Ending Stagnation: How Collaboration Tools Are Enabling a New Era of R&D

May 2015 FierceMarkets Custom Publishing, Sponsored By: Ending Stagnation: How Collaboration Tools Are Enabling A New Era of R&D share: share: FierceMarkets Custom Publishing, Sponsored By: Ending Stagnation: How Collaboration Tools Are Enabling A New Era of R&D Ending Stagnation: How Collaboration Tools Are Enabling A New Era of R&D The disaggregation of drug research Sponsored Content: Going Beyond Travel Cost Savings to Biopharma R&D, from drug discovery through to late- with other estimates ranging from $1 billion to $5 Achieving Productivity phase clinical trials, suffers from two fundamental, billion, almost everyone agrees biopharma R&D is a Gains near industry-threatening problems: It is too slow shockingly expensive endeavor. and too expensive. And with payers and the public How Polycom is facilitating getting increasingly vocal about drug prices, the Companies have traditionally propped up their remote research long-standing tactic of passing on costs to the expensive R&D operations by charging ever-higher healthcare system is on shaky ground. Something prices for products that win approval. However, How video is enabling fast, has to change. Fortunately for the industry, tools and governments in Europe and payers in the U.S. efficient clinical trials tactics that can shave time and money from drug have started to push back against high drug prices, development already exist. particularly as the huge price tags have spread from What next? The future orphan drugs to products meant for much larger of R&D The need for cost savings is growing more and more markets. The hepatitis C price war between AbbVie clear, as drug development becomes an increasingly and Gilead is the current poster child for the payer expensive process. The Tufts Center for the Study protest, but it’s likely to be just the first of many of Drug Development (CSDD) estimates the cost of attempts to curtail costs. Cardiovascular drugs and bringing a drug to market rose by 145% in constant cancer treatments are among the next targets for currency between 2003 and 2013. That equates to cost-conscious payers. a compound annual growth rate of 8.5%, pushing the total outlay from $1 billion to $2.6 billion over a One way to remain profitable in such an environment decade. Some people have disputed the math, but is to shorten R&D timelines. This saves money Ending Stagnation: How Collaboration Tools Are Enabling A New Era of R&D // May 2015 share: FierceMarkets Custom Publishing, Sponsored By: upfront and adds to profits later, particularly in the table. Every day and dollar count. Much of the competitive therapeutic fields. Gilead’s Sovaldi, for current cost of drug development is tied to the high example, was clearly superior to other available failure rate: Just 10% of drugs that enter Phase I hepatitis C drugs and was priced accordingly. But make it to market, according to a paper published in Ending Stagnation: once competition arrived in the form of AbbVie’s Nature Biotechnology in 2014. That may fall as our How Collaboration Viekira Pak, the price Gilead could charge for Sovaldi understanding of biology grows, but companies can Tools Are Enabling A fell rapidly. Sovaldi is forecast to sell for an average still take immediate steps to cut the time and money it New Era of R&D discount of 46% this year. In this payer environment, takes to establish whether a drug will succeed the value of shaving months off R&D timelines for or fail. The disaggregation of drug drugs in competitive indications is higher than ever. research In the absence of better ways to pick winners based on preclinical data, fast and lean operations that Sponsored Content: “The cost of bringing a drug to market rose by take drugs from one go/no-go decision to the next Going Beyond Travel 145% in constant currency between 2003 and as efficiently as possible are the best option for Cost Savings to 2013” companies. Unfortunately, adopting such a model Achieving Productivity brings up some obstacles. Gains The disaggregation of drug research How Polycom is facilitating Even a four-month cut to the R&D timeline can make In the late 2000s, the triple blow of the recession, the remote research a difference, as Sanofi and Regeneron showed loss of patent protection on key products and faltering recently when they paid BioMarin $67.5 million for R&D pipelines forced both Big Pharma and biotech to How video is enabling fast, a voucher that will shorten the FDA’s review of their rethink their approaches to organizing and financing efficient clinical trials PCSK9 cardiovascular drug by that amount of time. drug research. With Big Pharma losing patent The four-month saving is of particular value to Sanofi protection on drugs with annual sales north of $100 What next? The future and Regeneron because it gives them a head start billion