Innovative Strategies and Models for R&D Success

The Evolving Networked Pharma Company

Publication Date	August 2008
Publisher	Business Insights
Product Type	Report
Pages	196
ISBN Number	not applicable
Product Code	RBI00252

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Summary

Many pharma companies are currently engaged in wide-scale R&D restructuring, adopting a biotechnological approach to drug development by establishing disease-focused R&D units, R&D spin-offs, strategic partnerships and joint ventures. This trend has been reinforced by the emergence of public/private partnerships, co-operatives and open-source research initiatives that have encouraged companies to target previously neglected disease areas such as biotherapeutics and vaccines. Emerging markets are also driving change throughout R&D, with companies increasingly internationalizing their processes to take advantage of tax incentives, government investment, cheap labor and technology specialists.

'Innovative Strategies and Models for R&D Success' is a new report published by Business Insights that explores how the latest pharma R&D strategies are improving productivity and containing costs. The effectiveness of new and emerging approaches to drug discovery and development are assessed, with over 40 detailed case studies of partnerships, alliances, collaborations, outsourcing and in-licensing opportunities. This report also explores the potential benefits and disadvantages of key offshore markets including China, India and Russia and examines the recent internal restructurings of major companies such as AstraZeneca, GlaxoSmithKline, Pfizer and Roche.

Use over 40 detailed case studies to assess new R&D approaches, and identify which strategies are most effective for different company sizes, therapeutic area focus, product portfolios and geographical locations...

Key findings

The pharma industry is migrating towards fully-integrated networked pharmaceutical companies (FINPCos) that can improve productivity and effectively exploit the cost-savings associated with R&D internationalization. This model maximizes investment returns through the use of innovative partnerships and strategic alliances.
Major companies including AstraZeneca, GSK, Roche and Pfizer have recenty undertaken major R&D restructuring. Changes have typically involved strategic risk-sharing partnerships, collaborations, joint ventures, spin-offs and contract agreements.
Big Pharma are increasingly engaging in a range of risk-sharing partnerships with academics, federal agencies, contract providers, biotechs and other pharma players. Such alliances alleviate the risks of drug discovery and can improve R&D efficiency.
Up to 30% of clinical studies are currently outsourced, and this figure will rise to 50% by 2010. This growth will be driven by companies consolidating their focus upon core competencies while contracting out secondary R&D programs to specialists.
Virtual pharma models can reduce drug development costs by at least 25% and development times by up to 50%. Niche pharma companies have emerged to add value through strategic outsourced clinical developments that are out-licensed to established players.

Key questions answered

What are public private partnerships and how can they be used to expand R&D programs?
How will private federal partnerships improve technology transfer to the industry?
To what extent can R&D outsourcing reduce development times and contain costs?
Who are the key contract service providers in the emerging markets and what R&D related services do they offer?
Which alternative R&D strategies are being used to attract investment and drive product development?
How can pharma companies most effectively ensure shareholder value in the future?

Key issues examined by this report

Benefits of R&D restructuring. The redesign of pharma R&D models within large companies is creating an entrepreneurial environment that enhances the flow of information and facilitates faster decision-making during product development. Strategic networking is also helping companies to expand their portfolios and develop a new generation of progressive blockbusters.
New R&D approaches reduce consolidation. Innovative R&D strategies such as risk-sharing partnerships and strategic/tactical outsourcing are helping to combat the declining levels of productivity that are driving industrial consolidation.
Role of 'R&D spin-offs'. R&D spin-offs enable pharma companies to streamline their portfolios and reduce overheads, whilst retaining the option to license back successful candidates at a future date. The speed of product development can also be significantly improved away from internal pharma processes.
Influence of emerging markets. Offshore R&D investments in emerging countires are becoming increasingly attractive following the lifting of WTO restrictions, tightened IP protections, infrastructure improvements and tax exemptions. India, China and Russia offer the most significant cost advatages.

