clinical setting: While there is still tre-

mendous progress to be made toward the

dream of personalised healthcare, current

medical research demonstrates the power

of the next generation sequencing and ge-

nomic enrichment technologies to uncover

the genetic basis of human disease. n

ASK THE EXPERT

Roche NimbleGen.indd 122 8/4/09 13:49:59

Roche.indd 1 8/4/09 13:23:00

The polymerase chain reaction (PCR)

has traditionally been optimised for

specificity and, to a lesser extent, prod-

uct yield. The speed with which the re-

action is completed has been of secondary

importance. The availability of software for

primer and PCR product design and the use of

reagents that can tolerate a range of reaction

conditions have allowed researchers to focus

on maximising throughput by minimising PCR

cycling times. Here we discuss the time savings

in fast PCR and fast quantitative PCR (qPCR)

that can be made by modifying thermal cycling

conditions and choosing appropriate enzymes

tailored for fast cycling.

Saving time during PCR andqPCR runs

Standard protocols for amplifying targets of

less than 1000 bp include several steps, each of

which can be modified to shorten overall run

times from about 90 minutes to less than 30

minutes.

Initial denaturation – When using an anti-

body-modified hot-start polymerase, both poly-

merase activation and initial denaturation can

be accomplished in 15-30 seconds at 98°C.

Denaturation while cycling – A one second

denaturation at 92°C is sufficient for various PCR

products. This is consistent with the observation

that temperatures above 92°C are unnecessary

for denaturing PCR products shorter than 500 bp

(Yap and McGee 1991).

Annealing and extension – Because most

polymerases are highly active in the tempera-

ture range typical for primer annealing (55-

70°C), the annealing and extension steps of a

PCR or qPCR protocol can often be consolidated

into a single shortened step. A 15 second com-

bined incubation can be sufficient for PCR prod-

ucts up to 500 bp. Furthermore, a combined

annealing and extension step at 60°C is typical

for qPCR assays using dye-based fluorescence

or dual-labelled probes.

Final extension – A post-PCR final incuba-

tion step of five to 10 minutes at 72°C is often

recommended to promote complete synthesis

of all PCR products, for visualisation on gels or

for cloning. We have found that this step can be

shortened to 30-60 sec for products up to 1 kb.

Number of cycles – Target DNA concentra-

tion is often unknown in PCR, and may be only a

few hundred copies per reaction. For this reason,

researchers usually prefer to run 30-45 cycles of

PCR despite the potential time savings of run-

ning fewer cycles.

Novel enzyme revolutionisesthermal cycling

Historically, PCR polymerases provided ei-

ther high fidelity or high processivity, but not

both. Now, using patented Sso7d fusion protein

technology, Bio-Rad has incorporated both

these parameters into a single enzyme: iProof*

high-fidelity DNA polymerase. This novel poly-

merase accurately amplifies a wide range of

DNA templates for use in various applications.

Sso7d gives polymerases a sliding grip on the

minor groove of the replicated DNA, dramatical-

ly increasing processivity without compromising

catalytic activity or enzyme stability. This tech-

nology improves speed, robustness, capacity of

synthesising longer products and tolerance of

PCR inhibitors.

In general, longer targets (above 1 kb) need

longer extension times, resulting in runs that can

last several hours. The extremely high proces-

sivity of iProof polymerase enables extension to

be completed more quickly with significantly

less enzyme than is required for other poly-

merases. Time savings of up to three-or-four fold

and increased reaction success have been ob-

tained with iProof DNA polymerase.

Sso7d fusion technology has also been in-

corporated into a supermix for use in fast real-

time qPCR – SsoFast EvaGreen supermix. The

unique combination of a fusion DNA polymerase

with EvaGreen dye and an optimised buffer sys-

tem delivers unrivalled speed and performance

for various qPCR applications, including high res-

olution melt analysis and direct PCR. This mix is

uniquely tolerant to PCR inhibitors, allowing qPCR

results to be obtained in less than 30 minutes.

We have described several ways to max-

imise the time savings in PCR and qPCR.

Portions of this article have been excerpted from

Fast PCR: Minimizing Run Times, Maximizing

Throughput, appearing in Volume 118 of Bio-

Rad’s periodical, BioRadiations. Please visit

www.bio-rad.com to download your copy of the

full-length article. n

Maximising throughput


By Kamni Vijay

ASK THE EXPERT

* U.S. patent 6,627,424.

Yap EP and McGee JO (1991). Slide PCR: DNA amplification from cellsamples on microscopic glass slides. Nucleic Acids Res 19, 4924.

Kamni Vijay is Marketing Manager

for Genomics at Bio-Rad

Laboratories. She directs product

development in the areas of PCR,

qPCR and emerging technologies.

She began her career in the life

science industry at MJ Research after

completing her PhD from the

University of California, Davis in 2001.

BIORAD ATE:mar09 08/04/2009 13:35 Page 124

BioRad.indd 1 8/4/09 13:11:07


Discerning whether the pharmaceutical supply chain

has been breached and investigating alleged cases is a

responsibility certainly not for the faint-hearted. Mick

Deats, Group Manager of Enforcement at the Medicines

and Healthcare products Regulatory Agency, is respon-

sible for sniffing out counterfeit medicines, and with many cases

becoming criminal investigations, it’s no easy task.

Through a recent series of advertisements screened in cinemas,

the MHRA, in conjunction with Pfizer and several patient associations,

aimed to raise awareness among the public of the risks of purchasing

counterfeit medicines. The World Health Organisation recently issued

statistics suggesting that up to 50 percent of medicines supplied from

websites that conceal their physical address are counterfeit.

The ad was aimed at persuading people not to buy drugs from

the internet or other dubious sources. The message was delivered

to the public through a very hard-hitting campaign –a man is seen to

cough up a rat, making reference to the fact that rat poison has been

found in the past in counterfeit medicines. As Deats explains, the ads

attracted a lot of interest. “We were pleased to see that hard-hitting

approach. It’s what was required. And when you look at other ad cam-

paigns that are trying to increase public awareness about risks, you

generally see that they have to be hard-hitting for you to remember

them, and this one certainly was. It was shown in cinemas to those 15

and above, which is our target audience.”

Vigilance is keyThe MHRA is a UK government agency responsible for ensuring

that medical devices and medicines work, and that they’re accept-

ably safe, which it does through a regime of licensing, inspection and

market surveillance. The agency is exceptionally vigilant and has an

intelligence group as its enforcement to tackle any allegations that

are made regarding medicine and the law.

“There are cases referred to us by members of the public, other

regulatory bodies, law enforcement, healthcare professionals, pa-

tients; there’s a whole range of ways that referrals are made into the

agency. In my particular unit, we receive around 1500 referrals a year,

which are assessed and a proportion of them will become criminal

investigations,” says Deats.

Discovery usually through reports to the agency, via members

of the public reporting suspicions, or reports from others working

within the supply chain. Onsite inspections have led to numerous

discoveries of counterfeit medicines, and once these have been

found, MHRA works quickly to protect public health by launching a

full and very detailed criminal investigation, with a view to prosecut-

ing those involved.

“We’ve run counterfeit hotlines here, and there are methods for

people reporting any suspicions through our website. We’ve seen

numbers rise due to people’s awareness increasing. We always en-

courage that. If people are suspicious about their medicines then it

can always be reported to us very easily from the front page of our

website or on the phone to a counterfeit hotline,” explains Deats.

Organisational structureThe MHRA is made up of 10 divisions, with approximately 900 staff;

45 of whom make up the enforcement group. Every European country

Pest control

COUNTERFEITS

How an image of a man coughing up a rat can help protecting the public and pharmaceutical companies against counterfeit drugs.

counterfeit-deats.indd 126 8/4/09 13:42:53


has a medicines agency, but the UK is quite unusual in terms of the

enforcement and intelligence group being substantially larger.

“Counterfeit medicines in Europe, but specifically in the UK, arrive

in two different ways. Firstly, and most commonly, it’s through unregu-

lated internet websites that could be hosted anywhere in the world,

who make their products available to any-

body in Europe or in the UK.

“The less common way of counterfeits

reaching patients is through the regulated

supply chain, and that’s through licensed

wholesalers and pharmacies. Fortunately,

that is a very rare occurrence, but never-

theless, since 2004, it’s led to nine recalls

of medicines here in the UK. There’s a high

degree of confidence in the medicines you

obtain from a pharmacy. So anything that

damages that confidence is a really bad

thing to occur,” he says.

The MHRA focuses much of its attention

on the counterfeits trafficked through inter-

net supply. However, with the internet being

completely open and continuing to expand,

this is no easy task, and the difficulty of

defining the lines of jurisdiction adds to the

already existing problems.

“If the websites are hosted in the UK

or the medicines are being supplied from

within the UK, that brings it within our juris-

diction, which we can investigate. If neces-

sary we can prosecute the case, which we

have done on a number of occasions. But

if the website is hosted elsewhere in the

world, then it’s not within our jurisdiction,

and so we pass that information to the rel-

evant authorities. It’s up to them as to what

action they take.

“It’s a challenging area. Our focus is

to give the public sufficient information to make an informed choice

as to whether it’s a good idea to be obtaining your medicines from

unregulated websites, which is why we’ve begun the advertising

campaigns.”

Legitimate leaksAnother increasingly worrying issue is the potential for counterfeit

medicines to infiltrate into legitimate supply chains. “We’ve seen it

happen in the past, where unlicensed traders or brokers are feeding

counterfeit medicine into people who are authorised to trade in medi-

cines in the supply chain. These traders have either been duped or

turned a blind eye, or are criminally involved and knowingly inserting

that into the supply chain for profit,” explains Deats.

“We tackle that type of thing firstly by taking steps to ensure that

the product is seized or quarantined and prevented from getting out

to market. However, if it has got out to market, that’s when we con-

sider issuing a recall notice and getting it back and getting it taken off

the shelves.”

How can companies protect themselves against fake drugs making

their way into the supply chain? Deats explains that most of the large

drug companies have security departments that are devoted to tack-

ling those people that are infringing

their intellectual property rights. This

often leads to an overlap between

intellectual property rights issues and

public health issues. However, the

MHRA does not function to protect

brands, but solely public health, unlike

pharmaceutical companies, who can

also seek to protect their brands.

This angle of brand protection ena-

bles prosecutions from investigations

to be carried out using a combina-

tion of medical, intellectual property

and money laundering legislation, to

ensure the courts have a full report of

the criminal activity with which to pass

the sentence.

“It allows the court to deal with

the case in an appropriate manner. The

maximum sentence under the medi-

cines act is two years in prison with

unlimited fine. The maximum sentence

under trademark legislation is 10 years,

and under money laundering it’s 14

years. So we don’t restrict ourselves

by purely dealing with them under the

medicines legislation.

“The European Commission and our

agency have just completed the public

consultation process on measures to

tighten the supply chain, and part of the

recommendations of this are the need

for specific criminal offenses to tackle counterfeit medicine, because

at the moment we rely on Medicines Act legislation. This doesn’t carry

the type of penalty that you need to deter people controlling multimil-

lion-euro organisations, importing medicine from the other side of the

world and infiltrating it into our supply chains.

“Obviously, we’re keen to get the message out about public

safety and the risks attached to obtaining your medicines from the

internet. We would always advise people to have a face-to-face con-

sultation with a healthcare professional and obtain their medicines

with a prescription.

