Open Innovation in the

Pharmaceutical Industry

Malcolm Skingle CBE DSc PhD

Director – Academic Liaison

Drug Discovery

28th May 2010

ASTP 10th Anniversary

Paris

Talk Plan

- Set the scene from a Pharma perspective

- Social responsibility & Neglected Tropical

Diseases

- Examples of where GSK are allowing access to

some of their proprietary technology to expand

the science base

- Few concluding remarks

Setting the scene

- GSK access world-class basic & applied science

in universities & biotechs in order to inform &

drive their internal research efforts.

- Re-structuring Pharma sector = ↑ externalisation

of some aspects of the R&D process

- Increasingly companies are allowing external

academic groups access to proprietary

technology

- This may be pre-competitive or competitive.

Setting the scene from a Pharma perspective

Research costs are increasing

Patent expiry & increasing generic competition

Pricing & reimbursement

Increasing regulatory hurdles

Late stage/product failures

Fewer Blockbuster drugs

Post–genome scientific challenges are too great for a single organisation

Partnerships are the only sensible way forward

Changing face of Innovation

The Past….Large Corporate R&D facilities

Secretive smart scientists, low level of collaboration

Closed Innovation

The Present…..leaner business units

Increased levels of collaboration

More outsourcing, more partnerships

Open Innovation

“Closed” Innovation “Open” Innovation

Open innovation

“No matter who you are, most of the smartest

people work for someone else”

Bill Joy, Sun Microsystems

Continued focus on externalisation through options-based deals

More than 80 active projects from 47 external engines

Alveonix

Pentraxin Therapeutics

Tempero Pharmaceuticals

UCL Institute of

Ophthalmology

13 new partnerships since Feb 09

The Problem: A healthcare crisis

The healthcare burden is borne disproportionately in the least

developed countries

– Africa – 34 of the 50 poorest countries; 24% of the global

disease burden

Malaria – 250 million new cases/year; 1 million

deaths/year

TB – 8 million new cases/year; 2 million deaths/year

Tropical Diseases suffer from a severe lack of research

– Difficult targets

– Slow progress

– Lack of commercial incentive

The Commitment: GSK

Reduced (tiered) pricing

Contribute to infrastructure

Promote greater collaboration

– Achieve critical mass

– Create community partnerships (PHASE, AMP, GAELF)

– Public-Private Research Partnerships (MMV, GATB,

DNDi)

– Incentivize and facilitate research

– Flexible approach to IP in the Least Developed Countries

Source: Andrew Witty Harvard speech 13th Feb 2009

Knowledge Pool

Objective: Drive the creation of medicines for

serious diseases for which there is little or no

commercial interest

Flexible approach with GSK IP

– create a pool of patented technology to advance research

into NTDs

– make available patented technology that could be used to

solve problems that arise in R&D

– contribute available know-how that may assist discovery

or development

Knowledge Pool

GSK’s Contribution:

– more than 800 patents/applications vs NTD’s

– Know-how that may assist in discovery or development

Alnylam’s Contribution:

– First partner – contributed key complementary

discovery technology

– “Fundamental” RNAi technology, >1,500 patents

– Know-how relating to the technology

Knowledge Pool

Pool Administrator

– Needed experience & expertise in

market-based incentives for R&D

creating global health innovator partnerships

providing guidance on global health priorities

– BIO Ventures For Global Health (BVGH)

Facilitate patent licensing

Disease-specific conferences

Partnering – promote utilization

Knowledge Pool Snowball Effect

GSK’s Patent Contribution: 13th Feb 2009

- 800 patents/applications

Alnylam’s Contribution: 8th July 2009

- First discovery technology partner

- BIO Ventures for Global Health (administrators)

MIT: 5th May 2010

– first academic institution

Technology Innovation Agency of South Africa

- first government agency to join pool

Knowledge Pool Patent Licenses

– Policy to incentivise development & access

– To any 3rd party with a bona fide research plan

– For research, manufacture anywhere in the world

– Know-how - donor discretion

– Limitations

Disease – NTDs (as defined by FDA)

