When the going gets tough, the tough get going. “That title was fixed some weeks ago, but it turns out to be more relevant than I ever imagined,” said the keynote speaker David Brennan, CEO of AstraZeneca plc, addressing BioPartnering Europe delegates Monday.
“But it could be worse,” he added. “I could be CEO of a bank.”
As he stood up to give his address, the U.S. and UK governments and others around Europe were announcing yet more infusions of taxpayers money to try and save the banking system.
On the bright side, Brennan noted, unlike their counterparts in so many other sectors, pharma companies are cash rich, and there remains a significant appetite for partnership in the industry. “Strong companies don’t sit around passively waiting for the storm to pass. For AstraZeneca, strategic partnering is priority,” he said.
The immediate financial climate may make partnership more critical for cash-starved biotechs and venture capitalists in need of an exit. But it is not the financial situation that will make partnership work. “The marriage still has to be rooted in the fundamentals,” Brennan told delegates. “There are six reasons why partnering makes sense in our industry, and they don’t only apply in the current climate.”
First, “We are better together: The unit of productivity in science is one. The benefit comes in combining,” he said. AstraZeneca does not have a monopoly on good ideas. It can bring skills and compounds to a collaboration, and by combining those with the resources of a partner, it becomes possible to create better value for both parties.
Second, the risk-reward benefit is shifting. With regulators and payers asking for more and more, skills have to be combined to deliver, Brennan explained, adding that the current climate “is the most challenging period I have experienced in 30 years working in this industry.”
Regulators want each product to represent a significant advance on what went before. While moving from multiple doses per day to single dosing would once have represented such an advance, that is no longer the case. At the same time, safety has never been more paramount, he said.
Meanwhile, payers want to trim, or at least control, their drug budgets because with aging populations they have more people to treat. That adds to the challenge of making breakthroughs, Brennan noted. Currently, only 1 in 5,000 compounds makes it through to become a marketed drug. Partnerships can help to increase that low probability of success.
“Marginal improvements in technology are not fit for today’s purpose,” Brennan told delegates. Innovation is the only way to get over those higher and higher bars, and that means bringing in ideas form external partners.
Third, partnerships make it possible to access the skills that are needed to explore new and complex areas. “We have a robust pipeline, but lots of ideas are springing up beyond our laboratories,” he said. Biologics are one obvious example of that for pharma, but Brennan said that principle applies beyond compounds, to areas such as genomics and biomarkers.
Fourth – partnerships help AstraZeneca focus in its core areas. In the past two years, the company has chosen six disease areas it wants to target. “In these core areas, we want partners that complement us,” he said, citing the acquisition of two UK companies, Arrow Therapeutics Ltd. for its infectious diseases portfolio, and Kudos Pharmaceuticals Ltd. for its oncology products.
Meanwhile in metabolic diseases, the company has entered a risk-sharing deal with Bristol-Myers Squibb to co-promote each other’s diabetes drugs.
In another case – gastrointestinal diseases – the best way to improve the focus was to spin out a company, along with several programs and staff, begging the question of whether in-house R&D has a future. Brennan said that is a question he frequently gets from investors. “But it misreads the nature of innovation, where like chemistry, strong bonds are needed.”
Sometimes, a partnership or acquisition can fill a whole series of hooks, as was the case with MedImmune, which was combined with Cambridge Antibody Technology plc. Buying those two companies and bringing in their skills in antibodies and biologics “really complements our small molecule skills,” Brennan said. Similarly, the respiratory diseases portfolio has been transformed through partnering, expanding its range from small molecules to inhaled products and biologics.
Fifth – partnerships are getting smarter. Pharma and biotech have been doing partnerships for some time now, and the industry as a whole is getting better at it. “We have extended the range of partnerships and partnership models,” he explained. That includes the advent of outlicensing pacts that involve “fostering” agreements in which the partner takes full control of a drug in a particular phase.
An example for AstraZeneca is a deal with the research charity Cancer Research UK, which is carrying out development work on a tyrosine kinase inhibitor at no cost, while AstraZeneca retains full rights to take the compound forward. “In my mind, flexibility is key,” Brennan said. Again, MedImmune is a good example, which as a wholly owned subsidiary is strategically aligned with, but independent from, its parent.
Sixth – partnership is becoming more important further up the development and marketing chain. Brennan said partnering is extending into the payer and medical communities, and often that means being aligned, too, with the needs of governments.
For example, AstraZeneca is working with health staff to improve the treatment of respiratory diseases in China, with Primary Care Trusts in the UK to improve diabetes management, and in Bangalore, India to improve tuberculosis treatment.
Source: BioWorld Today
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