“As far as the internet’s concerned, we’re very keen to get the mes-

sage out to the public because the internet wasn’t originally designed

to be regulated, and because of its global nature, it’s extremely dif-

ficult to deal with. The people that run these operations realise that it’s

a wise move on their behalf to host their websites in countries that are

difficult to do business with.” n

“Current legislation doesn’t carry the type of penalty you need to tackle people

dealing in multimillion-euro organisations, importing

medicine from the other side of the world and infiltrating it

into our supply chains”

counterfeit-deats.indd 127 8/4/09 13:42:55

In a recent publication, Maurel et al* pre-sented the combination of Cisbio’s HTRF

and Covalys’ SNAP-tag technologies to

specifically address cell-surface protein-pro-

tein interaction. In this study, an application

for GPCR oligomerisation is accurately docu-

mented and the advantages of this new ap-

proach presented.

Today, Cisbio introduces a comprehensive

reagent platform developed with this combi-

nation of technologies. This offer is based on

the expression of a fusion protein between the

external position of the 7-transmembranaire

fragment (7TM) and a SNAP-tag (20 kDa).

Streamlined for highly selective ligand binding

and receptor dimerisation assays, this rapid

and non-radioactive platform will meet needs

for a comprehensive investigation of receptor

network signalling, and will preserve the func-

tionality of the receptor and the intracellular

signalling pathway.

GPCRBeyond thewide variety of classes of GPCR

and drugs, signalling pathways induced by the

specific receptor ligand binding receptor are

ubiquitous. The GPCR signalling network is a

cascade of intracellular events that serve as

models for the development of functional tests.

It is admitted today that a proper understanding

of the drug action mechanisms and the activa-

tion of this signalosome requires the implemen-

tation of cell-based assays covering receptor

binding, second messenger accumulation, or

more downstream assays such asMAPK activa-

tion pathway, with the measurement of ERK

phosphorylation or desensitisationmechanisms

involving beta arrestin.

SNAP-tagSNAP- & CLIP-tags are fusion proteins de-

veloped by Covalys. Those tags can be consid-

ered as suicide enzymes that specifically and

covalently combine to their substrates, respec-

tively benzyl guanine andbenzyl cytosine. These

substrates can be derivatised with HTRF part-

ners such as terbium cryptate (Lumi4-Tb) and

green or red derivatised acceptors.

Once transfected into thecell, aplasmidcon-

struction developedwith the appropriate pSNAP

or pCLIP plasmid and the gene of the GPCR of

interest leads to expression of the GPCR as a

fusion protein with the SNAP- or CLIP-tag pro-

tein (Fig. 1).

In their study, Maurel et al describe the si-

multaneous dynamic localisation of het-

eromeric and homomeric receptors at the cell

membrane surface. As mentioned by the au-

thors, this new technology is an alternative to

existing bioluminescence resonance energy

transfer (BRET) and FRET assays. The combi-

nation of SNAP-tag and HTRF technology re-

sults in particular features sought for the study

of cell surface receptors.

In addition the tag-substrates developed

by Cisbio are non-permeant and therefore

specifically label cell surface proteins with the

appropriate HTRF-compatible fluorophore. In

fact, no fluorescence resonance energy transfer

(FRET) can occur within intracellular compart-

ments where proteins accumulate during GPCR

internalisation ormaturation process.

Finally, those substrates are chemically inert

for other proteins, avoidingnonspecific labelling

in themembrane labelling.

With this new HTRF-based cell-surface re-

ceptor platform, Cisbio provides reagents and

technology to address the latest evolution in

the GPCR drug discovery field. Applications to

highly selective and non-radioactive ligand

binding assays are described and the 7TM

dimerisation model can properly be investi-

gated with streamlined and specific cell-sur-

face tools. �

New HTRF cellular platform


Jean-Luc Tardieu has been productmanager at Cisbio Bioassays in Bagnols-sur-Cèze, France, since joining thecompany in 2004. He earned his PhDfrom the Technology University ofCompiegne (UTC), France.

JEAN-LUCTARDIEU

pSNAP +1

Gene ofGPCRX

pSNAP-GPCRX

2

*Maurel et al, Nat. Methods 5, 561-567 (2008) Cell-surface protein-protein interaction analysis with time-resolved FRET and SNAP-tagtechnologies: application to GPCR oligomerisation.

ASK THE EXPERT

Reagents and technology to address the latest evolution in the GPCR drug discovery field.

Fig 1: Fusion of GPCR X with SNAP-tag in N-term position. The first step consists of creating aplasmidic construction encoding for both the receptor and the labelling tag. Then, thisconstruction is used to transfect the cell host.

Cisbio Bioassays ATE:13sept 8/4/09 13:41 Page 128

Cisbio.indd 1 8/4/09 13:13:02


A new PeT imAging AgenT

agent 64Cu-DOTA-bevacizumab is able to serve as the next genera-

tion of PET imaging agents in preclinical cancer drug research in the

following directions.

Tumour growth: The new imaging agent could help researchers detect

and observe the growth of tumours located at greater depth in the

body and offers better sensitivity and diagnostic imaging contrast.

Estimate tumour size: According to our results, bevacizumab imaging

offers clearer contours of the tumours than other probes. With

appropriate image analysis and experiment design, it could help

researchers estimate the size of tumours and further monitor the

therapeutic effect of certain treatments.

Observe angiogenesis-related events: The release of VEGF is strongly

related to angiogenesis. 64Cu-DOTA-bevacizumab can provide

information about distribution and change of VEGF at different time

points. Furthermore, this information can be used for evaluation of

the functional effect of other anti-angiogenesis drugs. Also, it can

tell the researcher which part of the tumour is actively undergoing

angiogenesis at a specific time point. VEGF is related to hypoxia and

inflammation as well. Therefore, this probe may be used to obtain

indirect indication of hypoxia and inflammation.

Evaluate other anti-cancer drug candidates: It could offer information

on the percentage of the total injection dose of bevacizumab

accumulated in a tumour and in other organs as a contrast. The

pharmacokinetics and distribution of bevacizumab in the tumour

could be revealed by dynamic PET imaging. The same imaging strategy

can be used to evaluate the pharmacokinetics and distribution of

other anti-cancer drug candidates, such as antibody, aptamer, siRNA,

hormone, peptide and oligonucleatide.

64Cu-DOTA-bevacizumab can be used as a

tumour diagnostic agent by PET imaging in pre-

clinical research on animal models. The radiola-

belled tracer as a new imaging agent is highly

sensitive in pancreatic, breast and lung cancer

animal models, and possibly in other types

of solid tumour animal models. The tumour-

tissue contrast and in vivo bio-distribution are

superior to the current clinical standard 18FDG

imaging in tumour animal models. n

For more information, please visit www.mpiresearch.com

INDUSTRY INSIGHT

A new imaging agent, 64Cu-DOTA-bevacizumab, has been developed for scanning of tumor growth and functional imaging of angiogenesis in animal tumor models.

The new agent gives a much clearer and more precise image

than existing methods (18FDG). This discovery has the poten-

tial to revolutionise preclinical cancer research and possibly

clinical practice of cancer diagnosis.

Tumour imaging New drug discovery generally spans 10 to 15 years. To develop

novel drugs more quickly and cost-effectively, many new technologies

have been used, including multi-modality imaging techniques. Posi-

tron emission tomography (PET) is a noninvasive imaging technique

that provides a means to obtain information about drug behaviour

and functional efficacy during drug development.

PET is used extensively in both preclinical research and clinical

practice of cancer diagnosis and therapy. In the past two decades,

hundreds of articles have been published on cancer drug development

in the field of therapeutic PET imaging of cancer patients and preclini-

cal cancer research on tumor animal models. The articles focus mainly

on the gold-standard imaging agent 18FDG (fluoro-18-deoxy-glucose),

which monitors the metabolic functional change of tumours. In recent

years, tumour angiogenesis imaging has drawn a lot of attention to

anti-angiogenic drug development.

Angiogenesis is a fundamental process in which a growing tumour

creates its own blood supply by forming new blood vessels around

tumour tissue. Bevacizumab is an antibody that targets vascular

endothelial growth factor (VEGF), a signalling protein released by

tumour cells, and plays an important role in angiogenesis. VEGF-relat-

ed angiogenesis is a nearly universal phenomenon for most types of

solid tumors. Currently, bevacizumab is being used to treat patients

with advanced colorectal cancer and is being tested in several other

metastatic cancers.

Based on our preliminary imaging results, the new imaging

Zheng ‘Jim’ wang has more than 12 years of experience in molecular imaging research and nuclear medicine. He was an assistant professor at the University of Texas Health Science Center at San Antonio and is currently the Director of Molecular Imaging at MPI Research.

MPIResearch.indd 1 8/4/09 13:20:14

Thepharmaceuticalmarket is changing fast

and industry has been required to move

quickly to keep pacewith this dynamic sit-

uation. There is, however, a lot of work still to be

done, with only 30-60 percent of common drug

therapies being successful and up to seven per-

cent of hospital admissions in the US due to ad-

versedrugreactions,manyfatal.Thetrialanderror

approach applied to drug treatments is no longer

aviableoption for the industry, formedicalpracti-

tioners, for healthcare payors or for patients.

Biochip array technology (BAT) now offers rapid

genetic screening in amultiplex array, to facilitate

thedrive towardspersonalisedhealthcare.

One of the key breakthroughs in the post-

genomic era is the realisation that small genetic

changes can greatly increase an individual’s risk

of developing disease, or can influence their re-

sponse to therapy. This has led to the rapidly ex-

pandingfieldof pharmacogenetics. All themajor

pharmaceutical companies are now conducting

research in this exciting arena and are applying

this to all facets of their work, from drug discov-

ery to companion diagnostics.

This is reflected in the increase in thenumber

of submissions to the Food and Drug

Administration (FDA)andtheEuropeanMedicines

Agency(EMEA) involvingpharmacogenetics.There

areanincreasingnumberofapproveddrugsonthe

market, including tamoxifen, warfarin and 5-fluo-

rouracil, which strongly recommend companion

geneticprofilingtestsbefore treatment. It isenvis-

aged (and included in FDA guidelines) that phar-

macogeneticswill becomeastandardcomponent

in drug development in the near future.

Pharmacogenetics testing is currently ap-

plied to preclinical investigations of biomarkers

for drug response or drug-induced toxicity, in-

cluding identifying genes with variations that

may identify sub-populations. It is being applied

to phase I studies to explain outliers or inter-pa-

tient variability, to stratify patients into response

groups andphase II and III studies to exclude in-

dividuals at risk. This allows the development of

drugs for specific patient groups with differing

clinical genetic profiles.Where newpathways or

metabolic influences are discovered, itmay lead

to the re-investigation of previously faileddrugs,

if a genetic influence can be established. This

will identify niche therapies, adding value to the

pharmaceutical back catalogue.

Conversely, poorly metabolised drugs may

notbenefit thepatient in themanner requiredand

accumulate to toxic levels, leading to an adverse

patient reaction.Determiningthegeneticprofileof

theenzymesknowntoinfluencemetabolism,such

as the CYP450 gene family, can, in combination

withtraditional indicators,suchasage,weightand

disease severity, facilitate the correct dose of the

rightdrug thatmost suits theneedsof the individ-

ualpatient.This is the foundation for trulyperson-

alisedmedicineandiswherescreening forSNPs in

CYP450 genes canmake a profound difference to

clinical treatment and prognosis.