Geographic – LDCs (as defined by UN)

Products not currently being marketed or developed

Neglected Tropical Diseases

NTDs

– Defined by FDA

– Account for

significant global

morbidity and

mortality

– In the absence of

commercial pull,

pharmaceutical

companies have

lacked incentives to

develop medicines

for these diseases

Neglected Tropical

Diseases

Morbidity/Mortality

Blinding trachoma 8 million people blinded/year

Buruli ulcer Tens of thousands of cases

Cholera More than 100,000 new cases/year; thousands of

deaths/year

Dengue fever 50 million infected; thousands of deaths/year

Dracunculiasis 5000 new cases/year

Fascioliasis At least 2.5 million new cases/year

Human African

trypanosomiasis

50,000 cases

Leishmaniasis 2 million news cases/year; 60,000 deaths/year

Leprosy 300,000 new cases/year

Lymphatic filariasis 40 million cases

Malaria 250 million new cases/year; 1 million deaths/year

Onchocerciasis 500,000 cases

Schistosomiasis 207 million cases; 280,000 deaths/year

Soil transmitted

helminthiasis

2.5 billion cases

Tuberculosis 8 million new cases/year; 2 million deaths/year

Yaws 460,000 new cases/year

United Nations - Least Developed Countries

Africa

Angola Ethiopia Niger

Benin Gambia Rwanda

Burkina Faso Guinea São Tomé and Príncipe

Burundi Guinea-Bissau Senegal

Central African Republic Lesotho Sierra Leone

Chad Liberia Somalia

Comoros Madagascar Sudan

Democratic Republic of the Congo Malawi Togo

Djibouti Mali Uganda

Euquitorial Guinea Mauritania United Republic of Tanzania

Eritrea Mozambique Zambia

Asia

Afghanistan Lao People’s Democratic Republic Solomon Islands

Bangladesh Maldives Timor-Leste

Bhutan Myanmar Tuvalu

Cambodia Nepal Vanatu

Kiribati Samoa Yemen

Latin America and the Caribbean

Haiti

Open Laboratory Drug Discovery at GSK

GSK Medicines Development Centre

Tres Cantos, Madrid

Collaborating solely on Medicines for Diseases of the

Developing World

Headed by Nick Cammack, SVP

n = 127 staff

Capacity to take up to 60 visiting scientists

Focused on R&D in malaria, TB and other neglected diseases

Collaborative with key funding partnerships

Projects prioritised by unmet medical need - not commercial benefit

GSK fighting Diseases of the Developing World

GSK Diseases of the Developing World High Level Operating Model at Tres Cantos

GSK internal resource:

MALARIA, TB,

OTHER `Open Lab´

Open Innovation - Malaria

Attempts to generate leads vs malaria

– GSK screened 2 million compounds vs the malaria

parasite P.falciparum to generate 13,500 hits

– Took 5 GSK scientists 1 year to complete

– GSK to publish the chemical structures & associated

assay data

– Data freely available via a user-friendly database

– Publication of Malaria work in high profile journal

General Principles of the Open Lab

Incoming projects will be aligned with GSK interests in TB,

malaria or other neglected diseases

Projects will benefit from the collaboration with GSK Drug

Discovery

A shared & open approach to innovation in neglected

diseases

Access to Patents and Know-how

– Partnerships

iThemba Pharmaceuticals

Emory Institute for Drug Discovery

… just one piece

Not “the solution” – one model; one piece of the jigsaw

Need to maximise contributions to the pool

Need to maximise research & collaboration under the pool

How large Corporates are

changing their business models

to embrace Open Innovation

The Academic DPU Concept

THE ACADEMIC

DISCOVERY PERFORMANCE UNIT

Innovative and flexible plans to:• Drive experimental medicine into the critical path