from 2010 to 2013 and biotechs struggling to of R&D on Amgen in the hotly tipped PCSK9 market. That raise money over the same period, both ends of the said, speed has always been important. In 2010, drug research food chain revamped their approaches. think tank The Manhattan Institute estimated moving Big Pharma tossed out the vertically integrated R&D Herceptin’s approval date forward by one year would sites they had dreamed up in the blockbuster era have added $730 million to Genentech’s earnings. and biotechs adopted capital-efficient, asset-centric models. With R&D costs continuing to rise and the diminishing ability to easily recoup outlays from payers, The responses made large and small companies companies can ill-afford to leave such sums on alike more reliant upon disaggregated networks of in- Ending Stagnation: How Collaboration Tools Are Enabling A New Era of R&D // May 2015 share: FierceMarkets Custom Publishing, Sponsored By: house and third-party teams. Big Pharma companies began outsourcing more R&D work to contract research organizations (CROs) in the West and Asia, while also becoming more reliant on biotech Ending Stagnation: and academia for innovative drug discovery. The How Collaboration upshot is that Big Pharma R&D chiefs have gone Tools Are Enabling A from managing campuses at which most of their New Era of R&D company’s work in a particular therapeutic area takes place, to overseeing global networks of internal and The disaggregation of drug third-party collaborators spanning from San Francisco research to Shanghai. Sponsored Content: Early-stage biotechs have evolved in parallel. Many Going Beyond Travel companies retooled during the financial crisis to Cost Savings to focus on getting their most promising asset to proof- Achieving Productivity of-concept as quickly and cheaply as possible, and their stripped down research models with larger Gains in so doing they de-prioritized the establishment of amounts of money and becoming the darlings of Wall Street in the process. in-house infrastructure. Investors had no desire to How Polycom is facilitating pay to build or buy research centers and Big Pharma remote research had no wish to acquire them as part of deals to add Such a rosy assessment masks ongoing logistical teething problems, though. Eli Lilly revealed some biotech-discovered assets to their pipelines. Once How video is enabling fast, again, the upshot was that more and more biotechs of the communications issues associated with efficient clinical trials moved toward the virtual model of research, in which outsourcing to China when it pulled a portion of its medicinal chemistry work back to the U.S. Albany, a small in-house team managed CROs. What next? The future N.Y.-based CRO AMRI picked up the slack by of R&D The swing from centralized to disaggregated research overseeing a team working out of an underused Lilly was intended to lower fixed costs and give firms laboratory in Indiana. Talking to investors in 2012, access to innovation, wherever it was happening. Big then AMRI CFO Mark Frost said: “One of the major Pharma as a collective has subsequently managed reasons Lilly...pulled [the work] back from China was to bring growth in its outlay on R&D under control— to improve project management and communication the top 10 companies now spend around $70 with their own scientists.” billion a year—and started to chalk up approvals for some potential blockbusters. Biotech firms, having While the problems faced by Lilly are common, its weathered the financing storm, are now combining response was more extreme than those of many of its Ending Stagnation: How Collaboration Tools Are Enabling A New Era of R&D // May 2015 Sponsored Content Going Beyond Travel Cost Savings to Achieving Productivity Gains Lonza, one of the world’s leading suppliers The RealPresence Platform delivers a highly and the travel desk now encourages employees to the pharmaceutical, healthcare and life personalized experience to every user, where to use video instead of travelling to meetings. science industries, uses a combination of staff can click a name on their Lync contact list Microsoft® Lync® Server 2010 and Polycom® and instantly connect and collaborate together, More Efficient and Personalised RealPresence® video solutions, implemented face-to-face via Polycom video on their desktop Collaboration by Polycom service provider partner Orange or in a conference room-based system to bring Polycom video solutions are being used by all Business Services, to provide an end-to-end people together in high definition. Lonza employees for a wide variety of meet- unified communications and collaboration ings – from management and board meetings, solution to over 11,000 staff across 90 sites Video Bridges the Distance among to facilitating inter-departmental meetings and around the world.

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