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Decline in Research and Development

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Research and Development
January 24, 2014 

Research and Development 

Dawn Van Dam, General Manager of Cambridge Healthtech Associates: The decline in revenue caused by the patent cliffs, has resulted in the pharma giants slashing their research and development budgets over the last couple of years. Unfortunately, the resulting slowdown in innovation has left the future looking bleak for some companies. 

In an interview with the Vice President and Chief Medical Officer at one of the world’s leading international research institutes, we discussed the inability of big pharmaceutical companies to effectively discover or partner to bring new drugs to the market, and the consequent issues that this causes in the industry. 

Of course, we came to a consensus that if big pharmaceutical companies do not improve their pipeline of compounds, research and development will continue to decline in a vicious cycle. The question is, what needs to be done?  

Not too long ago, the pharmaceutical industry was in a stage of rapid innovation. But this has changed. Pharmaceutical companies are now struggling with drug discovery for several reasons, as outlined below. 

All large companies eventually reach a point where their history creates a foundation of bureaucracy that tends to prevent innovation. In established organizations, the avoidance of risk is more important than the need to develop something new -- since there is already a history of success and financial stability. 

Even though startups or smaller organizations have fewer resources to allocate to research and development, these businesses traditionally have more successful innovation than large companies. This is often because scientists are more passionate and hungry to succeed in smaller organizations. Success in smaller organizations is measured by the ability to ‘stay alive’, which often goes beyond the ability to follow the rules of a large bureaucracy. The future of the small company depends on the success of the individual and vice versa. Therefore, there is a greater incentive for employees to work harder and longer hours, and to innovate along the way. 

This realization, combined with a decrease in overall funding, has led to financial cuts in research and development programs in the industry. In the past few years, big pharmaceutical companies have made severe budgetary cuts. According to an article by the Royal Society of Chemistry, published in 2010, Pfizer, GSK and AstraZeneca were all looking to decrease their research and development budgets by at least $1 billion in the next few years. AstraZeneca alone had planned to cut roughly 1,800 research and development positions, leaving many talented drug development scientist without a job. Unfortunately, there are not many places for these people to go. 

Pharmaceutical expertise does not translate well to other industries. And, within the industry, generic firms do not need these scientists, and small pharmaceutical companies do not have the resources to employ more scientists. A few of these scientists will go on to start their own companies, but even these will most likely stall when additional funding is needed. Some scientists will go back to school for a medical or business degree, while others may leave the industry completely. 

In our discussion, the Vice President and Chief Medical Officer discussed the fact that, generally speaking, big pharmaceutical companies do not have very good drug pipelines, with many of their prominent moneymakers having come off patent. During the interview, this person suggested that once this happens, “it will become virtually impossible to get something through the first proof of concept, to a study in man.” Although there are plenty of people innovative enough to drive research and development, the discovery process is bottlenecked by a lack of financing, and the scientists capable of innovation are not in the position to make new discoveries due to bureaucracies or other constraints. 

The industry is trying many solutions to identify the “light at the end of the tunnel.” For example, with advancements in genomics and sequencing, and the addition of sophisticated bioinformatics, everyone is hoping to turn this field, which appears to be full of opportunities, into commercial success. 

By bringing together leading professionals in the life sciences, Cambridge Healthtech AssociatesTM (CHATM) believes that online communities, such as the Drug Safety Executive Council (DSECTM) community, will provide a platform for collaboration and discussion of ideas. Our goal is to bring conversation and solutions to prominent issues in the industry, like the one discussed here. 

We welcome your feedback and comments – join us in this important discussion.

Collaboration in Research: Can Sharing Data Increase Industry Efficiency?

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Dawn Van DamSeptember 18, 2012 

Dawn Van Dam, General Manager, Cambridge Healthtech Associates :  After interviewing numerous professionals in the life science industry over the past six months, I've seen a common theme emerge: in an ideal world, sharing data with other companies and institutions would allow the development of better technologies and faster solutions. Words like "synergy" and "ecosystem" were used by interviewees to paint a picture of an idealized healthcare landscape in which breakthroughs are accomplished through collaborative efforts - where researchers share both their successes and failures.

In reality, however, the industry provides scientists with incentives that understandably keep them from sharing their findings with other industry leaders. Pharma researchers must protect their IP in order to preserve company integrity and maintain job security, and academics need to keep their findings quiet as they vie for the chance to publish. Therefore redundancies are common in research and those coveted breakthrough results don’t come along as often as they could!

It seems that professionals across the healthcare spectrum - scientists to CEOs - believe that collaboration in research through sharing data and findings is the solution to translate research to the clinic faster. Could increased collaboration in research really help push the industry forward, or is it simply too idealistic for a cut-throat, business-oriented world?