Genetic testing can follow threemain path-

ways; predisposition screening, early detection

throughpopulation screening andpharmacoge-

netics, with dual-purpose markers. An example

of how Randox BAT can provide a combined ap-

proach for clinical solutions is the diagnosis and

treatment of colorectal cancer (CRC).

RanplexCRC is a mutation detection assay,

utilising biochip array technology (BAT) that can

detect CRC at a pre-malignant stage, enabling

rapid and effective treatment regimes. This fae-

cal DNAmultiplex assay looks for 28 mutations

in four genes known to be associated with CRC

(APC, KRAS,BRAF andTP53). Detectionof anyof

these mutations will indicate the presence of a

pre-malignant ormalignant lesion in over 70per-

cent of CRCs. KRAS mutations may also deter-

mine whether the patient will respond to

anti-EGFR therapy, a treatment commonly given

toCRCpatients.MutatedKRASgeneshavebeen

found in 40 percent of metastatic CRC, so this

percentage of patients may receive anti-EGFR

therapy unnecessarily, unless a primary screen

has been conducted.

Utilising Randox’s award-winning biochip

array technology,weareworking closelywith in-

dustry experts to develop custom SNP arrays,

both for predisposition screening and drug me-

tabolismprofiling. Randox provide protein, DNA

andRNAdiagnostic solutionswith clinical levels

of evidence onplatforms that can accommodate

basic research (investigator), high throughput

clinical screening (evidence) andnear-patient di-

agnosis (multistat). Thewell-established princi-

ples of the assay and test platforms ensure a

rapid development time, so assays can quickly

be customised to suit the needs of pharmaceu-

tical testing or service laboratories. �

A revolution in personalised medicine


How biochip array technology is transforming pharmacogenetics.

INDUSTRY INSIGHT

Martin Crockard is a molecular

biologist with a role in both R&D and

business development at Randox.

Research interests include the

development of prognostic expression

arrays for breast and ovarian cancer

and SNP profiling for predisposition

and companion screening for cardiac

diseases and cancers.

For more information, please contact [email protected] orvisit www.randox.com.

“Small genetic changes cangreatly increase an individual’srisk of developing disease”

Randox ed:13sept 8/4/09 14:44 Page 132

Randox.indd 1 8/4/09 13:21:31

With only 18 NCEs approved in 2007,

and an average cost of developing a

single NCE now exceeding $1 billion,

the pharma R&D model is arguably unsustain-

able in its current form. In comparing the pro-

ductivity of the industry over the last several

decades it is useful to consider the evolvingdrug

discovery paradigm during this period. Within

the last 20 years the drug discovery paradigm

has increasingly embraced a central dogma for

discovery that is recognised today as ‘target-

basedmedicinal chemistry’.

Central to this paradigmare thewell-recog-

nised and structured stages of early drug dis-

covery, including target identification, high

throughput screening, and lead optimisation

efforts. Prior to this period, the industry dis-

covery paradigm was not as well organised

and much more subject to serendipity.

Contrary to widely held expectations, themod-

ern paradigm has delivered the lowest rate of

new drug approvals in a generation.

It is important to note that target-based

drugdiscovery is a hypothesis-based approach.

These hypotheses have their origins in an exist-

ing collective knowledgebase thatwemust now

accept is incomplete. Although the post-

genomics era heralded thediscovery of a pletho-

ra of ‘new’ molecular targets, there remains a

very poor understanding of the spectrum of bi-

ology influenced by any given target. For any

given protein receptor, for example, our under-

standing of the biochemical pathways does not

begin to describe the complex interactions in

that pathway that may be biologically relevant,

neither is there a complete appreciation of the

putative target’s influence on intersecting path-

ways. This statement is certainly true in a simple

cell-based system, yet the complexity of these

interactions rises exponentially when we con-

sider a fully assembled organism.

In a pharmaceutical R&D environment this

biological complexity, and associated incom-

plete knowledge, manifests itself in the high

attrition rates associated with drug develop-

ment. It further reveals itself in the form of un-

expected beneficial effects such as the

analgesic properties of the gabapentinoids in

neuropathic pain and the many pleiotropic ef-

fects of the statins.

Melior Discovery proposes that, in consid-

eration of the limitationsof the current industry’s

central dogma, the existing pharma discovery

paradigm needs to be supplemented with a

complementary strategy that offers the poten-

tial tomore rapidly and efficiently identify alter-

native beneficial activities. Given the apparent

limitations of target-baseddrugdiscovery, there

is a compelling rationale for an approach that is

not constrained by the aforementioned knowl-

edge gaps.

Melior Discovery has developed a platform

for the optimal phenotypic screening of large

numbers of compounds. TheraTRACE is com-

prisedof approximately 40animalmodels of dis-

ease representing a very broad therapeutic area

spectrum. Normally, the proposition of screen-

ing a compoundacross 40 sophisticated animal

modelswould bedeemed impractical. However,

the company has succeeded in making the

largely impossible, possible by developing a

means to ‘multiplex’animalmodelwithout com-

promising the quality of the underlyingmodels.

By taking therapeutic candidates and system-

atically screening them across 40 models of

disease, Melior has adopted a form of non-hy-

pothesis-driven drug discovery. Only in this

way is it possible to uncover otherwise truly

unpredicted biology associated with a com-

pound. Further, by screening in clinically rele-

vant preclinical models of disease, this

approach uncovers the most salient unpre-

dicted biology as opposed to generating less

useful phenomenology.

Very often, the unexpected biology is of

therapeutic relevance andhas been the basis of

Melior’s drug repositioning efforts. Indeed, in a

relatively short time, the company has built its

own pipeline of therapeutic candidates reposi-

tioned from a library of drug candidates previ-

ously developed for other indications.

Increasingly, pharmaceutical companies are

adopting this approach and partnering with

Melior in order to profile discontinued com-

pounds aswell as preclinical candidates in order

to fully explore the pharmacological fingerprint

of compounds destined to enter the clinic. �

A new model for drug discovery


The productivity crisis in pharmaceutical drug discovery, or ‘innovation gap’ as it has been coined,is well recognised and the subject of much debate in the industry and spectator commentary.

INDUSTRY INSIGHT

Andrew Reaume, is President and

CEO of Melior Discovery, Inc.,

which he co-founded in 2005 with

Michael Saporito. Prior to Melior,

Reaume held positions of

increasing responsibility at Pfizer

Global Research and Development.

Reaume received a PhD in

genetics from the University of

Connecticut and an MBA with

honours from the Wharton School.

“The existing pharmadiscovery paradigm needsto be supplemented with acomplementary strategy”

Melior Discovery :13sept 8/4/09 13:56 Page 134

Melior.indd 1 8/4/09 13:19:39

As we continue stumbling through

times of uncertainty and despon-

dency, the call for transparency and

accountability has been height-

ened throughout society, from

politicians who don’t pay their taxes, to over-the-

top executive bonuses. The same is true for the

coordination of marketing in the pharmaceuti-

cal industry, as the power of patient desire for in-

formation is determining the way in which

pharmaceutical companies operate.

“Patients have become much more aware

of and assertive in finding information about

their disease and their treatment options,” says

Isabelle Mercier, VP of Marketing at Millennium.

“What’s changing, from a marketing perspec-

tive, is the way in which we provide additional in-

formation and insights to the patients, allowing

them to become more informed and educated

about their treatment options.

“From a marketing perspective, we have to be

prepared to engage them differently: traditionally

it’s been more the healthcare team being the con-

duit of information to the patient, but increasingly

you hear of the patient coming in with printouts

from the internet, with information they heard on

the radio or saw on TV, demanding more from their

healthcare team. We as a pharmaceutical compa-

ny have an opportunity to play a role in educating

patients, which is probably the most striking

change in the pharmaceutical marketing.”

More responsibilityPharmaceutical companies are now facing

the responsibility of providing patients with

treatment information and must take on a

more informative role than they have previ-

ously. “The most relevant trend is that of de-

mand for full disclosure of information, which

is becoming more stringent. That full disclo-

sure is an opportunity for the pharmaceutical

company to enhance the understanding of the

treatment options and/or the particular ther-

apeutic option that the pharmaceutical com-

pany has to offer,” says Mercier. A greater role

of responsibility, if seized upon with an oppor-

tunistic approach, can allow for pharmaceuti-

cal companies to approach healthcare with an

element of creativity as it provides more valu-

able and insightful information.

In her new role as Vice President of

Marketing, Mercier will be leading and develop-

ing the US and global marketing strategy for the

commercialisation of late phase development

products, along with oncology market products.

“Millennium is specific to oncology and has a vi-

sion of developing and delivering first class ther-

apeutic agents, aiming to offer more patients

across the globe new innovative therapeutic

agents to advance cancer care.

“When you look at the portfolio of pipeline

agents, the late phase products, as well as cur-

rently marketed products, are either best or first

in class, which speaks volumes to the engage-

ment that Millennium has. This is done from a

scientific perspective of understanding the spe-

cific mechanisms that lead to cancer genesis

and targeting the ones that are the most rele-

vant to counter that cancer development, pro-

viding that option to offer more patients

treatment across the world.” It is global visions

such as this that provide the company with its

methods for branding.

Millennium’s approach to branding is very

different to that of other pharmaceutical com-

panies. As their entire focus is cancer care, the

link between the product and the company vi-

sion is inherent. “Due to the fact that we are

solely focused on cancer care and interested in

serving the patient with high level science ther-

apeutic options, that potential conflict between

corporate branding and actual therapeutic

agents is not an issue here at Millennium, which


Patient powerMillennium’s Isabelle Mercier tells NGP about therising power of patient influence and marketing’sdelivery of information demand.

MARKETING

“Patients have become much moreassertive in finding information about their

disease and their treatment options”

MERCIER:apr09 08/04/2009 13:47 Page 136

it makes it a unique organisation from that per-

spective,” says Mercier.

“If you think of the larger pharmaceutical

companies, the struggle they always find them-

selves facing is due to them not focusing on a sin-

gle therapeutic area: on a single disease, or

disease state. Since every cancer is different from

each other, they do face an identity barrier be-

tween the therapeutic options they offer and their

organisation as a whole. As a specific oncology

company, Millennium is a therapeutic agent en-

tirely dedicated to advancing cancer care, and

therefore we avoid that identity barrier.”

Strategic decisionsAs a company that has demonstrated how

to successfully build a corporate brand, Mercier

advises that it is the strategic decisions the com-

pany has made that allowed them to success-

fully project a specific image. “Branding is a

question of what the company wants to be

known for. We want to be known for having the

ability to take high-level science and transform

it into therapeutic options for patients, and we

have already demonstrated this through cur-

rently marketed products, such as the delivery

of Velcade. So the concept of bringing science

from the bench to the clinic is something that’s

very familiar to us.

“Other organisations tend to identify them-

selves more as pharmaceutical companies and

do not necessarily have that sort of predefined

identify of being a pharmaceutical company that

is known for its science. We have transitioned al-

ready from that perspective because we are fo-

cusing on cancer care and stated this by naming

ourselves as Millennium, the Takeda Oncology

Company,” says Mercier.

