Schuhmacher et al. J Transl Med (2018) 16:119 https://doi.org/10.1186/s12967-018-1499-2 Journal of Translational Medicine REVIEW Open Access Open innovation and external sources of innovation. An opportunity to fuel the R&D pipeline and enhance decision making? Alexander Schuhmacher1* , Oliver Gassmann2, Nigel McCracken3 and Markus Hinder4 Abstract Historically, research and development (R&D) in the pharmaceutical sector has predominantly been an in-house activity. To enable investments for game changing late-stage assets and to enable better and less costly go/no-go decisions, most companies have employed a fail early paradigm through the implementation of clinical proof-of-con- cept organizations. To fuel their pipelines, some pioneers started to complement their internal R&D eforts through collaborations as early as the 1990s. In recent years, multiple extrinsic and intrinsic factors induced an opening for external sources of innovation and resulted in new models for open innovation, such as open sourcing, crowdsourc- ing, public–private partnerships, innovations centres, and the virtualization of R&D. Three factors seem to determine the breadth and depth regarding how companies approach external innovation: (1) the company’s legacy, (2) the company’s willingness and ability to take risks and (3) the company’s need to control IP and competitors. In addition, these factors often constitute the major hurdles to efectively leveraging external opportunities and assets. Conscious and diferential choices of the R&D and business models for diferent companies and diferent divisions in the same company seem to best allow a company to fully exploit the potential of both internal and external innovations. Keywords: Open innovation, Pharmaceutical industry, Public–private partnerships, Crowdsourcing, Knowledge leverager Background most) decisions that take into account the probability of Traditionally, pharma R&D organizations are fully inte- technical success (PoS), the likelihood of achieving the grated; they are composed of various units with diferent target product profle (TPP) and the resources needed competencies, skills and technologies and have complex to achieve the TPP. Te translation of innovations from interfaces to accomplish the multi-disciplinary tasks research into clinically meaningful therapies for patients required for developing new drugs. Regulatory hurdles, has become the key value generating step in pharmaceu- complex research for new drug targets, or the low pre- tical R&D. Nonetheless, in view of the high complexity dictability of animal models are some examples of why of clinical PoC, the attrition rate in the PoC phase is still the industry is struggling with its R&D input/output- the highest. Tis raises the question regarding whether ratio [1, 2]. Tese internal and external challenges made a decentralized and more open R&D organization that it necessary for companies to improve their R&D efcien- accesses additional competencies, skills and technologies cies, e.g. by outsourcing to reduce overhead costs, by the from external sources could be a measure to increase the installation of proof-of-concept (PoC) organizations or R&D efciency. by enhanced scientifc rigor in data-driven project deci- Generally, a centralized R&D approach is particularly sion-making. Te latter is included today in many (if not favoured and relevant in disease areas that necessitate large and long clinical trials to demonstrate PoC and where deep developmental, regulatory and commer- *Correspondence: alexander.schuhmacher@reutlingen‑university.de 1 Reutlingen University, Alteburgstrasse 150, 72762 Reutlingen, Germany cial expertise is essential. Whenever an R&D activity is Full list of author information is available at the end of the article more singular and autonomous or as soon as less synergy © The Author(s) 2018. This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creat​iveco​mmons​.org/licen​ses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made. The Creative Commons Public Domain Dedication waiver (http://creat​iveco​mmons​.org/ publi​cdoma​in/zero/1.0/) applies to the data made available in this article, unless otherwise stated. Schuhmacher et al. J Transl Med (2018) 16:119 Page 2 of 14 within a portfolio of R&D projects exist, a decentralized open source activity in the biomedical environment [17]. R&D may have advantages over a central R&D organiza- In addition, open-access scientifc journals follow the tion since the company has the opportunity to copy the principle of the free distribution of scientifc informa- science-based biotech business model. Hence, pharma tion and knowledge. Other examples that are known are companies have increasingly moved away from internal from non-proft organizations and governments to dis- R&D models towards more open and collaborative R&D cover drugs for neglected diseases in collaboration with models following the paradigm of open innovation [3]. pharma companies [18]: In this vein, they have established specifc collaborations with academic centres of excellence, built innovation • In 1974, the Special Program for Research and Train- centres, made joint ventures with academic institutions ing in Tropical Diseases (TDR, http://www.who.int/ (public–private partnerships, PPP), established precom- tdr/en/) was initiated by the World Health Organi- petitive consortia, or experimented with crowdsourcing zation (WHO) as a global programme of scientifc and virtual R&D [4–7]. Some models even let com- collaboration to combat neglected diseases [18]. Te petitors collaborate and become partners [8]. Currently, programme is hosted at the WHO and funded by many companies have put greater focus on leveraging co-sponsors, governments, foundations and agen- external knowledge, licensing or acquiring drug candi- cies, such as the World Bank, the European Com- dates and changing their R&D models from primarily mission, or the Bill and Melinda Gates Foundation inside-driven concepts to plans that more closely follow [19]. Te African Network for Drugs and Diagnostics the open innovation paradigm [4]. As a consequence, Innovation (ANDI) is a programme of the TDR that the proportion of externally sourced R&D assets has started in 2008 under the governance of the United increased in the past years [9]. Tis rise in externally Nations Economic Commission for Africa (UNECA). sourced innovation coincided with several cases of major It focuses on the specifc health needs in Africa and downsizing in R&D departments, with Merck, AstraZen- aims at promoting and supporting pharmaceutical eca and Pfzer being the biggest proponents of the R&D R&D for neglected diseases led by African institu- cuts [10–14]. tions to develop capacities and centres of research Tis paper summarizes the current situation of open excellence there [20]. innovation in the pharmaceutical sector. It describes the • Te Medicines for Malaria Venture (MMV, https concepts and models of opening up pharma R&D, and ://www.mmv.org) was established in 1999 by a few it attempts to address the questions regarding why big European governments together with the World pharma has not yet fully embraced the diferent ideas Bank to reduce the disease burden of Malaria infec- of open innovation and what measures would help to tions [21]. Since then, the programme has gained increase R&D productivity and efciency. more facilitators and received total funding of roughly USD 1 billion by 2016. Te main sponsor is Open source and crowdsourcing to access the Bill and Melinda Gates Foundation, with a 54.7% knowledge of the masses share. Partners form the industry include Novartis, Open source innovation has been successfully applied in Sanof, Merck Serono and Takeda. Te achievements the software industry. Tis radical open model of soft- are enormous. Several hundred million treatments ware development allows anyone to participate, network were provided to children; 18,000 healthcare workers in the product’s development and then share the results. were trained to administer malaria medication; and Rewards for participants are mostly non-monetary but 19 drug candidates have been nominated for clini- are related to recognition and participation, such as the cal development since 1999. Since 2010, the MMV presentation of expertise, the satisfaction by working moved 17 candidates into preclinical development, of on an honourable project, the acquisition of new skills, which 13 are still active [74]. or peer recognition. Around the time when internet • Te Global Alliance for Tuberculosis Drug Develop- became a commodity, the players in the pharmaceuti- ment (TB Alliance, https ://www.tball iance .org) is cal sector became more connected, and in turn, it was an initiative of governmental and non-governmen- possible for R&D organizations to become more decen- tal organizations. It was started in 2000 to discover tralized. Tis development allowed pharmaceutical com- and develop tuberculosis drugs. Today, the TB Alli- panies to more easily access knowledge and ideas from ance manages the largest pipeline of new TB drugs, the outside, promote innovation, use the mass of external including six new products that are in clinical devel- experts to solve problems and to develop technologies opment phases. Several pharmaceutical companies,