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Efficient R&D process can position a drug candidate for commercial success
March 2010
by Kevin Hrusovsky  | 

  Pharmaceutical manufacturers are under increased pressure to differentiate new drugs from those already on the market. With increased scrutiny from the U.S. Food and Drug Administration (FDA) and new hurdles for safety in comparative effectiveness, it is more important than ever for pharmaceutical companies to increase R&D efforts while controlling costs. Speeding up R&D is an efficient way to increase the probability of achieving clinical and commercial success for a drug candidate. However, the way to achieve this is not often straightforward. Fortunately, several new technologies exist that are revolutionizing the drug development process by accelerating small-molecule research.  
There are several steps pharmaceutical companies can take to make the most effective use of time and money spent on drug discovery and development. First, investigate high-throughput, in vitro profiling technologies to improve innovation cycles through rapid, cost-effective reiterative selection and optimization. Second, enhance the clinical relevance of early stage R&D by making in vitro and in vivo data more predictive of clinical outcomes. Third, evaluate each step of the innovation cycle to ensure precise and immediate control over critical path activities. Finally, leverage early cumulative data to get an accurate and detailed knowledge of the drug candidate's attributes at an early stage and help predict its potential market value.
High-throughput, in vivo profiling
Despite the ability of drug developers to rapidly screen million of compounds, such speed is irrelevant unless the data provides an accurate assessment of key attributes, such as kinetics, mechanism of action and specific effects on key target enzymes. Through strategic use of high-throughput, in vitro profiling technologies, researchers can rapidly generate a drug profile, allowing numerous reiterations until one or more "optimal profile" candidates has been selected that has a greater chance of surviving the in vivo testing stage and beyond. New technologies such as microfluidic-based instruments provide immediate high-quality data with good sensitivity, thereby allowing detection of low-activity inhibitors, which are potentially more pharmacologically relevant, while at the same time eliminating false positives.  
Every new technology that is introduced into the innovation cycle should ideally be able to keep pace with the preliminary screening process, yield reproducible data across a broad spectrum of compounds, be cost-effective in terms of materials and labor and be able to generate multiple data points per compound. These attributes allow drug developers to exploit a phenomenon that has been used by the IT industry for more than a decade—distributed experimentation—whereby the availability of inexpensive modular technologies has allowed innovation through decentralization of activities that were once restricted by necessity to a single system.  
By judiciously using new enabling life science tools in a reiterative manner, researchers can quickly eliminate candidates likely to score poorly in terms of safety and efficacy, and select for additional criteria such as slower off rates, which are more likely to correlate with greater therapeutic windows in vivo. By implementing distributed experimentation, drug developers can further enhance the efficiency of the process, facilitating swift decision-making during the development process.   
Enhancing clinical relevance at an early stage
Given that one of the greatest drains on pharmaceutical ROI is the exorbitant cost of clinical failure, it is imperative to ensure that in vitro and preclinical in vivo data is predictive of clinical outcome. An abundance of recent technological developments, including next-generation sequencing, genomic/proteomic biomarker discovery, companion diagnostics and in vivo imaging, have helped strengthen the transition from in vitro to in vivo, thereby facilitating more clinically relevant drug development.   New modalities in in vivo optical imaging, in particular, allow researchers to visualize the biological effect of a compound within a live animal, in real-time over days or weeks, without the need to sacrifice the animal to obtain data. Not only does this reduce cost in terms of animal usage and labor (such as histology workload), but it also provides real-time data that is more predictive of the compound's activity in humans. With engineered mouse and rat models for all the major disease indications, in vivo imaging is of broad utility to the pharmaceutical industry, and has been strategically used by many large companies to generate data for FDA regulatory approval of small molecule drugs.  
Evaluating critical path activities  
While the pharmaceutical industry appreciates the importance of accelerated drug development, in its eagerness to save on cost through outsourcing, it has often overlooked a basic tenet of business strategy: the higher the strategic value of an activity, the more closely it should be held. Given how essential speed, data generation, analysis, reiteration and swift decision-making are throughout the innovation cycle, it is advisable to keep these activities in-house to ensure proper control over the process.   