As Mercier explains, the development of

marketing strategies is not about to change in a

dramatic way, both for the industry and

Millennium itself. “Understanding to a greater

extent your customers, understanding their

needs, their wish lists, and designing and as-

sessing how you can address those needs and

wishes is what is subject to change.

Specialised approach“What will evolve is the development of per-

sonalised medicine, especially in cancer care.

It’s a significant trend, so from a pharmaceuti-

cal company perspective our need is to be laser-

focused on the disease, on the customer and on

the patient, and the positioning of a brand will

need to be there to address those needs. We’re

going to take even more of a specialised, cus-

tomised approach, just like medicine is evolving

in that direction.

“A specialised approach is going to involve

targeting specific diseases with specific charac-

teristics, avoiding the over-treating of patients

that probably would not benefit from the thera-

py, and instead providing maximum benefit with

balancing the risk associated with any thera-

peutication for a better defined group of pa-

tients and/or diseases that your therapy might

be best suited for.”

Such marketing techniques of specialised

products and focusing on the development of per-

sonalised medicines have certainly benefited

Millennium’s branding, as it continues to align its

strategies on cancer care. “This is a tremendous

opportunity for Millennium to be part of the trans-

forming of cancer care into a chronic disease. The

evolution of cancer survivals have made great

strides in the past ten years; there’s a lot more to

be done and certainly we are very much engaged

in being part of making that happen and serving

the patients.” n


Millennium Pharmaceuticals, Inc., was established in 1993 as a genomics

company applying world-class recombinant technology to the discovery and

development of innovative new therapies in a broad spectrum of diseases.

Millennium has since grown into a fully integrated biopharmaceutical company

with a pipeline of investigational drug candidates, as well as a commercialised

medicine derived from Nobel Prize-winning science that is now approved in more

than 87 countries worldwide.

In 2005, the company's leadership changed as Founder Mark Levin turned the

helm over to Deborah Dunsire. For the next several years, significant refocusing

and reconfiguration took place within the company, as well as improvements in

the scale and strength of its commercial operations.

In May 2008, Millennium was acquired by Takeda Pharmaceutical Company

Limited. Takeda is the largest pharmaceutical company in Japan, and a global

enterprise with an important presence in key markets.

Millennium now operates as an independent subsidiary, serving as the global

center of excellence in oncology under its new name: Millennium: The Takeda

Oncology Company.

MILLENNIUM HISTORY

MERCIER:apr09 08/04/2009 13:47 Page 137


The role of the payor in determining treatment paradigms for pa-

tients is growing globally. ‘Payors’ are those who manage the

cost of healthcare, and they are under increasing pressure to

balance the budgets in the long and short term. Their decisions are

therefore infl uenced by a range of health economic arguments, which

presents a more complex perspective of the cost: benefi t ratio.

In the US healthcare system, the managed care marketplace rep-

resents a key payor sector that wields a signifi cant level of clout in

the healthcare landscape and has changed the dynamic between care

organisations and pharmaceutical suppliers. As the impact of man-

aged care’s growth continues to unfold, questions about how phar-

maceutical companies approach and sell to this channel have become

increasingly important to drug companies’ bottom lines.

This phenomenon is not new however. For years, drug companies

around the world have struggled with exactly how best to approach

payor audiences. With sustained pressure to moderate healthcare

costs, payors, particularly those that manage large populations,

remain a critical audience, if for no other reason than the potential

for volume selling. For many drug makers, however, a number of fac-

tors are contributing to the unstable nature of selling to such groups.

In the US, these factors include the second year of Medicare Part D

programs, rapid generic substitution rates and possible increased

political pressure from the change of political control within the US

Congress.

In the UK, with a 60-year history as the world’s largest nation-

alised healthcare system, the NHS provides a full-scale example of

the reliance of payors on robust data and information when making

decisions about access to drugs. The National Institute for Health and

Clinical Excellence (NICE) determines what drugs will be funded by

the NHS based on the same safety and effi cacy information used by

national health systems around the world, but with additional require-

ments to prove cost-effectiveness.

NICE guidance has indisputable power in determining which

treatments the NHS ultimately includes in the formulary. Pharma

companies selling to managed care organisations in the US and other

payor groups across the globe will increasingly have to use similar

standards of evidence. They must then ensure that their sales forces

are equipped to succeed within a complex environment with multiple

stakeholders, potentially with different roles being applied across the

life cycle of a product.

As payors gain increasing power over access to medicines, Justin van Gennep examines their particular priorities and explores how to address their needs for the benefi t of the patient.

KNOCKING ON A DIFFICULT DOOR

INDUSTRY INSIGHT

Innovex.indd 138 8/4/09 13:58:31


Justin van Gennep, serves as Senior Vice President and Head of Innovex for Europe, Middle East and Africa. He joined Quintiles/Innovex in 1998 as Managing Director for Innovex and Quintiles in Germany and possesses more than 25 years of experience as a business leader in the pharmaceutical industry.

A complex environment The increased presence of organisations charged with ‘gate

keeping’ access to care is an example of the more complex selling

environment that pharmaceutical sales reps can face. To make their

decisions, payors are now demanding more robust information from

pharma, including data on the long-term cost impact of medicines and

treatments, which highlight the health and cost benefits over the long

term, rather than just considering the unit cost.

Also, evidence of disease prevention is being used, such as the

prevention of co-morbidities in chronic diseases (diabetes, cardiovas-

cular disease and obesity), and real-world data to support the safe and

effective use of pharma products across the general population. Payors

are also using ongoing product value demonstrations, so that following

initial pricing approval, many regional and local payors will look for data

to support continued availability of products on formulary.

The need for value Healthcare providers and payors are thus focusing increasingly

on value and health outcomes, preferring to fund and prescribe medi-

cines that are supported by a wealth of ‘real-life’ data. As a result, the

pharmaceutical industry must ensure its offerings are closely aligned

with these desires and needs; in short, to help gatekeepers allocate

resources equitably and efficiently.

In Spain for example, it is a requirement of regulators that pharma

companies prove the favourable economic profile of new drug treat-

ments. In addition, they must deal with autonomous regional health

authorities and it is therefore essential that they establish solid and

transparent alliances with these regional governments and back up

their claims with real data obtained with clinical practice.

Safety and efficacy data that support new entrants into established

product classes will need to be not only stronger, but more comprehen-

sive – requiring developers to collate real-world patient information for

regulators on a continual basis. The influence over prescribing deci-

sions of proven outcomes and established tolerability is set to surpass

even the industry’s most powerful branding activities.

Health technology assessment too is developing, placing greater

emphasis on the broader value contribution that a medicine makes

to healthcare and society (i.e. evaluating its budgetary impact over

the longer term and taking into account the benefits supplementary to

direct treatment, such as reducing hospital admissions and prevent-

ing exacerbations).

In the UK, NICE is consulting over its future expansion – in size

as well as in scope, giving more weight to a medicine’s broader value

contribution. Many health authorities are looking to what is happen-

ing in the UK as they do develop methods of controlling and managing

healthcare.

Key to success The key to successful pharmaceutical sales within the payor

market is in the ability to offer something more than a volume dis-

count on the product itself. Because pharmacy directors and medical

directors often are responsible for both clinical and fiduciary respon-

sibilities, pharmaceutical sales representatives increasingly seek new

ways to bring additional value to the table. Of course, this requires a

team of people who have good understanding of the market and the

considerations that are important to payors.

For pharmaceutical sales organisations, the issue comes down in

large part to the complex mechanisms used to determine the ultimate

relationship between physician, payor, patient and product. For a

pharmaceutical manufacturer, the ability to place a product in the first

or second line of a payor’s formulary can mean the sales equivalent of

life or death. However, in order to achieve this placement, a broader

focus and more seasoned sales experience is usually required.

In some parts of Europe, payors are looking into new pricing

strategies such as pay for performance or risk-sharing. In both cases,

pharmaceutical companies will need to prove – in real-world scenarios

– that their drug or treatment works effectively and efficiently, either

to get a better price for the product or to continue to be listed on

the formulary. Patient-centric programmes can be designed to both

support the delivery of such information and help to better manage

chronic diseases by identifying patients and treating risk factors

early. Such programmes, managed by an independent organisation

such as Innovex, can also provide the all-important real-world clinical

data that – owing to strict regulations governing their relations with

patients – pharma cannot collect on its own.

One example that can be used is in diabetes: programmes de-

signed to identify uncontrolled diabetes patients can provide clear

benefits to all. Patients benefit from improved understanding of the

disease and its treatment, increasing therapy adherence and improv-

ing quality of life. Physicians gain improvements in their relationships

with patients, better health outcomes for their patients, and a better

understanding for practice staff in how to run patient identification

programmes in the future. For payors, the benefit is in preventing the

cost burden of treating co-morbidities associated with uncontrolled

patients, whose symptoms are inevitably worse, and treatment there-

fore more expensive, when left undiagnosed or untreated.

With payors becoming such a significant stakeholder in determin-

ing what drugs patients can access, and their increasing reliance on

data and real-life evidence in decision-making, the sales process for

these organisations requires a more consultative sell. It is essential to

have good understanding of and the ability to respond to the unique

and complex concerns of payors to be successful in this new era of

pharmaceutical sales. n

Innovex.indd 139 8/4/09 13:58:33

INNOVEX AD:euro 8/4/09 14:04 Page OBC1


A term first used by former US Sena-

tor Lloyd Bentsen, astroturfing has

come to be known as the imitating

or faking of popular opinion or be-

haviour. Within the pharmaceutical industry,

it is the name given to the behind-the-scenes

funding of prominent patient representative

groups by some pharmaceutical companies.

Such close-knit relationships between

drug companies and patient groups throws

the integrity of both parties into question.

But should the drug firms bear the brunt of all

the negative press, or should patient groups

be dealt just as much responsibility for ac-

cepting their funding?

There are very few patient groups that

are transparent about funding: how much

they get and how they arrived at that figure.

Non-profit organisations are not required by

law to outline the sources of their funding or

how much they may be storing in their kitties.

It’s only through careful examination of tax

returns and annual reports that detailed fig-

ures can be arrived at.

As representatives of those affected by

certain diseases, the function of patient groups

is to offer support to the public, with the pa-

tients as their primary concern, campaigning

for treatments and sitting on advisory commit-

tees. Although some patient groups are large

and powerful, many are small and are subject

to the financial and lobbying restrictions. For

those with little or no lobbying power and only

a small membership in tow, there is a perhaps

understandable temptation to accept the read-

ily available funds from pharma companies

to help fund their activities and prolong their

existence.

And why shouldn’t the drug companies

seize upon these opportunities? They are look-

ing to make a profit like any other business; their

stock price will always be among their primary

concerns. By filtering their marketing message

into patient groups, drug firms can reach the

public in a very effective way. The problem

with this being that so many people place their

trust in the groups they believe are represent-

ing them, and have limited awareness that a

group’s agendas and actions may be influenced

by its ties to a pharmaceutical company.

The timing of the donations is often care-

fully planned by the drug companies to coincide

with their marketing strategies. For example,

Pfizer was a major fund provider to the Restless

Leg Syndrome Foundation in 2003 and 2004.

However, after the company announced plans

to stop manufacturing its candidate RLS drug

in July 2004, all donations to the patient group

stopped.

