Outsourcing the problem

A Roundtable with ActivX Biosciences, Lab21 Limited, MPI Research, Nanoxis AB and Olink Bioscience

NGP gathers some of the industry’s leading experts to discuss the growing relationship between pharmaceutical companies and the outsourcing space.

“It can often be less expensive to outsource projects to specialist organisations for a defined period of time rather than use full time employees within your own organisation”
-Dr Berwyn Clarke, Lab21 Limited

NGP. Pharmaceutical companies often outsource various aspects of their business process to contract research organizations (CRO) so as they can concentrate on their core activities. What has been driving this trend in the industry?
John Kozarich. At the risk of oversimplifying a complex issue, the main drivers for most companies are reducing costs, accessing expertise and leveraging internal resources. Cost reduction may well be the primary driver in the current economic environment. CROs are able to provide key R&D services much more cost effectively than a company can build internally. In addition, the customer is not encumbered with the ongoing expense of additional employees. The CRO may also provide the company a high level of specific scientific expertise that does exist internally. This can be an attractive feature of specialty CROs, such as ActivX Biosciences. Overall, the main goal of outsourcing to a CRO is that it leverages one’s limited internal resources and synergizes R&D effectiveness. This can be achieved many ways from accessing low-cost medicinal chemistry groups in Asia to expertise-rich technology groups in the US and Europe.

Dr Berwyn Clarke. Two factors have driven this trend. Firstly, cost efficiencies, since it can be less expensive to outsource projects to specialist organisations for a defined period of time rather then use full time employees within their own organisation. Secondly, as personalized medicine evolves, the regulatory authorities are requiring a range of new services and technologies to provide the data for clinical trials. This can mean the requirement of specialist skills to provide services that the pharmaceutical companies would not normally operate in-house. The advent of biomarkers means that new products may be licensed in conjunction with the requirement for companion diagnostics. As most pharmaceutical companies do not have their own associated diagnostics business this means that it needs to partner with a company who can develop the required assay, achieve regulatory approval and commercialise it in the geographic regions where the new medicine is launched .

David Serota. As pharmaceutical companies pare back their fixed costs, they are increasingly turning to CROs for their preclinical and clinical research needs. The trend toward outsourcing research is also driven by the fact that CROs have become better equipped to handle these studies and there is a heightened demand for specialty toxicology and large animal studies. The major players in the CRO market have all had heavy capital outlays for physical plant expansions and technology improvements. With an increased regulatory emphasis on patient safety issues and larger IND packages, the pharmaceutical industry is no longer funding such expensive research programs in-house. With increasing frequency, they are turning to the CRO industry for its expertise and ability to move their drug development programs forward.

Anders Karlsson. There are several aspects as I see it. Projects of limited size are often better to outsource. Such projects need to be planned and executed often by people already heavily involved in other high priority projects. Also, instruments and equipment must be booked that are needed in other workflows, thus hindering these projects. Data evaluation and reporting are also often time consuming. Another aspect is that instead of a lack of time and human resources, there is a lack of specific knowledge and instrumentation. A key driver for this trend is one already stated above – companies need to focus on their core activities. Another key driver is the growing possibilities to outsource more and more of the company’s activities to solution providers, such as Nanoxis, which adds value in the form of specific knowledge, technology and products to a successful project.

Simon Fredriksson. Pharma companies are always interested in new, enabling technologies that contribute to a better understanding of drug-target interactions. However, they rarely have the time or resources to evaluate them. A technology like in situ Proximity Ligation Assay (PLA) adds essential information to improve the quality of leads; pharma customers ask us to provide the expert knowledge to introduce the assay into their discovery workflow. The assay is attractive since they are easy to adopt once developed.

Olink Bioscience is not a traditional CRO. We develop specialist assays for specific protein interaction studies, such as the EGFR family & GPCRs in intact cells and tissues and their downstream signaling pathways.

NGP. Can you outline some of the services you provide and explain why these stand out in comparison to your competitors?
BC. Lab21 is unusual because it offers clinical diagnostic services but also has its own diagnostic manufacturing and regulatory affairs facility. A pharmaceutical company can come to Lab21 with a biomarker that may be important in the development of a particular compound. In some cases there may be no robust, reliable and reproducible assay available to measure this marker (normally either a nucleic acid or protein). Therefore, Lab21 can take the basic concept, develop a robust assay that can be used to support the clinical trial and actually run the trial within its accredited testing facility. In addition, Lab21 has established high quality logistic support so that samples can be rapidly transported throughout the world to ensure timely data generation. Furthermore, we can undertake all the regulatory and manufacturing processes required to generate the fully approved diagnostic device.