Several years ago, a trend emerged in drug discovery and development, whereby many pharmaceutical companies began to outsource key R&D activities to third parties. The high cost of capital equipment and labor, combined with the high levels of radiation that required costly containment, could justify outsourcing, even though it means losing control of some core competencies. A recent study of 359 U.S.-based companies measured their outsourcing practices and innovative performance and found that: 1) the conventional wisdom that outsourcing saves on cost appeared not to apply in all situations and, in fact, in some cases the cost of outsourcing dramatically exceeded the cost of internal product development; and 2) an inappropriate level of outsourcing (too much or too little) decreased innovation, as evidenced by the fact that 1 percent too much outsourcing resulted in an 11 percent decrease in the expected number and influence of resultant patents.1 Given that managing costs while maximizing innovation is critical to the success of all pharmaceutical companies, these findings underscore the importance of applying careful discretion when choose which activities to outsource. 
Importantly, there have been many key technological advances in the life science tools industry in recent years, many of which have been sufficiently game-changing to warrant bringing key activities back-in-house. High-throughput profiling is a case in point given its low cost point in terms of capital and labor, speed and critical position in the innovation cycle in terms of being able to generate high-quality data within hours versus days or weeks. With new technologies like these that are enabling swift "Go/No Go" decision-making, the impetus for outsourcing has almost entirely dissipated. In fact, the enhanced speed, efficiency, cost benefit and control at key decision points that it affords the drug developer strongly argue that such enabling technologies should be kept in-house and fully leveraged in the early stage drug discovery process. Simply put, maintaining control of the innovation cycle is too important to warrant surrendering control to third parties, particularly when there are cost-effective solutions at hand.   
Positioning a drug candidate for commercial success
While most early drug discovery and development is primarily focused on generating leads that are likely to be clinically effective and safe in humans and hopefully gain regulatory approval, success in meeting these two parameters is not sufficient to ensure a positive ROI. To increase the chance of commercial success in terms of market share, reimbursement and pricing, a good drug candidate must be sufficiently differentiated from existing and upcoming marketed drugs with which it will compete.  
Pharmaceutical companies can introduce an early "commercial success hurdle" into the R&D process by using the innovation cycle reiteratively to seek a compound that has an aspirational profile based on what the attributes of the ideal product should look like. While the ideal profile may or may not be attainable, the drug developer can compare the ideal profile with a baseline profile (i.e., the minimal attributes for a commercial product), and make the decision to continue reiterative screening or to proceed with the product in hand. With an accurate and detailed knowledge of the drug candidate's attributes at an early stage, a drugmaker can quickly predict its market value, and proceed along the path that will maximize the chance of creating a drug that is both clinically safe and effective and well differentiated from the competition.  
While there is no single solution to the pressures weighing on the pharmaceutical industry, it is important that drug manufacturers seize the opportunity to reexamine the drug discovery and development process. To improve R&D efforts, it is essential that drug manufacturers evaluate the way in which they adopt and deploy new life science technologies in order to allow nimble, reiterative drug development. In addition, the pharmaceutical industry needs to rethink the process of indiscriminate outsourcing and instead bolster its internal control of critical path activities that ultimately help determine the speed and efficiency of the entire drug development process. The current cost of enabling tools, both in terms of capital equipment and labor, has reached an attractive price point that renders this a compelling value proposition. Given the long timeline and high cost of drug development compared with the relatively modest cost of keeping key technologies in-house, the benefit of being able to make swift decisions at critical junctures is a simple, yet tangible way of improving the ROI and ultimately creating more successful drug candidates.  
Kevin Hrusovsky was appointed President and CEO of Caliper Life Sciences in 2003, following the acquisition of Zymark Corp. by Caliper. Hrusovsky served as president and CEO for Zymark and president of the pharmaceutical division at FMC Corp., and ran the Teflon and other specialty businesses at Dupont. Hrusovsky is on the Global Research Council for Children's Hospital in Boston and is a member of the Association of Laboratory Automation's steering committee. He received his B.S. in Mechanical Engineering from Ohio State University, an M.B.A. from Ohio University and an honorary doctorate from Framingham State University for his contributions to life sciences. He has served on several public life science companies' board of directors.
References: 1. Stanko, M., J. Bohlmann & R. Calantone. "Outsourcing Innovation." Wall Street Journal.  Nov. 30, 2009.



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