InfluenceA study undertaken by the New Scien-

tist magazine in 2007 to investigate the

extent of influence by drug firms on patient

groups attempted to find out exactly how

many dollars were being used to buy mar-

keting power. In certain cases, the donation

funds were huge; the American Heart As-

sociation, for example, was found to have

received more than $23 million (17€ million)

from drug companies, and the study found

that in total, seven groups received more

than 20 percent of their funding from drug

firms.

Are the drug companies really all to

blame for astroturfing? Just as the funding

provides the pharma firms with influence,

it also brings significant benefits for the

patient groups. Some groups argue that

without the funding, they would be unable

to operate, and with the additional funds

they are able to serve more patients than if

they excluded drug firms altogether.

However, many critics claim that even if

the level of transparency of a patient group

is extremely high, it still loses its claim to

objectivity and cannot properly represent

its patient group if it receives funding from

a specific group, pharma or not.n

The grass is always greenerHow pharmaceutical companies influence patient groups to create a grassroots demand for their products. By Natalie Brandweiner

“The timing of the donations is often

carefully planned by the drug companies

to coincide with their marketing strategies”

COMMENT

Astroturfing.indd 141 8/4/09 13:45:34


Frost & Sullivan’s Growth Team

Membership recently completed its 2008

marketing priorities survey. Marketing ex-

ecutives in North America and the

European Union were asked to identify the most

pressing challenges facing the marketing function

for 2009. The results were as reported by director-

level or above executives from companies with

revenue of $100 million/€70 million or more.

Frost & Sullivan conducted the survey to

better understand the business environment

factors and the key issues facing marketing ex-

ecutives in 2009.

Current impactRespondents were asked to select the top

two environmental factors. The top business en-

vironment factors were the global economic

downturn (54 percent) and the increasing need

for product/service innovation (10 percent). The

secondary business environment factors were

MARKETING

Times are tough for marketers everywhere, and no less so in the pharmaceutical sector.But take heart – the latest marketing priorities survey from Frost & Sullivan shows thatmarketers are not giving up the fight.

decreasing customer demand (20 percent) and

intensifying competition (17 percent).

In response to how the business environ-

ment factors are impacting marketing, the top

three ranked factors were judged to have a neg-

ative impact – global economic downturn (80

percent), intensifying competition(70 percent),

and decreasing customer demand (80 percent).

The survey contained 12 questions broken

out into three sections: company demographics;

business environment; and key marketing issues.

Company demographicsThe majority of North American respondents

(70 percent) work for public companies and more

than 90 percent operate in a business-to-

business (B2B) environment. Sixty percent work

for firms with revenues higher than $1 billion.

Conversely, 55 percent of EU respondents

are from private companies and 98 percent of

the EU work in B2B companies. Fifty-seven per-

Downout

MARKETING FUNCTIONEFFECTIVENESS

GOOD65%FAIR

29%

EXCEPTIONAL4%

POOR2%

OTHER6%

but not

MARKETING:apr09 08/04/2009 13:45 Page 142


cent of respondents report working for compa-

nies with revenues higher than €700 million.

The healthcare and life sciences (20 per-

cent), and information and communication tech-

nologies (18 percent) industries had the largest

participation.

When asked about the effectiveness of their

marketing function, only three percent of North

American and four percent of EU respondents

rated it as ‘exceptional’. Sixty-one percent of

North American peers rated their effectiveness as

‘good’, and almost 30 percent rated it ‘fair’ or

‘poor’. Forty-five percent of EU marketers rated

their effectiveness as ‘good’ and 51 percent con-

sider it ‘fair’ or ‘poor’.

ChallengesIn both North America and the European

Union, the survey data highlighted the negative na-

ture of the business environment and its effects on

customer demand and competition (see Table 1).

While there is some variation in the key is-

sues shaping marketers’ decision making in

North America and the EU, there are many

shared challenges. Accordingly, marketing has

to justify its expenditures yet create new sources

of growth for the company (see Table 2).

Respondents were asked to identify whether

their top three issues were primarily an issue of

“staff, technology, or process.” Overwhelmingly

in North America, respondents identified

‘process’ at the crux of their top three issues. In

the EU, ‘process’ and ‘talent’ were identified as

the main factors.

Going forwardThe global economic downturn is having the

biggest impact on marketing decisions. Marketers

have to justify their budgets as companies

squeeze spending in light of falling customer de-

mand. At the same time, marketing is under pres-

sure to spur growth opportunities whether

through finding new markets or developing inno-

vative products and services. This pressure will be

telling as many respondents feel the effectiveness

of their function could be improved.

As expected, the data highlights the nega-

tive nature of the economy and its effects on cus-

tomer demand and competition. However, this

recessionary environment also provides new

growth opportunities in emerging markets, de-

mand for enhanced products and services, and in-

novation in green and sustainable offerings.

The top five key issues are focused on mon-

itoring and justifying expenditures or creating

new sources of revenue. The data highlights that

although budgets are being scrutinized, mar-

keting continues to be charged with catalyz-

ing growth through identifying unmet cus-

tomer needs, or speeding up innovation.n

TABLE 2 KEY MARKETING ISSUESISSUE NORTH AMERICA EUROPEAN UNION

Measuring market spend effectiveness and efficiency 30% 16%

Identifying emerging customer needs and preferences 30% 21%

Justifying the ROI on marketing budgets 28% 29%

Enhancing the pace of new product and 25% 24%

service introductions

Identifying new, adjacent market opportunities 23% 24%

Evaluating and prioritising innovation investments 18% 29%

Improving sales and marketing integration 18% 26%

TABLE 1 TOP FIVE BUSINESS ENVIRONMENT FACTORS

FACTOR NORTH AMERICA EUROPEAN UNION

Global economic downturn 64% 47%

Decreasing customer demand 24% 19%

Intensifying competition 21% 17%

Emerging global markets 17% 11%

Increasing need for product/ 14% 28%

service innovation

0

10%

20%

30%

40%

50%

60%

TOP SIX PRIMARY BUSINESS ENVIRONMENT FACTORS

As can be expected in these turbulent times, theforemost business environment factor is theglobal economic downturn (54%). This is alsoreflected in the second business factor, theincreasing need for product/service innovation tocapture and retain market share.

Globaleconomicdownturn

Product/service

innovation

Green/sustainabilityinitiatives

Emergingglobalmarkets

Intensifyingcompetition

Corporaterestructuring

54%

10%

5% 5% 5% 5%

The research for the survey was carried out by Holly Lyke Ho-Gland, Donald Savant and Keith P. O’Brien.

MARKETING:apr09 08/04/2009 13:45 Page 143

pharmaceutical companies, creating both win-

ners and losers. In the UK, the Primary Care

Trusts now have power over how prescribing is

done in each region. And in the US, managed

care programmes and the increasing burden of

healthcare are influencing treatment decisions.

Consequently, there’s an urgent need for com-

panies to make changes to their commercial

models in thesemarkets.

In themiddle tier, there aremarkets that can

bedescribed as ‘mature’, but still waiting for the

market to develop to such apoint that new com-

mercial models will be mandatory. Many of the

southern European countries fall into this cate-

gory, plus Latin America.

In the third category – what IMS has called

the ‘pharmerging’markets (China, India, Brazil,

Russia, Turkey, Korea and Mexico) – growth re-

mains high, healthcare systems and funding

models are still developing, and a middle class

is emerging that can fund healthcare. Here the

traditional model still operates successfully.

NGP. What has IMS been doing to advance a

solution?

SS.Manufacturers have been applying a num-

ber of generalised frameworks in their early ex-

perimentation and pilots with new commercial

models. IMS, however, hasmadeuse of its local

NGP.What is drivingpharmaceutical companies

to re-think their commercial models?

Sati Sian. Several converging business condi-

tions are forcing most major pharmaceutical

companies to review their core, go-to-market

strategy and how they commercialise their

products. The most direct one is a decline in

sales force productivity – a trend first ob-

served a couple of years ago – precipitated

because the ability to access and inform

physicians has been tightened in response to

the stricter controls that have been placed

around them.

But the larger issue is that companies are

straining to sustain profitability in light of grow-

ing generic competition, slower innovation and

a much less robust pipeline, tightening regula-

tions and growing safety challenges, and cost

controls imposed by a variety of new decision-

makers. Payors are becoming increasingly ag-

gressive in controlling costs, a trendmadeeasier

by the availability of generics and the growing

number of ‘me too’ drugs in themarketplace.

In this environment,most companies recog-

nise the importance of reviewing their assets in

sales, marketing, market access and medical af-

fairsandthenrationalisingthemagainstabroader

set of customerswith different needs.Many com-

panies began experimenting with pilots of new

New commercial models


EXECUTIVE INTERVIEW

Sati Sian looks at how pharmaceutical companies are reviewing their strategies to meetchanging market needs.

commercialmodels a few years ago, and a select

fewhavemoved to full implementation in2009.

NGP. How do the new commercial models com-

pare to the old?

SS. The former model was designed to achieve

‘share of voice’. At its core was the simple (and

at one time valid) notion that ‘more reps equal

more sales’. That singlemodel nowappears fun-

damentally broken for a large proportion of the

market. In its place are multiple models flexing

to accommodate regional differences and the

nature of the controls that have been put in

place in each country. Thesemodels take into ac-

count new, additional stakeholders and the

complex interactions needed to work success-

fully with each of these groups.

NGP.What trends are you seeing across major

markets?

SS. Markets across the globe are at different

stages of evolution. In advanced markets such

as theUS, Canada, theUK andGermany, the dy-

namics have already changed. The return on in-

vestment in physician-calling programmes and

larger sales forces is dramatically down for a

large segment of themarket. In Germany, for ex-

ample, new legislation gives the sick funds con-

siderable power to negotiate directly with

IMS Health ED:13sept 8/4/09 13:49 Page 144

footprint in each of the eight leadingmarkets to

study what has really been driving change and

to understand the current commercial context

for products across 80 therapeutic areas.

We’ve segmented each therapeutic class in

each country into three market categories: dif-

ferentiated, commoditised and transitional. This

research has shownushow the need for change

varies by class and country and what invest-

mentswould nowmake a real difference in each

market. Across the board, we’ve found consid-

erable opportunity for optimisation; many bil-

lions of dollars of promotional spending are no

longer warranted or could be better deployed.

Based on the evidence we collected, we

also developed insights into the competencies

and structures that pharmaceutical companies

will need in order to respond appropriately. We

then created a strategic framework for aiding

companies in devising commercial models that

accommodate their portfolios, the competitive

landscape, and their own threshold for change.

To help companies make the transition – which

will in all likelihood be the most ambitious

change effort the industry has ever undertaken

–we’ve structured anapproach to implementing

change using the collective talent and knowl-

edge of ourmanagement consultants.

NGP. What framework for designing and im-

plementing new commercial models does IMS

recommend?

SS.We believe, for starters, that each company

should understand the real return it is getting

from its go-to-market efforts and assess its

broader strategic options before undertaking

the ‘downstream’ work of developing a new

commercial model. Once a cohesive under-

standing is established, work can progress

along three work streams.

Themost near-term involves stimulating the

efficiency and the effectiveness of the existing

resource, and these efforts are currently having

the most impact on clients’ businesses.

Companies are primarily using technology to

look at more efficient segmentation schemes

and pushing to create more value through the

existing resource pool.