Content

Innovative Strategies and Models for R&D Success
- Executive Summary
- Evolution of R&D Strategies: A Moving Target
- Private-Public Partnerships
- Private-Federal Partnerships
- Outsourcing: Home Territories
- Offshoring: Emerging Markets
- In-licensing: Virtual Pharma Models
- R&D Spin Offs
- Internal Reorganization, Market Trends & Conclusions
Chapter 1 Evolution of R&D Strategies: A Moving Target
- Summary
- Introduction
- Trends in R&D
- The Evolving Network R&D Model
Chapter 2 Public-Private Partnerships
- Summary
- What is a PPP?
- Open-source R&D
- Applications to the pharma industry
- Alliance Case Studies
- Case Study: GlaxoSmithKline and the MMV, MVI and GATB
- Case Study: Bayer and the TB Alliance
- Crowd Sourcing Case Studies
- Case Study: InnoCentive & Scienteur Corporation
- Technology Transfer Case Studies
- Case Study: Technology transfer PPPs with NIH
- Conclusions
Chapter 3 Private-Federal Partnerships
- Summary
- Cooperative Research & Development agreements
- Small Business Innovation Research Programs
- Regulation enabling technology transfer
- Technology alliances
- The Cooperate Research (CORE) database (US alliances)
- The Cooperate Research (CORE) database (International alliances)
- Publicly funded medicines
- Applications to the pharma industry
- Technology transfer case studies
- Case Study: Taxol technology transfer NIH to BMS
- Case Study: Erythropoietin technology transfer to Amgen and Johnson &
- Johnson
- Case Study: FluMist technology transfer NIAID to Aviron
- Case Study: Velcade technology transfer from NIH to Millennium
- Pharmaceuticals
- Conclusions
Chapter 4 Outsourcing: within mature markets
- Summary
- Introduction
- Contract Research Organizations
- Outsourcing services
- Investment in contract research
- Balancing Outsourcing Portfolio: Home & Abroad
- Shift from North America & Western European Contract Services
- Shift in customer base
- Shift in partnerships
- Strategic Partnerships & Risk Sharing
- Strategic partnerships case studies
- Case Study: Accenture & Wyeth
- Case Study: Functional service providers & Pfizer
- Risk sharing case studies
- Case Study: NovaQuest & Eli Lilly & ProStrakan
- Case Study: PPD & Ranbaxy/Takeda/ALZA/Accentia Biopharmaceuticals
- Conclusions
Chapter 5 Offshoring: emerging markets
- Summary
- Introduction
- Offshore outsourcing
- Investment in offshore contract research
- Outsourcing services in China
- Contract R&D in China
- Contract clinical research in China
- Leading R&D players in China
- R&D Contract Services case study
- Case Study: WuXi & AstraZeneca
- Risk Sharing Agreement case studies
- Case Study: Hutchison MediPharma & Eli Lilly, Merck KGaA and Procter & Gamble
- Research Collaboration case studies
- Case Study: Chemizon & Takeda
- Case Study: Sunway Biotech & Genzyme
- Case Study: Sanofi-Aventis & the Chinese Academy of Medical Sciences
- Joint venture case studies
- Case Study: Charles River Laboratories & Shanghai BioExplorer
- Case Study: Eli-Lillys Asian Ventures
- Key Issues in China
- Outsourcing services in India
- Contract R&D in India
- Contract clinical research in India
- Leading R&D players in India
- Risk sharing agreements case studies
- Case Study: Advinus & Merck & Co
- Case Study: Aurigene & Merck Serono
- Case Study: Dr Reddy Laboratories & ClinTec International
- Case Study: Ranbaxy & GlaxoSmithKline/Merck & Co
- Case Study: Nicholas Piramil India Ltd / Eli Lilly and Merck & Co
- Research partnership case studies
- Case Study: Jubilant Biosys & Amgen
- Case Study: Syngene & Bristol-Myers Squibb
- Case Study: GVK Bio & Wyeth
- Case Study: Dr Reddy & RheoSciences
- Case Study: Bristol Myers Squibb & Accenture
- Product in-licensing case studies
- Case Study: Glenmark Pharma & Eli Lilly
- Case Study: Glenmark Pharma & Forest Labs
- Key issues in India
- Outsourcing services in Russia
- Contract R&D in Russia
- Contract clinical research in Russia
- Leading R&D players in Russia
- Research collaboration case studies
- Case Study: Chembridge & Pfizer
- Case Study: ChemDiv & Schering-Plough
- Key issues in Russia
- Conclusions
Chapter 6 In-licensing: Virtual Pharma & Technology Aggregators
- Summary
- Introduction
- Virtual pharma companies and technology aggregators
- Virtual pharma models
- Virtual pharma models evolved from the pharma industry
- Case Study: Fulcrum Pharma plc
- Case Study: Chorus
- Case Study: TAP Pharmaceuticals
- Developing novel compounds case studies
- Case Study: Concordia Pharmaceuticals