Many of the industry professionals who support collaboration in research suggest creating an incentive system that encourages data-sharing. One, a CTO and Head of R&D for a small organization focused in bioinformatics, believes strongly in combining efforts for more efficient research. In an interview for our study, he highlighted the cost/time benefits of collaboration: "I have an impression that many people do the same thing in a slightly different way, and each one with different funding in a different place in the world. So, I have the impression that a lot of energy is actually redundant." Sharing data can ensure that those vital funds aren’t being used up by redundant experiments and, instead, are put toward achieving new breakthroughs.

Sharing data has benefits for research, but could also have serious implications for the business side of the industry. While redundant research depletes resources throughout the industry, competition within the industry forces researchers to work harder and faster towards making breakthroughs. If collaboration in research and data sharing eliminated the threat of a competitor making an important discovery first, would scientists work more slowly toward scientific discoveries?

Perhaps one solution to increase industry efficiency is to develop public-private partnerships, as a CEO and founder of a small European bioinformatics company described. "The [private enterprises] find it difficult to access these data and make use of them to ultimately push forward and develop the best drugs. I think that when you read about good public-private partnerships, where there are these collaborative efforts between the academic world and the private world, that’s when it becomes most effective."

Industry and academic partnerships allow for data sharing and collaboration in research on a smaller and more manageable scale, while maintaining that competitive edge necessary to drive industry forward at a fast pace. With shared resources and combined funding sources, these partnerships can make greater strides in research and avoid repeating the same mistakes as others in the industry, or drawing redundant conclusions.

A contained and organized system, like the public-private partnership, or a consortium, is a small-scale initiative that can encourage collaboration in research and could ultimately help the entire industry function more efficiently.

We would like to acknowledge and thank all of those who provided their thoughts for this six-month study.

If you would like more information about how Cambridge Healthtech Associates™ help you form, implement or manage a collaborative project in life sciences research and development, please contact me. We have completed many collaborative projects over the last seven years; consequently, our expertise and experience are unparalleled in the industry.

Safety Biomarker Trends

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Dawn Van DamJuly 17, 2012 

Dawn Van Dam, General Manager, Cambridge Healthtech Associates : Recently, Cambridge Healthtech Associates™ (CHA) completed interviews with preclinical safety experts from large and small biopharmaceutical companies, focusing on middle and senior management levels of preclinical safety/toxicology groups. CHA specializes in conducting evaluations of new technologies in the marketplace and we have completed many technology evaluation projects over the last seven years. We were able to apply our expertise to identify trends in safety biomarker utilization within these top-tier companies. 

Ernie Bush, PhD, our Scientific Director in drug safety and development, led this ground-breaking research project. Dr Bush has nearly 30 years of biomedical research, focused on preclinical safety assessment and the navigation, evaluation and prioritization of biopharmaceutical research initiatives. Dr Bush's experience in several senior decision-making roles at big pharma was critical for recommendations made as an outcome of this consulting and market research initiative. 

One key conclusion from the research was that knowing the levels and profiles of various safety biomarkers helps to improve understanding of the mechanism and relevance of the animal studies relative to human clinical safety prediction. Most interviewees found the inclusion of systems or pathway modeling into the selection and interpretation of safety biomarkers to be an attractive new element.

As expected, there were considerable differences among companies in which tests they routinely run, and at what stage in the early safety-testing process they run the tests.  Despite these differences, in attempting to benchmark current ‘early’ safety tests in drug discovery - those used routinely by companies (>50% of the time) - we found the following trends: 

- Large companies are far more aggressive than smaller companies in terms of the number of tests run, and how early they are run (this trend also reappears below)
Most companies are using physical chemical prediction software, and about half are using DEREK or other forms of gene or DART prediction software.  Most companies conduct HCA cell health parameter screening of some form, with the exception of small companies.    
- Most companies, large and small, did a form of off-target screening (usually CEREP), with smaller companies performing the screens later in the process. - The range of tests run at large and small pharmas was from about 20% of the tests considered, to over 90%, but the average was about 60%. 

In a future article, we will discuss additional findings from our safety biomarkers research. In the meantime, if you have questions or would like more information on our research projects, please contact me.   

We have scientific experts in many areas, including drug safety, next-gen sequencing, genomics, bioinformatics, diagnostics, biomarkers, protein engineering, drug discovery, preclinical safety, high-content analysis, biologics, and more.  

DSEC... Open for Business!

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Dawn Van DamMarch 26, 2012 

Dawn Van Dam, General Manager, Cambridge Healthtech Associates : If you are finding us for the first time… welcome. Our vision is for the Drug Safety Executive Council online community to become the platform to both network with peers and exchange ideas related to advancing drug safety solutions. Up until now, membership in the DSEC community has been limited to bio-pharma company employees. To engage a wider audience in the drug safety space, the new DSEC will include members from bio-pharma, along with governmental agencies, academia, CROs and technology providers. 

I invite you to take a look around the new site, and we welcome your feedback.

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