The second focuses on stakeholder en-

gagement. One of the most significant factors

that will drive improved performance is achiev-

ing clarity about the new stakeholders and how

best to engage them. For example, this may en-

tail knowing how to use key account manage-

ment structures, deciding whether resources

should be regionalised so that they are closer to

the plan owners, and determining what re-

sources are needed to engage successfullywith

the new stakeholders.

The third area is around creating additional

value from the current portfolio of products. IMS

is encouraging companies to think beyond the

therapy itself and to wrap total treatment plans

around the product set.

NGP. What’s required to adopt a customer-

centric approach?

SS. First, understand that the definition of the

customer is changing. The customer used to be

the physician, and so as much as 90 percent of

the sales effort was physician-focused. Now

‘the customer’ includes amuchbroader groupof

stakeholders.

This means that marketers face a very dif-

ferent set of needs that must be satisfied in the

market. Companiesmust, therefore, have differ-

ent value propositions, different organisational

structures, and different skills, capabilities and

assets that face the stakeholders.

We’ve seen this customer-centric approach

workquitewell.A top tenpharmaceutical compa-

nywanted to build stronger, customised relation-

shipsacross its customerbase, andsowehelped

it isolate the variables that customers appreciate

in their interactions with the company. We then

recommended newmetrics for driving behaviour

that included measures of customer value and

plan influence by region, rather than share of

voice. The company was able to realise an incre-

mental$900millionannually inonecountryalone.

NCP. Can you point to some examples of com-

panies that have got it right?

SS. Although a few businesses are in some

stage of implementation, it’s too early to pro-

nounce that they have been successful.We are,

however, beginning to see strong implementa-

tions of new regional structures in which com-

panies are moving resources from a national to

a local level. In the US for example, three major

players are implementing and executing region-

al organisations that have the autonomy to re-

spond to local needs by re-tuning their

proposition. One of our clients operating in

Spain has also adopted a regional approach,

aligning the management framework to the ge-

ography of the new stakeholders. The company

is seeing significant improvement in the uptake

of newproducts, as itsmarket access teams are

integrated at the local level.

NGP.What does IMS bring to the challenge?

SS. First, IMSprovides access to the information

required to understand the current landscape in

eachmarketandtheability toquantify thedegree

to which a company’s existingmodel is working.

Plus, we have in-depth, local knowledge about

the health outcomes that local healthcare

providers are demanding. Having framed the

strategic decision-making process, we can help

companies select the best approach for their sit-

uation. For example, we helped a mid-tier com-

pany map out its future operating environment

across 19 countries, outlining what models

made the most sense in each geography and

what skills, processes and assets it would need

inorder to succeed.

Wecan thenguide the onerous and lengthy

implementation process and measure the

success of the resulting programme. It’s worth

noting that our recent acquisition of Skura

Professional Services enhances our ability to

implement customer-centric approaches with

particular experience in implementing closed

loop marketing. �


Sati Sian is Global General

Manager, Commercial Effectiveness

at IMS Health.

IMS Health ED:13sept 8/4/09 13:50 Page 145


For sellxpert, early involvement of the sales team in planning

the future field sales initiatives was extremely important. This as-

sured seamless and professional communication at all levels from

the very beginning.

Following successful conclusion of the respective project phases

– targeting, CRM, PR, marketing, medical competence sessions and

logistics – the Flector Pain Plaster made its debut at the German

Congress of Orthopaedics and Trauma Surgery in Berlin from 21 - 25

October 2008. Not only did the product quality meet high approval,

the key visuals, which were pre-tested by the

field service, were also very well received. The

viewers associated the ankle bearing a criss-

cross plaster against a red background with

Swiss quality and high class workmanship.

The sellxepert ad team received intensive

specialist training in Switzerland and compre-

hensive training in Bruchsal prior to beginning

the nationwide introduction of the Flector Pain

Plaster on 20 October 2008. The product is

available from pharmacies and general prac-

titioners and also from sports doctors and orthopaedists. The Flector

Pain Plaster has met a very positive reception from both doctors and

pharmacies and has received positive feedback from all sides during

the first six months. This demonstrates that professional preparation

on all levels, together with professional communication between the

project team and field staff, minimises friction and provides sustain-

able support for success in the market. n

The expanding healthcare service provider sellxpert has suc-

cessfully extended its product portfolio to include an area that

was almost exclusively the responsibility of pharmaceutical

companies in the past.

Its comprehensive overall concept won sellxpert the contract for

the launch of the pain plaster for the renowned IBSA Institut Bio-

chimique SA, whose registered office is in Lugano.

Mr U. Sidjanski, IBSA Sales and Marketing Manager for Swit-

zerland and the designated General Manager of IBSA Germany,

described the specified requirements as

follows: “We wanted everything from one

source, i.e., a contact person with a good

knowledge of all the players in the German

market. This meant knowing, on the one

hand, how to approach doctors and pharma-

cists. On the other, they had to be familiar

with the wholesale trade and the entire lo-

gistics behind it. They also had to be capable

of coordinating all our marketing initiatives

in Germany.”

Alongside excellent know-how and a high quality sales team,

the decisive factor in awarding the contract was the sellxpert part-

ner network, which is unique in this branch. The network includes

marketing experts, advertising/PR agencies, medical data collec-

tion specialists, CRM specialists and logistics companies. It enables

sellxpert to guarantee fast and streamlined implementation on all

levels – from a single source.

Launch of fLector Pain PLastersellxpert GmbH & Co KG introduces the OTC product ‘Flector Pain Plaster’ to the German market for the Swiss company IBSA.

Sybille Queißer is the

Managing Direcotor of

sellxpert GmbH & Co KG. Most

recently she worked freelance,

prior to which she was the co-

founder of pharmexx, where

she worked until 2002.

Sybille Queißer

SELLXPERT ED P146.indd 146 8/4/09 13:46:38

Sellxpert.indd 1 8/4/09 13:24:01

portant to ensure the camera is out of sight, because people behave dif-

ferently when they’re aware they are being filmed.

“Telepresence firms minimize the bezels, use large rear projection

video walls, or large beam-splitters to create a more immersive experience,

so that it’s much different from the observant experience of watching a

TV set,” Lichtman says. “When you get the human fac-

tors of the experience right, people will actually use

it, and they’ll use it much more than they would have

used traditional videoconferencing. Statistics collect-

ed from five pharma companies show that they used

traditional videoconferencing for no more than 11

hours per month. But when you make an investment

in these environments, people will use them 50, 60,

70, 100-plus hours per month.

“You don’t need draconian travel restrictions, be-

cause you still want people to travel and move the ball

when that is the most appropriate form of communica-

tion. However, there are many times when, if you could

have the same dynamics as a personal meeting but save the cost, you

would accelerate your time-to-market advantage, the development cycle

of a drug and the approval and testing process.

“Being able to give your employees that tool is very, very important,

and that’s why companies have been investing in this technology. They

Since technology became centrally important to business op-

erations, researchers around the world have been working

to streamline communications across long distances.

Communication via digital channels began in the 1980s, and

spread to the masses though software such as MSN

Messenger and Skype. Now the next

level has arrived, in the form of telepresence.

Howard Lichtman, President of Human Productivity

Lab, defines telepresence as: “Visual collaboration so-

lutions that address the human factors of participants

and as closely as possible attempt to replicate an in-per-

son experience.”

According to Lichtman, the technology of telepres-

ence is so advanced it is capable of convincing users

they are in the same physical space with someone who

is on the other side of the world. He describes the intel-

ligence behind the technology: “The creation of an in-

person experience is accomplished by a combination of

factors: Mirroring the environment, so it seems like all the architectural el-

ements on both sides of the world are the same, creating a feeling of being

in the same physical space.” Low-latency video and audio codecs, high-

quality private IP networks, life-size images, fluid video, accurate flesh

tones and spatial acoustics are also used to maintain the illusion. It’s im-

Virtual reality


Howard Lichtman tells NGP about the revolutionary new technology that ischanging the way pharma companies do business.

“As the value goesup, more people willjoin; as more peoplejoin, the value goesup more – it’s avery positive cycle”

Lichtman ED:13sept 8/4/09 13:53 Page 148

have seenusagegoup, theyhave seen their travel godown, theyhave seen

time-to-market advantage, they have seen improvedproductivity; all of the

things that videoconferencing promised but never delivered because peo-

ple didn’t like it. It was unnatural, it was painful, therewas delay, therewas

lag,” explains Lichtman.

More reliableNot only is the technologybeneficial for creating apersonal experience

and avoiding the ‘pain’ of the old system, it is also creates a much more

reliable network with the right kind of bandwidth, ensuring there are no

screen remnants or fragments. Lichtman explains that it maintains a

very low latency to ensure there is no delay between sites.

“in the old days,” Lichtman explains, “videoconferencing was deliv-

ered over a lot of point-to-point circuits. So firmsmight have had aT-1 data

line between a main videoconferencing room in London and an office in

New York, that’s all it’s dedicated to. You couldn’t have other IP applica-

tions competing for the videoconferencing bandwidth because

video traffic is delay intolerant, and if it suffers packet loss, then

you lose the experience and then the technology becomes a dis-

traction instead of a benefit,” he says.

Instead of point-to-point circuits, companies are now chang-

ing the way in which they communicate, using IP videoconfer-

encing both internally and externally. Previously, the technology

was generally used for headquarters to talk to remote offices.

Now companies are investing in what Lichtman describes as

‘telepresence community of interest networks’ (CoINs).

“You can invest in telepresence CoINs thatwill not only connect

you to your other locations butwill connect you to the othermembers

of the community of interest network. You’rebuying connectivity into a

cloud that’s going to support your own locations, but now you can call

people in other companies. You can call your vendors, suppliers, joint

venturepartners,your lawfirm,yourserviceproviders,etc.Whatyou’re

seeing is the value of joining this telepresence community, and the in-

terest ofwatching thenetworks grow,” says Lichtman.

Lichtman says COINs are nowbeginning to take off in a bigway,

as the ROI becomes even greater with more companies joining the

community. And the more partners a business is able to communi-

cate, the better.

Industry specific“Asmoreandmorepeople joinCOINs, thevalueofbeingconnectedgoes

up,”Lichtmansays.“As thevaluegoesup,morepeoplewill join;asmorepeo-

ple join, thevaluegoesupmore– it’s a verypositive cycle.”

“Forthemovie industry itmeansthey’rebuildingeditingrooms,whereyou

canwork in theeditingprocess in real-timebetweendifferent locations.That’s

what HPHalo started out as. They’re building pitch roomswhere you can do

storyboardinganddevelopment for thefilm industry.

“In thebanking sector, they can take subjectmatter experts in one cen-

tralised location and transport them toanyof their branch locations. For ex-

ample, youmight have a relationshipwith a big bank inOhio and youneed

a foreign letter of credit, but the foreign letter of credit specialist is in New

York; now you’re able to move this expertise around the world in this very

compelling and natural way.”

According to Lichtman, many pharmaceutical companies are using

telepresence systems in their research and development environments.

“For example, Teliris has built one for GlaxoSmithKline. The big boys view

this as a strategic, competitive advantage, and they’re not that willing to

share someof the trade secrets of exactlywhat they’re doing, but suffice to

say, it’s pretty clear which companies are beginning to build application-

specific telepresence solutions.What thismeans for thepharmaceutical in-

dustry is that there canbe shared research anddevelopment between labs

in the US and Europe.”

