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PROGRAMA DE ESTRATÉGIA EM P&D
DE MEDICAMENTOS PARA
FARMANGUINHOS
ESTRATÉGIA NA PROTEÇÃO DE
RESULTADOS
Custos de desenvolvimento de uma droga
• Custos podem alcançar US$ 800 milhões
para uma droga
• O prazo de desenvolvimento aproximado é
de 15-16 anos
• 75% deste custo é atribuído às taxas de
falha
• 90% de todas as drogas desenvolvimento
não chegam ao mercado
Onde, como e quando investir
nossos recursos de forma satisfatória?
Alocação de Recursos
Alocação de tempo (em anos)
TIME
Degre
e o
f In
tere
st
Idea
Research
Proof
Of
Concept
Demonstration
Pre-production
Success
in market
Academic interest
Commercial
interest
After Chisholm
O Enigma
Quem tem interesse em preencher o gap?
TIME
Degre
e o
f In
tere
st
Academic interest Commercial
interest
O desafio: ausência de valor para preencher o gap!
TIME
Degre
e o
f In
tere
st
After Chisholm
138
318
802
1318
0
200
400
600
800
1000
1200
1400
$ m
illi
on
1975 1987 2001 2006
Year
Estimated full cost of bringing a new chemical or biological entity to market
($ million – year 2005 $)
Source: J.A. Di Masi and H.G. Grabowski, ‘The Cost of
Biopharmaceutical R&D: Is biotech Different? Managerial
and Decision Economics 28 (2007): 469-479
São 15 anos para desenvolver uma nova droga
De cada 5-10,000 moléculas sintetisadas & separadas por sua atividade, apenas 250 chegam ao pré-clinico, apenas 5 chegam a pesq. Clínica e apenas 1 alcança o mercado
Custo de P&D em 2006: $ 1.318 bilhões
Apenas 2 de 10 drogas disponíveis
comercialmente produzem retorno que correspondam aos custos de P&D
Fármacos são geralmente baratos e fáceis de copiar – empresas de genéricos acessam mercados maduros desenvolvidos pelo 1o. Entrante, sem custo de entrada
Desenvolvimento de drogas é caro e arriscado
Drug Discovery Pipeline
Target
Identification
and
Validation
Assay
Development
Lead
Generation
Hypothesis
Generation Candidate Development Commercialization
Phase
III
Submit Global
Launch
Global
Optimization
Lead
Optimization
First
Human
Dose
Phase
IA
Phase
IB/II
Compound patent filed at Lead Op
Subsequent patents filed over 10-15 years
Função das Patentes na Inovação
Competitiva
Product A
75 80 85 90 95 00
A
B C
D E F G J H I K L M
Q R
N O
P
Basic patent/product lifecycle
Patent filings leading to granted patents
Classe de compostos, sais, formas cristalinas, usos (1o uso e
subsequentes), formulações, processo de obtenção, métodos de
purificação, rotas de administração, perfis de liberação e
combinações
Tipos de Patentes que refletem
o processo de P&D
O escritório Europeu conduz um dos exames mais rigorosos
Estatísticas de 2005:
128,754 depósitos
163,144 buscas empreendidas
104,433 exames
Apenas 53% das patentes foram concedidas
O prazo médio de aprovação é de 44.3 meses
Um portfólio de patentes de um produto pode ter entre 20 e 40 patentes
Obter uma Patente não é um processo trivial
No USPTO
Estatísticas de 2005:
417,508 depósitos
207,867 depósitos (nacionais)
143,806 depósitos estrangeiros
Apenas 48% das patentes foram concedidas
O prazo médio de aprovação é de 35 meses
Obter uma Patente não é um processo trivial
Obter uma Patente não é um processo trivial
INPI
Obter uma Patente não é um processo trivial
Tempo médio 8,1 anos com tendência de redução para 6 anos
Competition in Therapeutic
Innovation
• The first mover is rarely the most successful
• The period of exclusivity for first movers is
shrinking
The period of exclusivity for first entrants to
a therapeutic class is decreasing (US data)
Source: DiMasi & Paquette (2004)
1.2
3
4.1
7.2
10.2
7.7
1.8
2.8
5.1
5.9
8.2
7.2
1995-98 (n=18)
1990-94 (n=15)
1985-89 (n=14)
1980-84 (n=5)
1970s* (n=9)
1960s (n=8)
First-
in-C
lass A
ppro
val Period
Years
Mean
Median
Without patents there would be no innovation
• Given the costs & risks of drug development, without a period of exclusivity against copyists there would be no investment in pharmaceutical innovation
