Facing the future

As the industry continues to come to terms with its need to evolve, there are those already looking towards the future to make changes for today – and for Nycomed, having key players with a finger on the pulse of the industry doing so, it can only be a good thing.

“We're inevitably going to be moving away from the blockbuster side of things towards targeting more specific people, and with that ensuring that those compounds really work in those people.”
-Nigel McCracken

The current face of pharmaceuticals bears little resemblance to its predecessors. Of course, its end goals remain a constant and no doubt the idea of research and development can be traced back to its common denominator, in the days where apothecaries were 10 to the dozen and R&D was nothing more than rudimentary testing. But gone are the days of modern-age, closed innovation, securing multi-million dollar blockbuster drugs on a conveyor-belt of success. Whipping through to proof-of-concept with minimal intrusion has vanished. Regulatory leniency? Think again.

But while the current face of pharmaceuticals looks little like its predecessors, the brains behind it still maintain an appreciation of its changing face - and at a time where the sector is deciding which path to choose to not just survive, but continue to thrive, these brains are the people who know what the industry needs. However, getting to that end point is anything but easy: open innovation, knowledge sharing and redressing the business model holistically are all ingredients to next generation success - but working out the right recipe is proving somewhat troublesome.

For Sham Nikam, Vice President and Head of Global Discovery, and Nigel McCracken, Vice President and Head of Exploratory and Translational Development - both based at Nycomed's Konstanz office in Germany - finding the right balance of ingredients is pivotal if the future of the industry is to be secured. But for the two VPs, having the same perspectives can be a stale process to progression at times, which is precisely why they take solace in grabbing both ends of the metaphorical stick. While Nikam believes comparing the US, European and emerging market sectors is like "comparing oranges to apples", McCracken asserts that: "we all have the same problem", which exemplifies the need for honesty at a time when the industry is becoming more fragile.

US versus Europe

"The US, Europe and emerging markets have very different payer systems," continues Nikam, "so I really don't think they are comparable in terms of revenue or how you market the pharmaceticals. They're not comparable in the way healthcare is administered and they're not comparable in terms of how pharmaceutical companies are run, so very different industries in all these countries." And indeed they are, with Nikam also highlighting the fact that the US has significant innovation in all areas of the pharma industry. Europe in general has limited resources for true innovation - whereas the emerging markets are focusing on incremental innovation around the old drugs and making them available to patients at competitive prices.

However, the biggest challenge in both the US and Europe is finding adequate financial resources. "Resources are short and everybody in the last decade has cut R&D spending," he says. "I also think that in terms of diversity of talent, the US tends to have a slight edge in its depth due to its political system encouraging immigration from all over the world. This is important for high quality innovation. In emerging markets there is a sense of 'having to prove' that they are not far behind and would like to show that they are also capable of bringing NCEs into development and eventually to the market."

Yet where Nikam is more on the payer system, which in turn provides revenues for future R&D efforts, he feels that it is important for the pharmaceutical industry do a better job of selling themselves as the creators of medicines that significantly help the relative society to reduce costs of healthcare by avoiding expensive hospitalization and health maintenance costs, McCracken's perspective concerns itself with the end-user - a constant of any pharma market. "We need to assure to the patients and peers that the drugs we develop have value to the end-user," he explains. "The question is, how do we do a better job of convincing people that we can do that, and how do we literally make it happen? Then of course there's the money aspect to it: yes, we're doing something good for people, but we still need to be profitable as well."

In order to continue to remain profitable, whilst ensuring confidence in the end-user, open innovation has been brought up time and time again as part of a potential solution to the sector's woes. But for an industry that is used to working in a closed environment, old habits and processes can be that much harder to break. In addition, big pharma, with its significant resources, will have to take the lead in undertaking cutting edge research to treat diseases that have alluded effective treatment.

However, big pharma has still to come up with a pharma R&D model that is cost effective and manages attrition in clinical development. They have indeed taken time to change the business model that has negatively impacted new drug discovery and innovation. Smaller biotechs are generally based on novel drug discovery ideas and have the 'can do' spirit but lack significant resources of big pharma. In emerging markets such as China and India, local companies have focused on generic products and are involved in incremental innovation that can launch novel formulations of known drugs for local markets and also in some cases for worldwide distribution.

"However, in the last ten years big pharma has not delivered consistently. This lack of delivery has - to some degree - come down to the fact that no one is prepared to let go of their IP. This is also because sharing of IP has not been done well traditionally. From an IP point of view that's your bread and butter. That's what's going to provide the money for your future. There are obvious examples from a safety point of view for collaborations, which is bound to be a hot topic, but IP - unless the regulatory groups increase that 20-year patent protection issue - is going to be a tough one," asserts McCracken.

The right perspective

The regulatory minefield McCracken alludes to is another 'hot topic' that often divides those sat within the realms of pharma. Of course the regulatory grasp has tightened across the board in recent years, but Nikam doesn't believe this to be the only issue. Conversely, he places emphasis on the reaction of the industry to stricter regulations as a bigger issue. In fact, it has encouraged the industry to address some of the safety issues more proactively and be creative in bringing new drugs to the market.

According to Nikam, it's understood that no drug is absolutely safe and it's the responsibility of the pharma companies to market safe drugs with the right therapeutic index - an inherent part of innovation too. In this regard, the pharma industry is doing an excellent job by taking attrition early and killing compounds in preclinical or early development stage when it is much more cost effective.