DS. MPI Research offers a full-range of preclinical research services, from concept development through regulatory submission. We are best known for our toxicology services, which include General Toxicology, Developmental/Reproductive Toxicology, and Infusion Toxicology. Our Safety Pharmacology group is staffed by thought leaders in the field and the Neurobehavioral Sciences group holds a preeminent position in the industry. Our Discovery Center of Excellence offers Immunology, Pharmacokinetics, ADME, Molecular Imaging and Targeted Discovery Research. Analytical/Bioanalytical Sciences, Surgical Service and the Clinical and Anatomic Pathology departments round out our service lines.

Due to this wide scope of research services, many sponsors find that when they conduct all of their preclinical research with us, they gain efficiencies that would not have been possible if the studies had been placed with multiple CROs. Communications about projects are enhanced by locating our study directors in close proximity to each other and to the laboratories. In addition, efficiencies are gained by maintaining the test article within the same facility and analyzing samples onsite.

AK. We build our service around our in-house developed LPI (lipid-based protein immobilization) technology. We currently have two products, LPI Maxi and LPI HexaLane, available on the market based on this technology providing rapid and simplified ways to work with intact membrane proteins. The membrane fraction from cells is processed by sonication into small vesicles, which are then immobilized onto the unique surfaces of LPI FlowCell. Applications include target identification and characterization, increased sequence coverage using multi-protease protocols to mention a few. We also provide in-house expertise in membrane preparations from cells, LC-MS/MS analysis and data mining. A typical project involves membrane preparation from cells provided by the customer, LPI processing, LC-MS/MS analysis, data mining and reporting. Due to the vast flexibility of LPI FlowCell and our broad competence within membrane proteomics we are in many cases able to execute tailor-made projects around a specific question.

SF. Olink Bioscience designs assays from scratch to enable our customers to see receptor response to drugs at the molecular level in tissue samples, which is not possible to study by other means. It allows us to accurately quantify dose response at the molecular level – where the action is – which may lead in the long run to molecular companion diagnostics, where the target protein interaction under investigation is used as a drug response biomarker.

JK. Since our founding in 2000, ActivX Biosciences has been the industry leader in the development of activity-based proteomics (ABP) for drug discovery and development. Our ABP technology is enabled by proprietary chemical probes, which permit the rapid, comprehensive and quantitative activity analysis of major protein families, such as proteases and kinases. Our KiNativ platform is the premier system for the in situ profiling of inhibitors of protein and lipid kinases. The development of kinase inhibitors is a major focus of pharmaceutical and biotechnology companies. With over 500 protein kinases predicted in the human genome, the issue of inhibitor selectivity is critical to identifying a safe drug. A number of companies offer kinase profiling services; most of these use platforms that utilize recombinant constructs of the kinases in an artificial assay mixture. Others use whole proteomes but have cumbersome methodologies that lack sensitivity and are not truly quantitative. The KiNativ ABP technology outperforms the competition in virtually all aspects.

NGP. What steps does the consultation process typically follow when you embark on a research project with a pharmaceutical company?
DS. At MPI Research, scientists communicate with scientists during the study collaboration process from start to finish. A study director leads the project research team, and maintains close contact with the sponsor throughout all phases of the study. Specific sponsor expectations are clearly delineated, and the research team is dedicated to seeing that those are achieved. Some sponsors take advantage of our program management services. If this is the case, a program director acts as an internal advocate for the sponsor that has multiple studies with us. This person is dedicated to seeing that sponsor needs are met in a timely manner and that open, frequent communication is maintained.

AK. First of all, to understand and outline the needs of the customer is crucial. When customers approach us, or we approach new customers, we start with a technical feasibility study. The outcome of this study usually sets the frame for deliverables in a project. From that point on, discussions refer to structuring the project, making a project timeline with milestones, deliverables and cost estimates. In many cases we break down the project into sub-projects with stop/go decision points and make cost estimates for the sub-projects.

SF. Usually, we receive an enquiry to apply in situ PLA to a pharma company’s pet drug target. We perform assay development and assay validation on a dozen samples as a proof of principle for the customer before engaging in projects of a larger scale. We establish a close communication with our client so that they fully understand the interpretation of the resultant data. The next step is the expansion of the study to a larger cohort, or the pharma company could choose to bring the assay in-house.