• Pharma do not seek therapeutic area exclusivity (anti-virals, antibiotics)
Patent protection promotes therapeutic & innovative competition
Compound differentiation
• New drugs tested against “gold standards”
• Patent competition drives improvements: Increased Efficacy
Decreased Side-effects
Decreases ADRs
Decreased drug-drug interactions
Decreased dosing
Specialised drug delivery systems
• Patients benefit from a range of products with differing characteristics
Quarterly Enalapril Sales in the UK
0
5,000
10,000
15,000
20,000
25,000
QTR
SEP 1
992
QTR
MAR 1
993
QTR
SEP 1
993
QTR
MAR 1
994
QTR
SEP 1
994
QTR
MAR 1
995
QTR
SEP 1
995
QTR
MAR 1
996
QTR
SEP 1
996
QTR
MAR 1
997
QTR
SEP 1
997
QTR
MAR 1
998
QTR
SEP 1
998
QTR
MAR 1
999
QTR
SEP 1
999
QTR
MAR 2
000
QTR
SEP 2
000
QTR
MAR 2
001
QTR
SEP 2
001
QTR
MAR 2
002
Sale
s (
£ m
illi
on
)
Protection
Expiry
Source: IMS Health MIDAS database
Changing face of Innovation
• The Past….Large Corporate R&D facilities
Secretive smart scientists, low level of collaboration
Closed Innovation
• The Present…..leaner business units Increased levels of collaboration
More outsourcing, more partnerships
Open Innovation
“Closed” Innovation “Open” Innovation
“No matter who you are, most of the smartest people work for someone else”
Bill Joy, Sun Microsystems
Changing Landscape of I.P • More small companies owning & licensing basic
IP
• Many companies not in manufacturing, only generating technology/IP
• More patent aggregators, who take on patents from universities & small companies
• Patents used as bargaining chips
Patent strategy and biotechnology
• Biotech industry (and sometimes universities) use broad and basic and research-tool patents in marketing to Pharma and seek “reach-through royalties,” to obtain a share of the ultimate rent.
Observations on the Academic IP
Technology Strategy
• Must concentrate on seeking competitive advantage, not on scientific interest
• Must be consistent with overall strategy – e.g. R&D programs shouldn't focus on product performance if the firm is
pursuing a cost leadership strategy
• Shouldn't focus exclusively on product design or manufacturing technology if this means ignoring other areas of the firm (info systems, materials handling, office automation)
• Must recognize risk/return tradeoffs
• Must be consistent with industry/product lifecycle
Sustainability of the technological lead
• Depends on: – Faster, more successful innovation than competitors
• managing internal vs external sources
• scale and scope economies in R&D
• superior technological skills
– Slowing the rate of diffusion to competitors
• preventing reverse engineering
• restricting technology transfer
• obtain/enforce IP
• loyalty of employees, non-disclosure agreements etc
• vertical integration
– Lock-in of customers
• building in buyer switching costs
• control of standards
Mechanisms undermining first-mover advantage
• Free-riding by late-comers
• First-mover locked in to the wrong strategy
• Competition
Free-riding
Latecomers can use the first-mover’s investments in:
• R&D
• moving down the learning curve
• employee training
• infrastructure development
• obtaining regulatory approval
• finding, educating customers & suppliers
Lock-in to the wrong strategy
• ex ante choices may prove to be wrong ex post
• First mover can be locked in to the wrong technology or marketing strategy because of – incumbent inertia
• sunk costs: plant and equipment, marketing and distribution channels, advertising and reputation
• reluctance to cannibalize existing product lines
– organizational inflexibility
• organizational routines
• corporate culture doesn't prize innovation
• doctrinal views about the world
• internal political dynamics
– established relations/contracts with other organizations
R&D Budgeting
• Technology strategy usually implemented by R&D budgeting decisions
– How much to spend?
