invivo.pharmaintelligence.informa.com JUNE 2018 Invol. 36 ❚ no. 06 Vivopharma intelligence ❚ informa PHARMA’S NEW R&D MODELS: Federating Innovation BY MELANIE SENIOR World In Motion: The Shape Of Bayer’s Brunn Reveals Exploring How Electronic Health The New Health Care Technology The European Big Pharma’s Records Will Improve Treatments Ecosystem In 2022 US Playbook And Outcomes PAGE LEFT BLANK INTENTIONALLY invivo.pharmaintelligence.informa.com STRATEGIC INSIGHTS FOR LIFE SCIENCES DECISION-MAKERS CONTENTS ❚ In Vivo Pharma intelligence | June 2018 8 COVER ❚ Pharma’s New R&D Models: Federating Innovation Melanie Senior Experiments are underway to solve pharma’s well- documented R&D productivity crisis. The industry is no longer focused only on buying new drugs via M&A, or on outsourcing discovery. Companies are also building new channels through which to access innovation, setting up new kinds of partnerships, and using new kinds of data. The shift involves re-thinking pharma’s place in health care. 14 18 30 World In Motion: How The EHR And New Data Paying For Gene Therapy: The Shape Of The New Health Streams Are Influencing Clinical Will Pharma Be First In Line? Care Technology Ecosystem Practice JENNIFER TEDALDI AND In 2022 MARK RATNER ADRIEL KOSCHITZKY ASHLEY YEO A plethora of clinical studies are showing With 15 new gene and cell-based therapies The health products industry, methods that new types of data, often captured in in late-stage testing, the time is now to of care delivery and even the public's the EHR, can help improve the correlation consider a critical strategic question: is expectations for improved tools to between treatments and outcomes and there a pricing model for these budget- prevent, monitor and treat disease have favorably affect patient care as well as busting treatments that works in both transformed dramatically in the past five enhance drug development. safeguarding returns to innovators and years. The changes anticipated over a providing access to patients at a price similar period ahead are potentially even society is willing to pay? An analysis by ZS more marked, with business continuity Associates looks at the options for impacts for medtech and pharma biopharma going forward. concerns, according to Deloitte LLP experts who were on the circuit at health 38 care industry events in Germany and the UK this spring. Meeting Growth Challenges Roundtable Panel Part 3: 24 PURSUING GROWTH Bayer’s US Playbook: The Smart WITHOUT OVERREACHING Way To Top-Line Growth SPONSORED BY: WILLIAM LOONEY FREYEUR & TROGUE, IMPACTIV The hotly contested US market is central BIOCONSULT, AND rbb COMMUNICATIONS to Bayer’s aspirations to become a global innovation player in pharmaceuticals, A panel of biotech executives and especially in key growth segments like venture investors discuss how to oncology. A little more than one year in, meet the challenges of building a Bayer Pharmaceuticals Americas sustainable business from day one. President Dr. Carsten Brunn reflects on his unit’s progress. ©2016 Informa Business Information, Inc., an Informa company June 2018 | In Vivo | 1 ❚ CONTENTS In Vivo Pharma intelligence | June 2018 DEPARTMENTS ❚ From The Editor AROUND THE INDUSTRY This month In Vivo puts the spotlight on new drug 4 The Value Of Being Decisive On development models being tried and tested by big Strategic Needs – Through One pharma. Melanie Senior explores novel mecha- Pharma CEO's Lens nisms for greater R&D productivity and access to ASHLEY YEO innovation that are being trialed by Johnson & Johnson, Roche, Bayer and Novartis. Comparing 6 Brits Lead Charge In Global the different approaches taken by top drug devel- Battle Against Antimicrobial opment players reveals winners and losers, and Resistant Superbugs also exposes where gaps still remain for pharma to MIKE WARD experiment with new discovery and development strategies. 42 ON THE MOVE Also in this month’s issue, In Vivo’s Ashley Yeo LUCIE ELLIS Recent executive appointments delves into a Deloitte report outlining predictions in the life sciences industry for the health care sector over the next five years, drawing out six theories that REGINA PALESKI can, or are starting to, have an impact on the medtech sector. Global health care expenditure is expected to reach $8.7 trillion by 2020, according to Deloitte fore- 46 DEAL-MAKING casts. Looking out over the coming years, the medtech global market is predicted Deals Shaping The Medical Industry, to reach a value of more than $525 billion in 2022. May 2018 THE STRATEGIC TRANSACTIONS TEAM For the health care sector to grow and reach the sky-high market value expected by Deloitte in a few short years, several emerging trends will need to gain more traction. Toward the top of the list: artificial intelligence, real-world evidence and innovative medical devices. Already the adoption of technology has in- EXCLUSIVE ONLINE