JK. Most other kinase profiling platforms provide standard readouts of IC50s as a measure of potency of inhibition by an inhibitor. There is basically no real consultation that needs to take place; you send your compound and you get an inhibition profile. The KiNativ platform by ActivX is a high content profiling system that contains many layers of information that provides a greater understanding of the function of a kinase inhibitor in different tissues. Therefore, we spend time up-front with the customer understanding the tissue responses they are looking for and the therapeutic area they are focusing on. The reason is that the KiNativ platform can be run in their specific target tissues so a true picture of the inhibitor response can be obtained. Other platforms based on recombinant kinases cannot provide tissue-specific information. We have learned that many inhibitors respond differently in different tissues due to different protein interactions. This information is inaccessible in recombinant platforms. However, this is the strength of the KiNativ platform.

BC. Projects between Lab21 and a pharmaceutical company progress through a fairly typical sequence: firstly, a non-disclosure agreement is completed prior to an initial meeting, where the overall specification of the project is outlined and the technical capabilities of the company are discussed. The next stage of the process is typically a small pilot study when the pharmaceutical company will commission Lab21 to validate its technical and management capabilities, often using blinded samples to demonstrate its ability to deliver accurate data within expected timelines. Finally, the project is likely to proceed to a full contract usually within a Master Services Agreement to cover multiple projects. The project will then be detailed and priced within a full project plan, which is then returned to the pharma company for approval. Typically the work will then proceed and is often priced against a series of defined milestones and a final payment when the completed project report is submitted.

NGP. What are some of the challenges that arise when you undertake an outsourcing project? Can you think of any instances when you have successfully overcome any of these issues?
AK. If the project is not clearly defined, you may have situations where the customer wants to expand the original study to include new experiments, re-runs, specific data-mining issues etc., previously not stated in the project description. Make sure that all partners agree on what is to be delivered and in what format. Naturally, during a project, new information and questions may arise. Thus it is always favourable to include in the original offer that if the project is expanded during the process, extra time and resources are to be charged separately. From our experience this works quite well.

SF. In situ PLA is essentially a highly specific and sensitive immunoassay for protein interactions and modifications in native tissue samples. Therefore assay success is dependent upon the quality of primary antibodies. Our expertise in both antibody selection and data interpretation often leads to rapidly overcoming the most common obstacles in assay development and validation.

JK. Most pharmaceutical companies tend to take an overly simplistic view of the factors affecting their kinase inhibitors. For instance, most medicinal chemists tend to view profiling information derived from recombinant proteins as truly representative of the in vivo situation. When KiNativ data suggests that the inhibitors respond differently in vivo, the initial reaction is usually to view the data as suspect since the recombinant data is more familiar. However, since our analysis is performed in whole cell lysates with native kinases present, the reality is that our data is closer to the true in vivo response. This is often difficult for some who are grounded in the presumed validity of in vitro assays to initially accept. Fortunately, we do have several examples where our customers obtained key information on the tissue specificity of their kinase inhibitors that could not have been obtained by other platforms.

BC. One of the biggest problems associated with outsourcing projects, particularly at preclinical level, is the open-ended nature of these projects. Science often does not progress as anyone would expect and projects can often over-run. It’s important to plan ahead and to structure the contracts so any over-run can be reimbursed. A second problem is that there is no constant flow of projects in the pharma business, sometimes multiple projects can come it at the same time, so it is vitally important to have a skilled and flexible workforce that can cover the majority of requirements that the pharmaceutical client is likely to be seeking. Within Lab21 we operate a routine molecule diagnostic service laboratory with skilled staff who can also adapt to the requirements of the pharmaceutical industry should multiple projects arise simultaneously. It’s also essential to understand the culture of the pharmaceutical client since companies can operate in very diverse ways. In order to maintain excellent communication, which is key to projects success, it is extremely important to understand the way that companies prefers to operate.

DS. When a company decides to outsource their preclinical drug research, unforeseen obstacles can occur. These can be minimized when there is good communication between the study director and the sponsor, and at MPI Research we place great importance on this. Our study directors help our sponsors to see that even though we may not have identical processes to those that exist within their organizations; their needs will still be met. This gives our sponsors the peace of mind necessary to be comfortable with our processes and procedures and confident that they will get the deliverables they need.