- Case Study: Celtic Pharma LCC
- Case Study: VDDI Pharmaceuticals
- Repositioning old compounds case studies
- Case Study: AGI Therapeutics
- Case Study: Arachnova Ltd
- Conclusions
Chapter 7 R&D spin offs
- Summary
- The motivation behind R&D spin offs
- Pharma R&D spin offs
- Case Study: AstraZeneca & Albireo
- Case Study: Pfizer & Esperion
- Case Study: Sanofi-Aventis & Novexel
- Case Study: Roche & Basilea
- CRO R&D spin offs
- Case Study: Ranbaxy Life Science Research Ltd & Daiichi
- Case Study: Sun Pharma Advance Research Company Ltd
- Case Study: NPIL pharma R&D de-merger
- Conclusions
Chapter 8 Internal reorganization, market trends and conclusions
- Summary
- Introduction
- Internal Reorganization
- Large pharma R&D models
- AstraZeneca
- GlaxoSmithKline
- Pfizer
- Roche
- Emerging Market Trends
- A complex R&D process
- A shift in R&D focus & attrition rates
- A shift in therapeutic focus
- Fragmentation of the industry
- Geographical alignment of the industry
- Conclusions
- Index
- Glossary
- Bibliography & Endnotes
List of Figures
- Figure 1.1: Pharma R&D spend and trial costs, 2004-2009e
- Figure 1.2: Global R&D spending by development phase ($bn), 2007
- Figure 1.3: Biotech R&D spend and funding ($bn), 2004-2009e
- Figure 1.4: Biotech R&D spend and funding ($bn), 2001-2007
- Figure 1.5: Cost to develop a new biopharmaceutical (2005 $m)
- Figure 1.6: Origin of New US drug approvals, 2000-2006
- Figure 1.7: Migration from traditional to an externally driven R&D platform
- Figure 2.8: R&D models A) Traditional approach and B) PPP approach
- Figure 2.9: PPPs - neglected disease projects
- Figure 2.10: PPP Developmental timelines
- Figure 2.11: Portfolio of the MMV
- Figure 3.12: CORE - technology alliances (number of alliances), 1985-2003
- Figure 3.13: Global and US-based technology alliances (number of alliances), 1985-2003
- Figure 3.14: Global technology alliances by region (number of alliances), 1985-2003
- Figure 3.15: FluMist developmental timelines
- Figure 4.16: Outsourcing Services
- Figure 4.17: Global Expenditure on R&D and Contract Research
- Figure 4.18: Pharma R&D Expenditure and spend on contract services by Phase, 2007
- Figure 4.19: Three Stages of CRO Evolution
- Figure 4.20: Strategic Outsourcing
- Figure 5.21: Areas for offshore contracting
- Figure 5.22: Average global clinical trial cost by region ($ per patient), 2006
- Figure 5.23: Indexed clinical trial costs by country compared to the US per patient by region, 2006
- Figure 5.24: Therapeutic areas for Russian CRO trials (2006)
- Figure 6.25: Virtual Pharma R&D Model
- Figure 6.26: Virtual Pharma Inter-relationships
- Figure 6.27: Chorus Time & Cost Savings to Proof-of-Concept
- Figure 6.28: VDDI Pharmaceutical R&D Model
- Figure 7.29: Benefits of R&D spin offs
- Figure 7.30: Esperions rebirth
- Figure 8.31: AstraZenecas R&D Timeline
- Figure 8.32: AstraZenecas Productivity gains
- Figure 8.33: The Evolution of GSK's R&D Model
- Figure 8.34: Complexity of the R&D process
- Figure 8.35: Pfizers R&D Timeline
- Figure 8.36: Roches Decision Making R&D process
- Figure 8.37: Roches R&D Timeline
- Figure 8.38: Complexity of the R&D process
- Figure 8.39: Increased collaboration within the industry
- Figure 8.40: Shift in R&D focus and attrition rates
- Figure 8.41: Shift in therapeutic focus
- Figure 8.42: Recent biopharma deals
- Figure 8.43: Fragmentation of the industry
- Figure 8.44: The Future of R&D Fully-Integrated Networked Pharmaceutical Companies
List of Tables
- Table 2.1: PPPs public and industry partners
- Table 2.2: R&D costs of PPP projects
- Table 3.3: Approved medicines developed through CRADA research
- Table 3.4: Recent CRADA projects under development
- Table 3.5: Recent CRADA projects under development (continued)
- Table 4.6: Advantages & disadvantages of CROs based on geography
- Table 4.7: Leading International CROs
- Table 5.8: Leading R&D Players in China
- Table 5.9: Leading R&D Players in India
- Table 5.10: Leading R&D Players in Russia
- Table 6.11: Virtual Pharma & Technology Aggregators
- Table 6.12: Examples of Therapeutic Switching
- Table 7.13: Recent pharma R&D spin offs
- Table 7.14: Recent CRO R&D Spin offs
- Table 8.15: AstraZeneca Recent R&D Activities
- Table 8.16: GlaxoSmithKlines recent R&D acquisitions
- Table 8.17: GlaxoSmithKlines recent strategic research collaborations
- Table 8.18: Simplified R&D Organization at Pfizer
- Table 8.19: Pfizers Recent R&D Activities
- Table 8.20: Roches Recent R&D Activities