Wednesday, October 19, 2016

Next-Generation Innovation


Streamlined strategies secure pharma’s future as the industry thinks outside the pill box

By Karen Langhauser, Chief Content Director
As drug pricing reaches what some might argue is the height of public and political scrutiny (thanks Martin Shkreli), consumer expectations rise, and the blockbuster model continues its well-documented demise, the market has made innovation mandatory for the pharmaceutical industry. Bottom-lining it, PcW stated in its “Managing Innovation in Pharma” report, “the rewards for success are high and the risks of failure can threaten a company’s very survival.”
To say that the pharmaceutical industry lacks innovative ideas would be doing a tremendous disservice to an industry that has sustained decades of respectable growth along with a healthy list of historic medical achievements. More recently, the last five years of Thomson Reuters Top 100 Global Innovators lists consistently report pharma as one of the largest industry sectors represented.
Rather than isolated examples of innovation in the form of single new molecules, today’s market calls for next-generation innovation in the form of innovation strategy.

For many drug manufacturers, innovation strategy involves streamlining an increasingly complex manufacturing system. This type of next-generation innovation wades through the growing sea of new ideas and emerges with the strategies that deliver a clear, focused value. How does this play out in pharma in 2016? In the form of targeted acquisitions and partnerships, personalized treatments, efficient outsourcing partners and properly integrated technologies.
Delivering authentic innovation in today’s pharmaceutical environment is a momentously complex task with one very succinct emphasis. That emphasis, according to Dr. Clive Meanwell, CEO at The Medicines Company and recent recipient of the 2016 Dr. Sol J. Barer Award for Vision, Innovation and Leadership, is a “sharp focus on what customers really need.” 
MERGERS, ACQUISITIONS AND PARTNERSHIPSPwC’s Health Research Institute’s annual reportpredicts that 2016 will be the “year of merger mania” in healthcare, specifically mentioning the pharmaceutical and life sciences sector. According to the report, “drug companies are looking beyond traditional M&A by acquiring ‘beyond-the-pill’ products and services to bolster their portfolios and pipelines of drugs.”
Consolidation has typically been a dirty word in pharma and rarely appears in the same sentence as innovation. But a handful of forward-thinking companies are recognizing the need to innovate beyond merely acquiring new molecule formulations. Dwindling (though definitely not gone) are the days when pharmaceutical companies would hunt for deals to boost up specific therapeutic areas, aiming to completely dominate that space. Under immense pressure to optimize performance, today’s companies are taking a heavy look at the systems and services behind these new drugs and making strategic acquisitions with an eye toward innovative services and digital technology. 
Teva Pharmaceutical made a strong move in the digital space in September with its purchase of smart inhaler company, Gecko Health. Prior to that acquisition, Teva, in collaboration with Phillips Healthcare, launched Sanara Ventures in Israel. The collaboration will invest approximately $26 million to support 40-50 early-stage digital healthcare and medical device companies in the next eight years. 
The last few years have seen numerous innovative crossovers as pharma looks toward unconventional partnerships, specifically in the tech field. In 2014, Google’s R&D business, Calico, partnered with AbbVie to focus on age-related diseases. Around the same time, Google X Labs teamed with Novartis to develop glucose monitoring, smart contact lenses and early last year, partnered with Biogen to explore wearables technology in multiple sclerosis.
But M&A is not always about innovation. Sometimes it’s about money — often in the form of tax inversion deals. The $160 billion dollar 2015 Pfizer-Allergan merger created the world’s biggest drug company — and will move Pfizer’s domicile from the U.S. to Ireland, dropping its corporate tax rate by about 7-8% percent. Pfizer is not alone in capitalizing on this tactic. In 2014, Mylan acquired Abbott Labs and moved its headquarters to the Netherlands. In 2014, AbbVie reconsidered its $54 billion acquisition of Shire — a deal that would have allowed AbbVie to reincorporate in Britain — after the Treasury Department announced new rules taking aim at inversion deals. According to a Bloomberg report, about 51 U.S. companies have reincorporated in low-tax countries since 1982, including 20 since 2012.
TARGETED OUTSOURCING PARTNERSAs their goal is to serve the unmet needs of the pharmaceutical and biotech industries, contract manufacturing movements are often reflective of the drug industry demands. Like the industries it serves, the contract services market has not been immune to consolidation. In fact, according to Visiongain’s “Pharmaceutical Contract Manufacturing World Industry and Market Outlook 2015-2025,” about 30 CMOs account for more than half of the industry’s revenues and, in the last three years, there have been 18 acquisitions in the CMO space.
Despite a reduction in supplier options, pharmaceutical manufacturers are becoming smarter and more specific when it comes to choosing contract manufacturing partners, expecting a higher degree of flexibility.
According to Peter Soelkner, managing director at Vetter Pharma, “drug companies are making every effort to reduce and simplify their network of different service providers. What they want to achieve, whenever possible, is a solution that equates to ‘one-stop-shopping.’ They expect that any partner they choose to work with must be strategic in their efforts, not simply tactical.”
Vetter is in the process of multiple facility expansions and technology upgrades, including the implementation of an internally engineered restricted access barrier system (RABS) concept for increased operational excellence in aseptic manufacturing. The RABS technology allows for faster start-up time, ease of changeover and reduced capital costs.
As pharmaceutical companies ramp up investment in flexible in-house technologies and continue acquiring their own contract services providers, contract manufacturers are understanding the need to specialize — especially surrounding the growth of biologic drugs and biosimilars, including the growing demand for novel therapies. CMOs are increasing their investments in single-use technologies for biopharmaceutical manufacturing and continuous manufacturing processes.