• Exploit the full potential of the asset

• Focus on the key “killer” question

Quality of thought of

Academics who are

leaders in their field

GSK’s drug

development

expertise

Greater ownership

Define the strategy

Integral to the project-team

Committed time

Exposure to risk

Greater transparency

Refine the strategy

Flexible support

Consistent and

maintained oversight

Share reward

High Quality Assets

The website

The Structural Genomics Consortium

CEO

Aled Edwards

SGC-Oxford

~65 staff

Chas Bountra

SGC-Toronto

~80 staff

Cheryl Arrowsmith

Scientific Committee

Kirk Clark, Chair, Novartis

Board of Directors

Wayne Hendrickson, Columbia, Chair

SGC-Stockholm

~25 staff

Pär Nordlund

Pharmaceutical

Industry

Public

Domain

GSK-WT-

SGC-NIH

Partnership

Chemical

Tractability

Chemistry (GSK)

Screening (WT-NIH)

Structure (SGC)

Chemical

Probes

No IP

No restrictions

Publication

Enable Academic

Target Validation

Drug

Discovery

Proprietary Target Validation

(Re)Screening

Lead optimization

Pharmacology

DMPK

Toxicology

Chemical development

Clinical development

Pioneer Drug Discovery

Pre-Competitive Proprietary

Q: Why place Chemical Probes in the Public Domain?A: Potent and selective small molecules provide complimentary (if not better) target validation to genetic methods as evidenced by their scientific impact

Compound Receptor Papers Citations Years h-index g-index

GW1929 PPAR 317 11063 14 47 100

GW0742 PPAR 392 7212 10 41 78

GW4064 FXR 250 4482 8 37 61

SR12813 PXR 127 4628 8 33 67

GW9662 PPAR 528 4513 8 32 50

GW3965 LXR 181 3073 7 29 53

GW7647 PPAR 118 2312 7 22 47

CITCO CAR 73 711 5 14 24

Data compiled from Google Scholar, October 5, 2007

All compounds were made available by GSK to the Public Domain

through commercial suppliers (Sigma-Aldrich and Tocris)h-index: a metric of scientific impact, combining quality and quantity of citations

g index: a modification of the h-index with more weight on highly-cited articles

Open Access Chemical Probes

Freedom of use

– Compound availability

– Chemical structure

– Potency & selectivity data

– Freedom to conduct

experiments & publish results

Protect IP

– Retain right to file patent on

the Chemical Probe

– Up to 6 months hold on

release of the chemical

structure

Open Access must achieve both goals

30

GSK Consumer Healthcare

> $8 billion sales in 120 countries

2nd largest OTC

Consumer Healthcare Company

3rd largest Oral Care Company

– > 30 leading brands, 5 > $400 million

Stand-alone R&D with 2 global sites

31

32

GSK Consumer HealthcareOpen Innovation Growth

GSK Consumer initially <20% external technology

Aggressive goal – 33% in 3 years

Achieved 33% in 18 months

Currently at 50%

33

Open Innovation Model

WANT

Meet

consumer

needs

FIND

Internal &

external

networks to

find

solutions

GET

Evaluation &

negotiation

phase to

secure the

solution

MANAGE

Relationship

building,

tools/metrics

to monitor

success

Developing a partner scorecard

34

Criteria

High

(8-10 pts)

Medium

(4-7pts)

Low

(1-3pts) Score Rationale for score

Depth/breadth of experience

Focused on science applicable

to GSK

Motivation & passion to

partner

Ability to actualize & manage

the relationship

Commitment to share/take

risks

Ability to undertake cross-

university collaboration

Emerging vs. established

player

Geographic proximity

*Partner selection: A Source of Alliance Success – Danielle Twardy-Duisters

Concluding Remarks

Summary on Open Innovation models

GSK promote a more open culture sharing ideas & data

Traditional relationships between Academia and Industry are being re-defined

Access to public funding will drive areas of science underpinning the pharmaceutical industry & will promote research into Neglected Tropical Diseases

Innovative partnership models allow both GSK & academics better access to science & technology

Thanks for listening

We are looking for

innovation wherever

it may originate