A challenge that I am sure most can relate to is when the test article delivery to the CRO is delayed. This immediately raises concerns about the study schedule. When this situation occurs, MPI Research does everything possible to expedite the reporting process on the back-end, so that the sponsor's milestones are met. When the test article delay is too great to do this, we work closely with the sponsor in adjusting timelines to accommodate their needs. Because of our commitment to open and frequent communication with our sponsors, this type of challenge is almost always successfully resolved at MPI Research.

NGP. How do you expect your services to help the pharmaceutical industry’s preclinical drug development programs moving forward in future?
SF. The industry is constantly struggling to qualify the array of drug candidates on which to continue research. We believe that this new concept of monitoring the efficacy of a drug to disrupt a protein interaction at the molecular level in real-world tissue samples can only help to improve the quality of leads moving into the candidate stage. Information on kinetics and interactions are recognized as important in FDA submissions, as well as strategically important to improve patent positions.

JK. Reducing costs, accessing expertise and leveraging internal resources are the paramount in choosing a CRO and the expense of drug discovery and the low probabilities of clinical success demand that the investment in a CRO provides significant value in all of those areas. The KiNativ platform at ActivX has the proven to be of broad-based value to the drug discovery process. By enabling our customers to make a well-informed decision on their choice of drug candidate, we believe that ActivX is an ideal CRO for outsourcing kinase profiling. The high-content information of platform provides in unsurpassed in the field and can reduce the risk of failure later in the drug development process.

BC. The nature of much of Lab21’s pharmaceutical work is either clinical trial support or post-launch companion diagnostic service. In terms of preclinical work, the majority is focused on the antiviral area where we are specialists in lead identification, drug combination studies and antiviral resistance analysis. In particular we have a set of patents that allow us to rapidly and extensively characterize genotypic resistance against new drugs for hepatitis C virus. On the other hand we also have a growing business in the identification and use of biomarkers to facilitate R&D programmes across multiple therapeutic areas and this is likely to be a core part of support for the pharmaceutical industry in the near future.

DS. As our population ages and people are increasingly turning to medicine for answers to their health-related questions, having the right medications available to the physicians who are treating them is of paramount importance. A rather alarming industry trend that occurred in recent years is a slowdown in the number of new pharmaceutical products being approved. Mature and experienced CROs, such as MPI Research, have the regulatory knowledge necessary to assist pharmaceutical and biotech companies in keeping their drug candidates moving efficiently through the approval process. By functioning as a partner rather than simply as a service provider, we have saved our sponsors substantial amounts of time and money with our recommendations, which are based on years of collective experience and a broad base of scientific, technical, and regulatory knowledge.

AK. The services and products that Nanoxis provides have great potential. The flexible LPI platform has many application areas that the drug development programs may benefit from, including target screening, identification and characterization. The membrane proteomics market is ever increasing and our intention is to meet the needs from the industry by providing tools and methods that specifically address some of the major issues that are bottlenecks for membrane protein analysis today.

About the Contributors

John Kozarich is Chairman & President of ActivX Biosciences in La Jolla, a subsidiary of Kyorin Pharmaceutical Co. He is also Chairman of Ligand Pharmaceuticals and an Adjunct Professor at Scripps. Well known for his work on mechanisms of enzyme and drug action, Kozarich’s has spanned academia, Big Pharma and biotech.  

Dr. Berwyn Clarke is Chief Scientific Officer at Lab21 Limited. Following a career in the pharmaceutical industry with GlaxoWellcome, Dr Clarke moved into the Diagnostics Industry and founded Lab21 in 2005 to offer molecular diagnostic services to the pharmaceutical and clinical sectors specialising in companion diagnostics and personalised medicine.

Dr. David G. Serota, PhD, DABT, is Vice President of Toxicology and Pathology and Senior Principal Study Director at MPI Research. A member of the corporate management team, he directs a staff of over 60 Study Directors. Serota has worked for 32 years in the CRO industry, and is currently serving as a Councilor of the American College of Toxicology.

Dr. Anders Karlsson, Chief Scientific Officer for Nanoxis AB, has a PhD in Analytical chemistry at Göteborg University and is one of the founders of Nanoxis. He is also co-author of several pending patents regarding Nanoxis technology and products and has worked extensively with product and application development.

Dr. Simon Fredriksson is scientific co-founder and Chief Scientific Officer of Olink Bioscience. He has been a key figure in inventing and developing the Proximity Ligation Assay for protein detection. While at Stanford University, his work on the technology enabled multiplex protein detection for cancer biomarker research.