– Where to spend it?
Where do R&D budgets go?
Breakdown for US manufacturing
• long run v. short run 25:75
• fundamental v. incremental 8:92
• product v. process 65:35
• basic v. applied v. development 5:25:70
– “basic” means advancement of knowledge without specific commercial objectives
– “applied” means research with specified commercial objectives
– “development” means embodiment of research results into products/processes
R&D Budgeting: General Considerations • R&D is an investment, not an expense
– evaluate R&D projects like any other investment project?
• R&D budgeting decisions entail making trade-offs against competing uses of funds – should R&D always over-ride other claimants?
• Continuing commitment to high levels of R&D spending often distinguishes leaders from followers – can a firm become a technology leader just by increasing R&D/Sales ratio?
• Adoption of a formal budgeting process often marks start-up companies’ transition to “adolescence”
• Can the firm find a project selection process which promotes innovative success?
Industry Practice in R&D Project Selection
• Diversity: no standard practice – most firms use home grown techniques
• Ambivalence towards quantification – many R&D managers are predisposed by background to seek objective
quantitative criteria for decision-making, but the weakness of available techniques and complexity of problems make them reluctant to give these a dominant role
• Some lessons: pay close attention to the process -- who should be involved? what weight should be placed on various inputs? how should conflicts be resolved?
Some Analytical Techniques for R&D Project Selection
• index models: compare probability-weighted benefit/cost ratios
• discounted cash flow models: recognize impact of distribution of costs and benefits over time, incorporate appropriate risk premium
• portfolio models: risk and return tradeoffs. CAPM ???
• scoring/profile models: compare projects against checklist of desired characteristics
• real options: “financial engineering at Merck”, recognize option value of continued funding, use Monte Carlo simulations to bound likely returns
Example: pharmaceutical R&D portfolios
• Typical firm runs 8-10 major research programs
• Discovery phase: $2m-$25m / year
• Development phase: $50m+ / year
• Manager’s problem:
– How much to spend on each program?
– How to select new projects?
– How to know when to stop projects?
Why is this tough?
• Very risky:
– 10,000 candidate molecules
– 10 go into development phase
– 1 makes it to the market place
• Hard to measure performance
• Spillovers: project successes are correlated
• Economies of scope and scale
Implications for real life R&D strategy
• In head-to-head competition:
– Try not to enter a race you aren't sure of winning: if you have to work too hard to win, it wasn't worthwhile
– Have eyes in the back of your head: be well-informed of your competitor's position, and let them know it
Effective strategies answer three key questions:
How will we Create value?
How will we Capture value?
How will we Deliver value?
• How will we create value?
– How will the technology evolve?
– How will the market change?
• How will we capture value?
– How should we design the business model?
– Where should we compete in the value chain?
– How should we compete if standards are important?
• How will we deliver value?
– How do we manage the core business and growth simultaneously?
– How do we use our strategy to drive real resource allocation?
Outline: • Why do I need an innovation strategy?
• How will we create value?
• How will we capture value?
• How will we deliver value?
• Doing strategy in practice
Why have a strategy?
The Timing and Impact of Management Attention
Phases
Influence
High
Low
ACTUAL
ACTIVITY MANAGEMENT
PROFILE
Acquisition Investigation Basic
Building Production Manufacturing
ABILITY TO INFLUENCE OUTCOME
Why is it so hard to kill project #26?
• It’s a “good” project!