CONTENT creased, one example highlighted is the recent deluge of health apps. In 2016, for example, more than 260,000 apps were made available by publishers. invivo.pharmaintelligence.informa.com Coming up for In Vivo as we enter the second half of 2018: a combined summer ❚ Diversification May Be At issue for July and August, a deep dive into drug delivery changes and challenges Play As Big Pharma Deals in September, and later in the year we focus on market access issues in the No- With Challenges vember edition. AMANDA MICKLUS As the newly appointed editor for In Vivo, I would love to receive feedback from our readers: what do you like/dislike, how do you use the publication and what ❚ Deals In Depth, April 2018 do you want to see more of? Get in touch at [email protected]. AMANDA MICKLUS ❚ Device/Diagnostics Deal-Making Statistics, Q1 2018 AMANDA MICKLUS AND In Vivo: Always Online First MAUREEN RIORDAN Relevant and exclusive online-only Don’t have an online user account? content at your fingertips 24/7. Quickly and easily create one by clicking on the “Create your Full access to our 35-year archive. account” link at the top of the page. Access your subscription by visiting: Contact: invivo.pharmaintelligence.informa. [email protected] com and log in. or call: (888) 670-8900 or +1 (908) 748-1221 for additional information. All stock images in this publication courtesy of www.shutterstock.com unless otherwise stated. /invivo @invivo /invivo 2 | | June 2018 invivo.pharmamedtechbi.com In Vivo invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com CONTENTS ❚ ❚ Up-Front SNAPSHOTS FROM JUNE'S CONTENT “We’ll continue to do development, commercial and manufacturing. But we’ll pivot to a new model for sourcing innovation, collaborating with those who are good Six predictions are explored for the at it. We federate,” said Bayer’s health care sector, looking out to Kemal Malik about the future of 2022. Deloitte experts discuss the big pharma R&D. industrialization of medtech and pharma innovation processes and Page 8 how new entrants such as Amazon are disrupting the market. Page 8 With 15 gene and cell therapies in late-stage development and the first wave of products already coming to market, questions are emerging about the future of specialty pharma’s pricing models. Page 30 Outlining an efficient Plan B: Steve Harris, CEO of London-listed Digging into the future use and untapped capability of electronic health records: Circassia, talks about moving data used to be an aspect of science and on after clinical failure. now, data science is its own fledgling domain and needs its own structure. Page 4 Page 18 ©2016 Informa Business Information, Inc., an Informa company June 2018 | In Vivo | 3 ❚ Around The Industry The Value Of Being Decisive On Strategic Needs – Through One Pharma CEO's Lens Steve Harris has probably told this story more times than is good for his health: about PARTNERSHIP OVERTURES the day in June 2016 when he had to go to the market and announce the kind of decision AstraZeneca and Circassia had no previ- that all CEOs dread. LSE-listed Circassia Pharmaceuticals PLC had been pressing ahead ous partnership arrangements, although nicely with the beginnings of a platform of allergy products, had good data and posi- Circassia had begun talking to the com- tive anecdotal feedback. But Phase III study results of the initial product, a cat allergy pany before its cat results came out, with immunotherapy, unexpectedly showed very marked placebo results. The study did not a view to looking for product candidates reach its primary endpoint, and investors had to be told. to bulk out its business. With Circassia on its radar, AstraZen- The other part of Circassia's business, expertise and the right structures to be in eca would have been tracking its progress developing the proprietary NIOX POC FeNo place, Harris explained. "Few companies and would have immediately been aware platform for asthma monitoring, was of our size have a respiratory platform, but of the restructuring decision it made progressing well, but the allergy failure our position is that we offer an outlet for on June 20, 2016, a decision that Harris meant the company immediately had to products with revenues in the £50 million now calls essentially both an easy and find a Plan B: one built less around its own to £300 million range." Circassia's task was horrendous one to make. All Circassia's pharma R&D and more around commercial to promote the products, and AstraZeneca processes had been built around allergy, candidates. It also meant that Circassia to complete the development work, includ- so the repercussions included making was suddenly no longer an allergy com- ing the ASCENT study to extend Tudorza's specialist teams redundant, stopping pro- pany. (Also see "Mite Trial Failure 'The label; and the Phase III Duaklir study ahead grams and halting expenditure generally.