Aware of their critical role in an increasingly sophisticated global supply chain, today’s contract manufacturers are innovating to provide high quality, flexible production.
INTEGRATING TECHNOLOGYTrends and advancements in the pharmaceutical industry tend to trigger cascading responses from linked industries, such as equipment, packaging and drug delivery devices. Take, for example, the continued focus on patience compliance and biologics, which has evolved into a growing market for combination products — the marriage of biological products, drug containers and drug delivery devices.
Drug manufacturers who have typically only dealt with making drugs have needed to broaden their in-house expertise or contract manufacturing reach to be able to address the technical, commercial and regulatory issues that have emerged with combination devices. 
According to Jessica Buday, senior manager, Process & Operational Excellence, Ferring Pharmaceuticals, the pharmaceutical landscape today involves, “being prepared for not just the new products, but the new technology that is required (preferably in-house) to manufacture them. For instance, drug delivery now involves more than just tablets and vials — there is the entire world of combination devices. The companies that master development and validation of these devices will put themselves at the forefront. In manufacturing, that includes making sure we have the equipment for commercializing these devices.”
Ferring Pharmaceuticals, known for its reproductive health treatments, also focuses on offering more effective drug-delivery devices, including needle-free devices and transdermal delivery technologies. In March of last year, Ferring entered the U.S. pediatric endocrinology market with the acquisition of Zomacton growth hormone deficiency treatment and with it, the Zoma-Jet needle-free delivery device from Teva Pharmaceutical.
For West Pharmaceutical Services, a company at the forefront of combination devices, successful drug therapy is a comprehensive strategy. “Our customers work hard to come up with innovative new molecules, but a drug molecule is completely useless unless delivered to patients in the best way,” says Graham Reynolds, vice president and general manager, Biologics, West Pharmaceutical Services. For West, there are four elements that need to be considered in successful drug therapy: the molecule itself, the container that holds it, the delivery system that administers it and the fourth — often forgotten element — patience adherence. “The interfaces between these elements are as critical as the phases themselves,” adds Reynolds. 
These “interfaces” are also driving equipment trends. For example, the increasingly important role that aseptic processing single-use systems play in the fill/finish process. Single-use components are helping manufacturers decrease time spent on cleaning and validation, thus saving them money. The newer, disposable technology enables fully integrated, continuous production.
It’s not so much the stand-alone technologies that drugmakers are reaching for, but rather, targeted innovation that enhances overall the effectiveness of the process. 
PRECISION MEDICINEPrecision medicine, as defined generally by the National Institutes of Health, is an “emerging approach for disease treatment and prevention that takes into account individual variability in genes, environment and lifestyle for each person.” While still in somewhat of a nascent stage, public interest has grown since last January when President Obama announced the Precision Medicine Initiative (PMI) in his State of the Union address.
As the pharmaceutical industry moves forward with its quest to innovate and streamline, this patient-centered, data-driven approach makes sense. Brad Campbell, president and COO of Amicus Therapeutics, points to the rise of precision medicines as a real example of innovation. Precision medicine, according to Campbell, enables us to “drive science toward not just a specific disease but a specific genetic substrate. It helps improve the risk-benefit ratio, removing ‘waste’ from the system.” 
Amicus is in the process of seeking global approvals for its lead product candidate, migalastat, a personalized medicine in late-stage development to treat individuals with Fabry disease. Fabry disease is a rare, inherited disorder caused by deficiency of an enzyme called α-galactosidase. In terms of Amicus’ work on its migalastat treatment, this precision medicine approach is designed for patients with “amenable mutations,” that is, specific mutations that are capable of responding to oral migalastat as a monotherapy treatment. Amicus’ extensive preclinical and clinical work has characterized the properties of nearly 800 known Fabry disease-associated mutations in an effort determine which patients are most eligible for treatment.
The result? “The use of elegant science to identify, with high precision, which patients will benefit,” states Campbell.
In June 2015, the National Cancer Institute (NCI) announced a precision medicine trial touted as “the first study in oncology that incorporates all of the tenets of precision medicine.” The trial, called NCI-MATCH, seeks to determine whether targeted therapies for people whose tumors have specific gene mutations will be effective, regardless of their cancer type. Obama’s PMI budget request included $70 million for NCI to scale up efforts to identify genomic drivers in cancer. The robust list of pharmaceutical partners involved in NCI-MATCH includes Novartis, Pfizer, Boehringer Ingelheim, AstraZeneca, as well as device manufacturer, Thermo Fisher Scientific.
NEXT-GENERATION DEMANDSSpecifically speaking about precision medicine, Campbell stressed the industry’s need to “move away from the shotgun approach” to treatment, but perhaps this statement has wider implications for today’s pharmaceutical industry. The practice of cranking out rapid-fire innovation in the form of new molecules with the hopes of finding the next blockbuster is being replaced by targeted innovation strategies that demonstrate actual patient value and can be duplicated across an enterprise.
Today’s patients are more informed and connected with their health decisions than ever before. With that in mind, pharmaceutical manufacturers are making smarter choices when it comes to acquisitions, new technology and contract partners. Next-generation patients demand next-generation innovation, and the pharmaceutical industry is rising to the challenge. 

Editor’s note: Special thanks to our friends at Choose New Jersey and BioNJ for their assistance in the form of sharing their vast network of innovative contacts with us. Please visit them at

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