Adding to that notion, McCracken returns to the importance of being as patient-centric as possible - and we can all admit that public relations haven't been a strong point of pharma companies in years gone by. He believes that patients need to be more involved in the drugs that are being made, forcing out the habit companies tend to have of assuming what end-users 'need' as opposed to what they actually want. Together with the emergence of telemedicine and the concept of 'e-care', it looks as though the old adage of the life sciences and healthcare industries becoming far more sympathetic in their involvement with each other is on the cards to nurture this ideal.

That's all well and good as a concept, but for the immediate future, Nycomed has the strongest possible minds working at its forefront, pushing productivity and innovation through new technologies and tools to bring to market 'medicines that matter' to patients. "We map a portfolio that has a better than average chance of success in Proof of Concept (POC) studies and reflects high technical doability preclinically and in development," explains Nikam. "We have chosen a low attrition model through smart selection of projects and addresses significant unmet medical need. The overall strategy also involves a mix of precedented and unprecedented targets that ensures consistent delivery of candidates in stringent timelines."

Nikam explains that once the correct portfolio is in place, the next challenge is to find the right resources and identify key partners that can assist in bringing new technologies and expertise required for projects. "We are a medium sized pharma company that has a business model that encourages synergistic collaborations and partnerships. We at Nycomed do not believe in having all the necessary expertise or technology in-house and have partnered with diverse companies to support preclinical and clinical pipeline. Our development pipeline is a testament to our being an excellent partner."

And with the global financial downturn maintaining its position at centre stage, managing resources has never been more important. But arguably for the pharma industry, the economic downturn hasn't had as much of a direct affect as presumed - rather, the indirect consequences of widespread financial insecurity have provoked a change in environment that can't help but aggravate the industry.

"I believe that we will be affected by the financial changes," commits McCracken, "because all the measures that the governments are putting in place to save money is going to hit on pharma somewhere down the line. They're not going to be paying the same amount of reimbursement and there's going to be challenges for the pharma industry in the future because we're going to need to show real diversity and prove that the drugs actually work. Unless we can do that, we will struggle in the future to sell drugs.

"It may well be that some of the projects that go through are put on the backburner, slowed down or have their payments deferred. It works out that you have to become more efficient regardless; there's a reason we find ourselves in the environment we do today. But to be honest, the change is continual and you just have to react to things as and when they come and be flexible enough to do that. Most pharmas are run by people who are more business minded than most, which is fine because it's a business, but you need to be able to react to the environment that you're working with. If that environment changes then you need to be able to adapt relatively quickly and just get on with it."

The right balance

While this sentiment may alter slightly, McCracken's rule of thumb highlights the need for flexibility and an ability to adapt effectively - something Nikam agrees with wholeheartedly. "Nycomed is a privately-owned, medium sized pharma company," he asserts. "We have a different set up compared to a publicly metered company, so we don't have as much bureaucracy as a lot of other companies. We definitely see ourselves as nimble and quick, so decision-making at Nycomed is extremely quick. When we change our portfolio, terminate or progress projects, we certainly don't stumble. I've seen the big pharma scene first hand and it's made me realize that we are far more nimble and quick in taking and making decisions."

And if the launch of Nycomed's new drug Daxas, a phosphodiesterase 4 inhibitor for the treatment of COPD, is anything to go by, Nikam is certainly a man of his word. A first in class, phosphodiesterase-4-inhibitor with an anti-inflammatory component, Daxas has shown extremely good efficacy in the treatment of COPD and has already been launched in Europe. If it receives linear approval from the US FDA in the coming months, then it's all steam ahead for the creation in the US market, led by Nycomed's US partner Forest Laboratories - a solid transition from the EU market says a lot about a drug's potential.

But this isn't just down to hard work and having a solid team behind you: it's about understanding what direction the industry is taking and placing yourself accordingly - including building that consistent team - something both Nikam and McCracken are extremely well-versed at. "There is still this silo mentality in pharma," explains McCracken. "It's not as bad as it used to be and I think it's starting to get better. If you're working within an organization that is working together as a team, with seamless communication with a common goal then that's fine, however, that is not always the case. We employ people within the industry that are scientifically brilliant, innovative but we loose sight of the important fact that we also need these people to have good social and communication skills."

As McCracken sees it, you can have the best scientists in the world, but if they can't express themselves effectively then they're likely to become counter-productive to the team as a whole - hardly an innovation-hunting asset. Gaining the right balance is key to gaining the right productivity: being as proactive as possible outside your comfort zone is becoming the currency of pharmaceutical teams across the board - a notion Nycomed has done well to acknowledge.

"If you look at the way we work, we're doing a good job of making a difference to peoples' lives in many diseases, which are going to give a better quality of life, but also prolong age as well. We're inevitably going to be moving away from the blockbuster side of things towards targeting more specific people, and with that ensuring that those compounds really work in those people."

To McCracken, thinking ahead it's not just about personalized medicine, it's also about polypharmacy. Years down the line, people won't be taking one or two compounds, they'll be taking 10 to 20 compounds all at one time. What is important to know is how this concoction of compounds reacts with one another in vivo. How it's assessed and anticipated are questions that will need to be answered. This is where he sees the future focus being placed, which is precisely where pharma should be moving. For both McCracken and Nikam, the future is not only challenging - it's exciting. And with the quick-pace of Nycomed behind them, they certainly have their fingers on the pulse of the future.