• Good managers can meet stretch goals
(and I’m a good manager)
• Making difficult decisions takes time & energy
It’s very hard to kill projects without a strategy
Reasons to have a strategy:
2. To be able to change it
Simple
molecules
<1nm
IBM PowerPC 750TM
Microprocessor
7.56mm×8.799mm
6.35×106 transistors
semiconductor
nanocrystal (CdSe)
5nm
10-10 10-5 10-9 10-7 10-6 10-8 10-4 10-3 10-2
m
Circuit design
Copper wiring
width 0.2m
red blood cell
~5 m (SEM) DNA
proteins
nm
bacteria
1 m
Nanometer memory element
(Lieber)
1012 bits/cm2 (1Tbit/cm2)
SOI transistor
width 0.12m
diatom
30 m
Inventors Authors
Universities
Governments
Companies
Traditional IP Stakeholders
New Stakeholders are focusing on IP
Regulators Companies Start-ups
Universities Technology
Transfer Companies
VCs Investors
Governments Banks Financial
New IP Stakeholders + New interests =
More confusion and disputes
Multiple Inventors Authors
Indigenous Populations
E.g., Pharma Industry Requires Strong IP Protection
Source: Boston Consulting Group: “A Revolution in R&D” 2001
• 70% of R&D Costs Are Incurred before Clinical Trials • Cannot raise money without IP and cannot afford to get IP wrong!
Stage of Development
$165 $205 $40 $120 $90 $260
$165
$410
$530
$620
$880
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
Target ID
1 yr
Target Validation
2 yrs
Screening
1.1 yrs
Optimization
2 yrs
Pre-clinical
1.6 yrs
Clinical
7 yrs
Do
lla
rs in
Mil
lio
ns
Stage Cost
Cumulative Cost $370
Biology
3 years
Chemistry
3.1 years
Development
8.6 years
= TOTAL
14.7 years
The Increased Visibility Of IP: What Is At Stake?
The value of IP is growing but cannot be accurately forecast in an increasingly global and technological world. Our valuation
methodologies and laws are inefficient. This will lead to more IP disputes
“It is estimated that by 2007, as much as 90% of the value of the
world’s top 2000 enterprises will consist of intellectual property” Building and Enforcing Intellectual Property Value,
An International Guide for the Boardroom 2003
PriceWaterhouseCoopers
“How appropriate is our system – developed for a world in which
physical assets predominated – for an economy in which value
increasingly is embodied in ideas rather than tangible capital?”
Alan Greenspan April 4, 2003
What is the nature of an IP asset?
• Bundles of national and territorial rights
• Rights to exclude others (NB, not to practise)
• Rights considered as property (financial assets), which can be pledged and securitized
THE CHALLENGE = How to convert national, legal « rights to exclude » into global, commercial
revenue-generating assets?
Invention Protection of invention
Transfer of technology
Entrepreneur Start-up creation
Seed funding
Business plan
Proof of concept
Development of technology / product
First round financing
Management/Structure of company
Strategic partnerships
More rounds of financing
Company grows
Traditional Thinking: IP is done at the beginning
Product development
Sales & markets
Regulatory strategy & clinics
EXIT TO SUCCESS!
EXIT TO SUCCESS!
Invention Protection of invention
Transfer of technology
Entrepreneur Start-up creation
Seed funding
Business plan
Proof of concept
Development of technology / product
First round financing
Management/Structure of company
Strategic partnerships
More rounds of financing
Company grows
But, IP is important throughout
IP + Money = O2: Lifeline of the company
Product development
Sales & markets
Possible Revenue-Generating Strategies Using IP
• Sell Products: Usually a “one-way” street, with all IP rights exhausted (internationally or domestically) (e.g., INTEL)
• License/Rent Product: Better to retain rights & maintain some control (e.g., transgenic mice, software: restrict access to source code & use)
• Sale of IP: a) Assignment of IP assets: May be simplest (e.g., 3M Post-It)
b) License of IP Assets: How?
• M&A: Sell company including the IP in it (e.g., a holding entity)
• Joint Ventures: Alliances that pool their IP resources into a new company (e.g., Nanonics)
• Franchise: Package concept (e.g., McDonalds): what is the IP bundle (TM + © + Know-How + patents)? Quality Control and brand management issues?
