Pharma executives have been told of the “perfect storm”facing the industry and how various partnering opportunities could provide ameans of coming out the other end relatively unscathed.
Speaking at last week’s Economist Conference, Partnershipsin Pharma, Navjot Singh, leader, pharmaceuticals and medicals practice atMcKinsey & Co said an increasing number of late-stage drugs were beingsourced externally in a bid to fight the R&D challenge.
According to company research, partnered compounds haveenjoyed twice the overall success of projects done fully in-house over the pastdecade, Singh said. Between 1996 and 2007 just 10% of organic drugs were makingit through R&D to launch. This was compared with 20.3% of partnered drugsmaking it to launch in the same time period.
Partnering is a good way to hedge the risk and share thecosts, he said.
“The thing is,” noted James Eshelby, senior director,R&D business development at Pfizer, “all the low hanging fruit is gone.Diseases are more complex and more expensive. The innovation cycle is verycomplex and we have to be better, faster and more reliable and involved withlots of different parties… Deals are not easy to do. There is a lot ofbrokering, telephone calls and distrust to break down. So why do it? Becauseit’s important… [And] shareholders are wanting to see more partnerships tounlock that value”.
Philippe Lopes-Fernandes, head of global businessdevelopment and alliances management at Merck-Serono, spoke of the flexiblealliance structures the company is using in selecting compounds that areinteresting for the company, including equity stake, in-licensing,out-licensing, co-development, option deals and externalisation. As a resultmore than 60% of the company’s compounds are coming from partnerships with theplan to look for more early stage compounds, he said.
Externalisation deals, where someone else develops thecompound, can be extremely beneficial, added Shaun Grady, vice president strategicpartnering and business development at AstraZeneca. These sorts of deals canaccess the best internal and external science and compounds, stimulateinnovation, reduce cost and risk and create opportunities, he said. TheAnglo-Swedish firm has about 400 collaborations across the board.
Richard Barker, director general of the Association of theBritish Pharmaceutical Industry, agreed partnerships were the way forward forthe industry as it “entered an era of co-opertition”, which is already wellestablished in the IT and oil industries. Barker believed if the UK couldcombine its centres of excellence then it “could rival other centres across theworld, including Boston, San Francisco, Singapore and Shanghai”. This is partof the intent behind the Office for Life Science’s Super Clusters, he said. Thefirst one will be looking at immunology and inflammation and if successful willmove on to oncology, diabetes and cardiovascular disease.
“It’s a hugely risky time for any endeavour so don’t becomplacent,” Barker told the audience. “Research councils are under fundingconstraints. Any new thing is vulnerable.”