Lichtman compares the development of telepresence to that of the tele-

phoneandfaxmachine.Asmorepeoplebegantousethem, theybecamenor-

malised into business operations, and thetechnology continued to improve.

Telepresence communications currently exist mainly on the executive floors

of Fortune 500 companies, with only executives seeing, using and under-

standing this new process of communication. Lichtman advises that the ex-

perienceof telepresence cannot beunderstoodwithout being experienced.

“To understand the power of it, you have to go and sit in one of these

environments, and say, ‘This feels like I’m sitting in the same room with a

guywho is half way around theworld.We’re having a normal conversation,

it’s not painful, we can be very effective in it, we can share data. I can show

himmy PowerPoint slides. I can show him this Excel spreadsheet and we

canwork in it simultaneously.’”

Oneof themain advantages of telepresence is the ability it provides to

avoid the need for travel when holding meetings. Lichtman gives the fol-

lowing example: “When I was Vice President of Business Development at

TeleSuite, which was one of the pioneers in the industry, GSK was one of

our customers. At the time they were making around 700 flights a month

between between London and Philadelphia. They had a corporate policy

where business class travel was available for flights over five hours in

length so itwas very expensive proposition. Theywere able to put in telep-

resence solutions and cut that travel in half.


Howard S. Lichtman is President of the Ashburn, VA-based

Human Productivity Lab, the world's leading consultancy on

telepresence, telepresence managed services, and

telepresence inter-networking.


“The other advantage is that if you have a problem you can im-

mediately huddle the team. You can immediately get people around

theworld together in a natural formatwhere you canbeproductive,

where that might not have even been possible with travel. You can

also hook up testing informatics and other R&D tools, for example,

to look at amicroscope slide remotely.

High adoptionTheUS currently boasts the highest rate of telepresence adop-

tion, but Lichtman says the rest of the world is not far behind.

“Europe is number two by far, and it’s spreading rapidly to Asia; the

Pacific Rim is now starting to get more popular. Telepresence was

essentially a homegrown technology in the US, and the major

companies in the space are American companies – Cisco, HP,

Polycom, Teliris – and so the sales forces and corporate market-

ing groups are there, but it’s definitely a global phenomenon. I’ve

seen stories recently about firms in South Africa, Dubai, Israel

and Russia that have deployed it.”

Although telepresence offers many advantages over tradi-

tional teleconferencing, there are still a few familiar downsides.

You can’t shake hands with the person you are meeting, for ex-

ample. You can’t go out and have a drink at the pub, or even

hand them your business card. “And because it is an environ-

ment where the camera is on you, that can be good and bad,”

Lichtman says. “It’s good in the sense that people pay more at-

tention. People will actively listen and participate more versus

checking their Blackberrys. The flipside is that they may be less

candid because of the potential for the meeting to be recorded.”

Lichtman says the technologywill only getmore realistic as the

technology develops. “There’s an amazing jump in realismbetween

the average telepresence setup and traditional videoconferencing,

which I call the ‘plastic camera on theTV set on thedessert cart’. The

experience is only going to getmore real. It will also get cheaper; as

IP networks develop around the world and there are submarine ca-

bles and fibre optics going to more countries. The cost of delivery

and the cost of the network and themanaged services that support

it are more expensive than the endpoints. It’s those costs that will

go down.”

Lichtmanalsopredicts thatutilitywill goupasmore telepresence

CoINs join together and have network-to-network interconnects be-

tweenthem,andasmorecompanies thathaveproprietarycodecsand

calling plansmake their systemsmore interoperable. “Wewill get to

thepointwherevirtually everymajor company in theworldwill havea

room, and you will be able to walk into the room and call any other

company in theworld,andsitdownandhavearealmeeting,and itwill

be like you’re in the samephysical space. You’ll be able to share infor-

mationmuchmoreeasily, and that is going to supercharge theflowof

knowledgeand the speedof innovation.

“Good things will come of this, in the same way that good

things came out of the internet. Good drugs will be developed

faster and bad drugs will be discovered sooner. The quality and

the amount of information that is being exchanged will go up

dramatically, and that will be overwhelmingly positive.” �



BSMconsulting.indd 1 8/4/09 13:12:26


Money has been fl ow-

ing into innovative

cancer research pro-

grams and biotechs

in Texas over the

past few years. Its

residents have already approved Propo-

sition 15, a $3 billion (€2.25 billion) bond

program, which will be ploughed into

fi nding a cure through research and pre-

vention, clinical trials and the construc-

tion of laboratory facilities throughout

the state. Each year, 37,000 Texans die

from cancer, and state fi gures show the

disease now costs Texans about $30

billion (€22 billion) a year in direct and

indirect costs.

The state is one of the top fi ve regions

in the US attracting biotech companies.

In fact, central Texas-based life science

outfi ts have attracted about $500 mil-

lion (€373 million) in venture capital over

the past year, while the amount of ven-

ture capital invested in bioscience over

the last six years came to $1.34 billion (€1

152TEXAS FOCUSBiotech investment in the Lone Star stateThe American state of Texas has a reputation for doing everything bigger and better, which is good news for the state when it comes to medical innovation.

70 percent of the population of Texas lives within 200 miles of AustinTexas possesses three of the top 10 most populous cities in the US – Houston, Dallas and San AntonioTexas has 215 cities with a population of 10,000 or moreTexas has 90 mountains a mile or more high, with Guadalupe Peak in West Texas at 8751 feet being the tallestAlmost 10 percent of Texas is covered by forest, which includes four national and fi ve state forests

FUN

FACT

S

STATE STATS

Population: 22,859,968

Capital: Austin

Governor: Rick Perry

Number of counties: 254

Colorado River, Austin at night

BACK-TEXAS.indd 152 8/4/09 13:42:04


billion), according to the Biotechnology

Industry Organization.

MD Anderson Cancer Centre in Hou-

ston leads the way in the state and is

Texas’s only dedicated cancer hospital.

Its mission statement is clear and simple

– to eliminate cancer. Some notable

achievements of the hospital include

designing a rapid chromosome ‘painting’

technique to pinpoint gene abnormali-

ties in chromosomes for use in diagnosis

and treatment monitoring of cancer and

genetic diseases; and documenting a

direct molecular link between cigarettes

and lung cancer, based on research stud-

ies that showed a carcinogen in tobacco

smoke binds to key mutagenic sites in the

p53 gene. The centre also developed a sim-

plifi ed BCR-ABL diagnostic test that uses a

tiny amount of blood to detect and monitor

chronic myelogenous leukemia and some

acute leukemias, thus reducing the need for

multiple bone marrow aspirations.

North Texas will soon have its own

cancer hospital following the news that

Baylor University Medical Center is set to

open its own facility. The centre will be

committed to advanced cancer treatments.

It will allow for a more comprehensive

personalised medicine program, including

areas of research such as targeted therapy.

The new 450,000-square-foot centre is

scheduled to open in 2011, and construc-

tion of the dedicated cancer hospital will

begin in 2010, with completion sched-

uled for 2013.

UT Southwestern Medical Center is

spurring innovations in patient care and

aiding economic growth in the area by

establishing a new biotech park, called

BioCenter, at Southwestern Medical Dis-

trict, to develop university technologies

and attract existing biotech companies to

North Texas. The 13-acre site – purchased

from the city of Dallas for $4.1 million (€3

million) – is being developed in stages,

with the fi rst of four buildings expected

to be ready for occupancy this summer.

With ultimate plans for up to 500,000

square feet of laboratory, offi ce and

research space, BioCenter will serve the

full spectrum of the biotechnology and

biodevice industry, providing a nurturing

environment for early-stage and mature

companies alike. The purpose of the site

is not only to develop UT Southwestern

technologies to the point of commerciali-

sation, but also to provide commercial

space for existing or start-up life-science

companies that want to locate close to

the university and its many resources.

Austin Ventures, a $3

billion (€2.25 billion)

venture capital fi rm based

in Austin, introduced

Santé Ventures, a

venture capital fi rm

with healthcare

investment experience,

last year. Santé closed its fi rst

investment fund in December 2007,

with $130 million (€97 million) in

capital committed primarily to seed

and early-stage companies in medical

technologies and healthcare services.

Emergent Technologies Inc., also

based in Austin, has funded scientists

at the University of Texas, Dallas

and UT Southwestern with $50,000

(€37,000) to develop a device for

removing kidney stones.

VC FOR MEDICAL TECHNOLOGY

venture capital fi rm based

last year. Santé closed its fi rst

Austin (pop. 743,000)Texas’s very own San Francisco, Austin is a surprisingly liberal city in a state well known

for its conservatism. Nicknamed The Live Music Capital of the World, the city has a thriving

music scene with more musicians per capita than any other North American city (apart

from Nashville).

San Antonio (pop. 1,328,984)San Antonio is the second-largest city

in Texas and 7th largest in the US.

Every year 26 million tourists come

to the city to visit such attractions as

SeaWorld and the Six Flags Fiesta

Texas theme park. The jewel of the

city is the River Walk, with its shops,

bars and restaurants, which meanders

through the downtown area.

Dallas (pop. 1,052,400)Dallas can be found on the northeastern plains of Texas and covers an area of 342.5

square miles. The city is spending $13 billion (�9.7 billion) on urban developments. The

frozen margarita and the chicken fajita were invented in Dallas.

Houston (pop. 2,000,000)America’s fourth largest city was founded

on August 30, 1836 by brothers Augustus

Chapman Allen and John Kirby Allen on

land near the banks of Buffalo Bayou.

NASA’s Johnson Space Center is located

in Houston. The city’s Texas Medical

Center is home to more than 42 nonprofi t

institutions and is the largest medical

center in the world.

CITY FOCUS

The River Walk

Saturn V at Johnson Space Center

BACK-TEXAS.indd 153 8/4/09 13:42:14


154IN REVIEWOn the shelf

Our Daily MedsHow the Pharmaceutical Companies Transformed Themselves into Slick Marketing Machines and Hooked the Nation on Prescription Drugs, By Melody Peterson

Former New York Times reporter Petersen takes an in-depth look at questionable practices

within the pharmaceutical industry, and suggests reforms aimed at making big drug companies

more accountable. Covers everything from copycat drugs and the environmental impact of drug

residues in drinking water to marketing practices aimed at doctors.

NGP says: A thorough inside look at controversial aspects of the pharmaceutical industry not usu-

ally accessible to the general public. Read it and decide for yourself.

Explains the role of patents, FDA regulations for generic drugs and the Hatch Waxman Act on

conventional and biological drug product development, and how directed innovation can result in

enhanced care for patients while extending the commercial lives of the drugs. Of interest to phar-

maceutical executives and managers; regulatory, legal, business development, R&D and strategic

marketing professionals; and anyone with an interest in the future of the leading American pharma-

ceutical and biotechnology industries and the high value jobs they provide.

NGP says: Concise, easy to read, and helps to simplify the complex subject of pharmaceutical

patent regulations.

The Generic ChallengeUnderstanding Patents, FDA & Pharmaceutical Life-Cycle Management By Martin A. Voet

Business development in the biotechnology and pharmaceutical industries accounts for over

$5 billion in licensing deal value per year. The scope of the job can be huge, and it can require a

broad range of knowledge and skills from practitioners. Austin’s book is based on the international

training program he delivers to pharmaceutical executives.