• Create Market: Offer for free and then charge using installed base (e.g., Skype)
• Open Source/Freeware/Shareware & then charge for improvements (e.g., .php)
• Covenant not to sue? (e.g., Two start-ups to avoid depleting resources)
• IP Holding companies? Who should hold IP? Tax and financing issues: inter-company pricing and royalty considerations.
San Francisco (CN), February 24, 2012
Verinata Health and Stanford University sued Sequenom, in a dispute to determine who owns the rights to a noninvasive prenatal test that uses DNA sequencing to search for abnormal fetal chromosomes.
The context: a case study
Patent Fight Over Fetal DNA Sampling
• Verinata has just completed clinical trials of the test for aneuploidy, a genetic defect.
– The most common birth defect associated with aneuploidy is Down syndrome.
– Verinata claims the new test is more accurate than the maternal serum screening tests now available and less dangerous to the fetus than amniocentesis.
– Verinata licensed-in this technology from Stanford University.
– The company has spent "tens of millions of dollars in the research, evaluation, and development”.
Patent Fight Over Fetal DNA Sampling
• Sequenom has a patent (licensed-in) for "Non-Invasive Prenatal Diagnosis," which was issued in 2001 (the so-called '540 patent).
– in 2010 Sequenom's lawyers sent a letter alleging that "'the practice of non-invasive prenatal diagnostics, including diagnosis of the Down Syndrome and other genetic disorders, using cell- free nucleic acids in a sample of maternal blood infringes' the '540 patent.“
– Verinata's predecessor, Artemis Health, responded by stating that Sequenom's infringement claims were "unsupported by the patent".
Patent Fight Over Fetal DNA Sampling
• Verinata says that:
– since then, "Sequenom has repeatedly stated to the public that anyone who performs a non-invasive prenatal test using cell-free DNA circulating in the blood of a pregnant woman would infringe the '540 patent.
– these statements, which misrepresent the scope of the '540 patent, are intended to broadly convey that:
– no one other than Sequenom has the freedom to perform non-invasive prenatal testing under the '540 patent
– with the goal of deterring potential competitors from entering the market and deterring doctors and healthcare providers from using anyone other than Sequenom for those services."
Patent Fight Over Fetal DNA Sampling
NOW…
• Verinata seeks declaratory judgment that its test does not infringe on Sequenom's patent.
• And it claims that Sequenom itself infringes on Verinata's patents for determining chromosomal abnormalities (two patents), by manufacturing and marketing its test.
– Sequenom's infringement of both patents has been "deliberate and willful, warranting increased damages and attorney's fees," Verinata says.
– Verinata and Stanford University seek declaratory judgment that both patents have been infringed, a permanent enjoinder from further infringements, damages and treble damages.
Patent Fight Over Fetal DNA Sampling
Patent Fight Over Fetal DNA Sampling
The Message
• The key point is not the patents as a way to block competitors
– Few SMEs can afford litigation to enforce anyway
– Few SMEs care about controlling a monopoly!
• The patents protection (strength) of the actual business (product) is essential
• Freedom to operate is the key (this is the real value of your patents)
Translational Application of Novel Withanolides for the Treatment of
Advanced and Drug-Resistant Cancers
Mark S. Cohen, MD, FACS
Associate Professor of Surgery and Pharmacology
University of Kansas Medical Center
Barbara N. Timmermann, PhD
University Distinguished Professor and Chair
Dept. of Medicinal Chemistry, The University of Kansas
Portfolio of Novel Compounds
• We have identified many of the important anticancer activities of the withanolide, Withaferin A.
• Our strong medicinal chemistry team has recently identified 40 natural and semi-synthetic withanolide analogs from the local Physalis plant
– Unique properties through structure-activity relationships (SAR)
– Each has a unique anticancer activity profile
– Abundant selection of novel drug candidates for translation and proof-of-concept.
• Successful SAR has improved solubility and potency of drug analogs for ongoing in vivo studies.
Benefits of Novel Withanolides Novel Withanolides
from Physalis
Potent, highly selective anticancer activity, orally bioavailable
Induces apoptosis, cell cycle shift to G2M (potential radiosensitizer) and down-
regulates several key signaling pathways(RET, BRAF, mTOR, notch, BRCA, HSF-1) in melanoma, breast CA, thyroid CA, Head and Neck CA, and leukemias
Low Toxicity Profile,
clean hERG and AMES
Standard Chemotherapy
Potent, majority given i.v. which are often non-selective, resistance is
common (imatinib, cisplatin)
Targeted agents as monotherapies have problems with resistance through
alternative survival pathways
Systemic toxicities common (often dose- and treatment-limiting)
Novel withanolides effectively treat resistant cells and can synergize with imatinib
or cisplatin to decrease dose/toxicity
Natural withanolide X001 inhibits notch signaling
in breast cancers (even triple-negative tumors)
Novel withanolides induce apoptosis, shift the cell cycle to G2M,
and inhibit key signaling pathways in multiple cancer cell-lines
Withanolides are highly effective vs. MTC in vivo
________
Withanolides Effectively Treat
Melanomas in vivo with
Reversal of Metastatic Disease
Balb-C mice injected with aggressive B16F10 murine melanoma cells develop metastatic disease in controls (top
right figure) but treatment with low dose WA(2.5 mg/kg/d) results in partial response (top left) with prevention of
metastases or complete response with high dose treatment (5mg/kg/d) with reversal and cure of
metastatic disease (right bottom figure). Graph shows complete tumor response in 60% of low dose and 80% of
high dose treated mice sustained even 5 weeks after treatment ceased.
2.5mg/kg/d Control
Pre-treatment
After 5mg/kg/d x 3 wks
Market Analysis
• Melanoma, head & neck CA, ALL, glioblastoma, MTC, breast, pancreatic CA
• 350k patients/year in US, 2.5M worldwide
Potential Cancers for Withanolide
Treatment
• Orphan indication
• US market of 20K pts/year
• Currently PEGylated IFN is $20K per course, Yervoy is $120K per patient and Zelboraf is $112k/year
Current Novel Melanoma Therapies
•$50k per complete course of therapy due to superior safety & efficacy
• Withaolides are safer than other cytotoxics and targeted agents
• Can synergize with either cytotoxics, BRAFi or other TKIs for combo therapy
• Phase 1 human trial anticipated for 2014
Melanoma Treatment with Withanolides
2018 2019 2020 2021 2022
Market share 5% 15% 30% 40% 50%
# of courses
of therapy
1,000 3,000 6,000 8,000 10,000
Revenue @
$50k per
$50M $150M $300M $400M $500M
Business Development Strategy • IP
– University has both composition of matter and method-of- use patents filed for novel withanolides from Withania and Physalis (licensing arrangement for partner/start up)
• Capitalization – $150K grant from Inst. for Advancing Medical Innovation
– Seeking additional $5M to get orphan status, IND, and complete phase 1 data in melanoma
• Development Model – Start-up to move lead withanolide (already identified for
potency in melanoma/ pathway specificity and solubility by SAR) through Phase I and then partner with larger pharma company to reach market
– Early partnership/licensing opportunity with pharma company to move lead candidate(s) into market.
Withanolide Development Milestones
Reasons to Invest in Novel Withanolides
• Strong Scientific Validation
– In vitro / in vivo anticancer mechanism, potent efficacy, low tox
– Orally bioavailable analogs with enhanced solubility and potency for cancers (melanoma, thyroid, ALL)
• Solid IP portfolio
– 40 novel anticancer compounds with composition of matter and method-of-use patents filed (licensing arrangement for partner/start up)
• Accelerated Market Entry Timeline
– Orphan drug pathway in advanced melanomas, GLP scalability to start human Phase I in 2014, potential market entry by 2018
• Early Partnership/Licensing Opportunity – Start-up can complete Phase I with $5M invested then
partner/license with pharma to reach market
Summary
• Strong I.P essential & is the foundation of any technology driven organisation
• Portfolios of multiple patents held by different parties do not impede innovation
• There would be no competitive therapeutic innovation
without patents
• To be successful in taking new medicines into the clinic we need to dramatically increase our partnering activity to drive innovation through new business models
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