NGP says: A practical guide to developing a career in business development in the pharmaceutical

industry. A must read for anyone thinking of entering the fi eld.

Business Development for the Biotechnology and Pharmaceutical Industry By Martin Austin

NGP takes a look at the recent crop of pharmaceutical and life sciences books.

InReview.indd 154 8/4/09 13:42:54

But there’s more. Weekly interviews with industry leaders are webcast on the site’sdedicated channels. These are combined with live, moderated discussion groups,video conferencing, IM and secure e-mail in one easy-to-use app that’s dedicated tobusiness.

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MTB MAG GENERAL AD:mar09 08/04/2009 13:48 Page 155


A Slovenian politician and economist, Janez Potocnik is cur-

rently serving as the European Commissioner for Science and

Research. Before joining the commission members in 2004,

Potocnik was Assistant Professor at the University of Ljublja-

na, where he lectured on statistics and economics.

Combining R&D development with number crunching, Po-

tocnik has expanded the EU’s R&D intensity, investing three

percent of the commission’s GDP in R&D. He views research

and development as essential components of Europe’s

economic and social future, and so has made the improve-

ment of conditions for research within the region as his

primary aim.

His belief is that generating knowledge will encourage tech-

nological advancements to help bring about the achieve-

ments of such policies. By providing scientific support to

policy-making, decisions are made based upon sound data.

Underlying his aim of expanding R&D is a commitment to

green science.

Since taking the position, Potocnik has developed various

initiatives to tackle the problem of dwindling science careers,

such as Researchers in Europe 2005, which organised vari-

ous events to bring scientists and the public together. Also,

the Code of Conduct and Charter for Recruitment initia-

tives have been launched in an attempt to boost interest in

the industry.

Potocnik also developed the Innovative Medicines Initiative

(IMI), a new industry research initiative, to further the expan-

sion of new pharmaceutical medicines in Europe. The Com-

missioner granted the project a huge €2 billion budget until

2013, saying, “IMI is about pooling public and private efforts

so that Europe can be a big player.”

As an avid campaigner against animal testing, Potocnik has

criticised both the pharmaceutical industry and academia

for failing to commit sufficient resources to finding alter-

natives, and has called on companies to share informa-

tion gathered from research and testing. The stage has

been set for an EU-wide ban on animal testing of cosmetics

in 2009. n

156PROFILEJanez PotocnikThe European Commissioner for Science and Research

Profile.indd 156 8/4/09 15:09:24

gdsinternational www.gdsinternational.com

US Editio

n

Europe

Editio

n

Your World. CoveredFrom the people you hire to the products you sell, if you’re in business, we’ve got it covered...

Next Generation PharmaceuticalApproximately 50% of new drugdevelopment fails in the late stages ofphase 3 – while the cost of getting a drugto market continues to rise.

NGP is written by pharmaceutical expertsfrom the discovery, technology, business,outsourcing, and manufacturing sectors.It is committed to providing informationfor every step of the pharmaceuticaldevelopment path.

Find out more: www.ngpharma.eu.com Available for: Europe, US

Executive Healthcare ManagementThe healthcare industry is changing. Understanding how toimprove clinical processes, meet industry standards andmerge the maze of disparate systems is vital.

EHM combines unbiased industry news with thoughtleadership from the most respected executives in healthcare,providing a platform for strategy and learning.

Available for: US

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Financial Services TechnologyProviding for its customer’s needs and demands is the goalof financial institutions now more than ever. But it is a trickyremit to fulfill. Your customers want it all – security, cost-efficiency, speed, added functionality and, most of all,convenience.

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Business ManagementWhat business processes work? What are the proven,successful strategies for taking advantage of domestic andinternational markets?

Business Management is about real, daily managementchallenges. It is a targeted blend of leadership and learningfor key decision makers in government and privateenterprise.

Available for: US, Middle East, Russia

Find out more: www.busmanagement.com

CXOTechnology leadership is merging with strategic and financialleadership, and senior management is being called into apartnership for the future.

CXO brings together a range of voices with one sharedvision: to develop a strategy that considers business needsand technology’s role in moving your company forward.

Available for: Europe

Find out more: www.cxo.eu.com

NextGen Power & EnergyA poll of 4000 utility executives posed the simple question:what keeps you up at night? The answers were costs, newtechnologies, ageing infrastructure, congested transmissionand distribution, viable renewables and inadequategeneration capacity.

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HRManagementHR needs three eyes: one on the past – don’t lose sight ofthe systems that generate value; one on the present –determine if current processes are efficient; and one on thefuture – be proactive in meeting new challenges.

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Available for: Europe, US

Find out more: www.hrmreport.com

CATALOGUE PAGE NGPEU:apr09 08/04/2009 14:16 Page 157

158UPCOMING

International EventsA roundup of upcoming pharmaceutical conferences and workshops around the world.

May 4-7, 2009The 8th Pharmaceutical Powder X-ray Diffraction SymposiumGlasgow, Scotland

International Centre for Diffraction Data

Tel: +44 610 325 9814

Email: [email protected]

September 15-17, 2009Next Generation Pharmaceutical SummitBremen, Germany

Tel: +44 212 920 8181

June 11, 2009Biosimilars and Analytical ChallengesLondon, England

Royal Pharmaceutical Society of Great Britain

Tel: +44 207 572 2640


May 5, 2009Supporting Pharmacy Managers in the FutureLondon, England

Royal Pharmaceutical Society of Great Britain

Tel: +44 207 572 2640


May 11-12, 2009Aseptic Processing in the Manufacture of Biotech and Pharmaceutical ProductsBerlin, Germany

The Center for Professional Innovation and Education



events-back.indd 158 8/4/09 13:47:40

May 28-29, 20093rd Asian New Drug Development WorkshopTokyo, Japan

Drug Information Association

Tel: +81 35 833 8444


June 1-3, 2009Biotech ChinaShanghai, China

Deutsche Messe AG

Tel: +49 511 893 2136


August 20-21, 20092nd Annual Pharmaceutical Law ConferenceSydney, Australia

IIR Conferences

Tel: +61 2 9080 4009


May 5-6, 2009Early Drug Development: Navigating the Treacherous RapidsSilver Spring MD, United States

Drug Information Association

Tel: +1 215 442 6100


May 14-15, 2009RNAi World CongressBoston MA, United States

Select Biosciences

Tel: +44 1787 315110


May 1, 2009Automate Your Validation ProcessMontreal QC, Canada

Compliance Associates

Tel: +1 905 738 3773



events-back.indd 159 8/4/09 13:47:51


panies are abandoning the primary care

market entirely.

The future of the pharmaceutical in-

dustry is broader than pharmaceuticals; it

also lies in servicing health. More specifical-

ly, it lies in transitioning from an industrial-

era view of a business focused on

manufacturing and promoting physical

products (i.e., drug brands), to a model

based on organising industry environments

around shared marketspace. This is about

forging whole new kinds of business plat-

forms to create new markets: Merck linking

with General Mills to invent a new standard

of care in diabetes; Roche connecting with

Apple to design a unique aggregation of

health content in breast cancer.

The winners in this new economy will

know how to work with all this interconnec-

tivity, the chaotic and the nonlinear. They

will know how to move horizontally and

work collaboratively, like P&G and Google,

who recently exchanged employees in an

effort to spark marketing innovation.

There is opportunity in this Year of

the Ox to re-orient the pharmaceutical in-

dustry, as Pfizer claims in its news release

announcing the Wyeth acquisition, and

these new even-bigger companies have

the resources and positioning to do it. But

it will take a different kind of strategy and

action, an evolutionary leap to adapt to a

new world where there are no easy an-

swers, no proven routines, and no straight

lines. This is the strategic challenge for the

global pharmaceutical industry. n

A ccording to the Chinese zodiac,

2009 is the Year of the Ox. The sign

of prosperity through fortitude, the

Chinese say the Ox works methodically, a

born leader possessing an innate ability

to achieve great things. A good time then,

for natural leaders to step forward and

make big, creative moves on behalf of

their companies.

Despite the size of the recent Big Three

acquisitions in the pharmaceutical indus-

try, however, these deals feel more routine

than imaginative, more tactical than strate-

gic. Pfizer/Wyeth, Merck/Schering-Plough,

and Roche/Genentech look more like linear

moves at the operational level, and it’s dif-

ficult to see where new strategic results will

come from. It’s great to be number one in a

market space, as Pfizer is now envisioning

itself to be, but aspiration is not strategy –

General Motors is the ‘number one’ car

company in the world.

The centre of gravity – the focal point

for overall competitive capability – for these

acquisitions is still squarely sitting on a

commercial model whose success de-

pends on promoting the features and ben-

efits of individual drug brands in a

marketplace that sees little value in, and

does not trust, pharmaceutical promotion.

Despite spending of between $30-$60

billion (€20-€45 billion) a year on promo-

tion in the United States, sales of prescrip-

tion drugs in that country rose just 1.3

percent in 2008, slowing for the second

straight year and continuing a downward

trend in developed markets throughout the

world. Issues around pharmaceutical sales

force and market access or now so widely

known they are cliché.

StrategyLike most industries, governments and

institutions, pharmaceutical companies

face an adaptive challenge to a changed

context for strategy. The whole framework

for getting new medicines approved is

evolving, the amount of revenue generat-

ed by new drugs is dropping, and atomis-

ing ‘customers’ are awash in information

and competing data claims. The market-

place is moving away from accepting labo-

ratory measurements as evidence of real

clinical benefit, focusing instead on improv-

ing health outcomes. There is a growing re-

ality that many people present with

complex symptoms and multiple illnesses,

driving the demand for holistic solutions

that will in turn change human resource, fi-

nancing, service delivery, information tech-

nology and legal policy. In another sign of

strategy mismatch between the pharma-

ceutical industry and the marketplace, the

World Health Organisation is now under-

taking a fundamental shift to primary

healthcare, while several major drug com-

COMMENTBusiness in the Year of the OxWhy the recent mergers and acquisitions in thepharmaceutical industry are missed opportunities forcommercial model innovation. By John Singer160

John Singer is the founder of Blue

Spoon Consulting, a strategy and

marketing consultancy that helps clients

innovate their tactics, differentiate their

strategies and create at a system level.

“The future of theindustry lies in

transitioning to a modelbased around shared

marketspace”

COMMENT BACK:apr09 08/04/2009 15:20 Page 160


As procurement continues to move up the corporate agenda,

the switch to lean processes has put pressure on sourcing

departments across the pharmaceutical industry. Sammy

Rashed, Head of Global Sourcing at Novartis, explains that

security of supply is a priority. “When looking at the supply

chain that goes into making our products, there’s a certain responsibility

we have to ensure the continuity of supply. That has to do with ensuring

the fi nancial health of our suppliers, certainly given that the current situ-

ation is both a threat and an opportunity. For example, if suppliers have

a high debt level, or a lot of sitting inventory, if they’re exposed with idle

capacity, if their prices are linked to very highly fl uctuating commodity

prices which they’ve hedged, this is information that we must be aware

of so we can adjust our strategy accordingly.

SUPPLY CHAIN


Novartis’ Sammy Rashed talks to NGP about ensuring supply chain security in the stormy weather of the current fi nancial climate.

Turbulence AHEAD


MPIResearch2.indd 1 8/4/09 13:20:36

Waters2.indd 1 8/4/09 13:07:53

Documents

NGP EU 7