With a new R&D structure and a high profile appointment to lead it, Sanofi is bidding for leadership in that “new model” the industry is seeking to replenish its anemic pipeline of new products
Reinvigorating the productive capacity of in-house R&D is the most prominent strategic challenge confronting big Pharma. There are many options but few guarantees beyond the cold fact that the costs of remaining an innovative player in this industry continue to rise. In its latest report on R&D trends for 2011, the Tufts Center for the Study of Drug Development estimates the average price tag for moving a compound from discovery and proof of concept to commercialization at $1.3 billion, after opportunity cost.
Pharma has limited options in guaranteeing that any new investment will deliver a market-friendly innovation. One that comes to mind: restoring mastery over its own house. As a result, new models to more efficiently allocate the hefty internal stake in R&D are proliferating.
Sanofi-Aventis is the most prominent recent example of a company that has built a new organization precisely to manage its exposure to risk through a better orientation toward the needs of the patient – the ultimate consumer of health care. New management is also part of that mix, with the appointment last month of former National Institutes of Health Director Elias Zerhouni as global head of R&D. Zerhouni initiated work on the redesign in his previous role as scientific adviser to CEO Chris Viebacher, so his appointment to the top job represents a vote of confidence in the approach.
New Focus on the “Big Five”
Simply put, the revamp follows previous changes in the structure of the company’s business units, dividing R&D resources and capabilities into five Therapeutic Strategy Units. [TSU]. Three of these cover major pathophysiology areas where there is significant unmet medical need: (1) immuno-inflammatory disorders, (2) infectious disease; and (3) fibrosis and wound repair. The remaining two incorporate work in a challenging area of public health [the physiology of aging] and a high-potential geographic segment [Asia Pacific region].
Each TSU has a staff of anywhere between 30 to 200 professionals with a clear remit to foster candidates that, at a minimum, can demonstrate “proof of concept” during phase II. The TSU integrates a range of internal and external capabilities that are leveraged very explicitly behind a critical analysis to determine how quickly a compound is progressed beyond proof of concept – or shelved. Managing this stage of the development cycle well can deliver significant gains to the enterprise, by ensuring that only the most promising work will progress to the truly high cost zone of testing that lies beyond phase II (b).
In a recent interview with Pharm Exec, Senior Vice President and Chief Medical Officer Paul Chew emphasized that the novelty of the structure lies in the investigatory latitude given to each TSU. “The premise here is there is no ‘one size fits all’ approach to modern therapeutics. The patient element is the basic driver of our plans, and we know that individual patient needs differ drastically. ”
It follows that the TSU can come up with many different paths to finding a treatment — in most cases it will be a pill in a bottle, but not necessarily. Vaccines can figure in the mix, as well as diagnostics, a high-tech instrument or remote access tool, even a new practice guideline or service offering. “It is the total health solutions approach we are offering. Each TSU has the full confidence of management to stretch the boundaries of what is traditional in our value proposition to the patient. We work around a totally transparent question: what does the patient need and how does he want it?” Chew said. Some of these adjacent but complementary technologies can be developed and led by others — 45 per cent of TSU work is now conducted with external partners.
Although the new structure has been in place for less than a year, it has already secured one benefit. “We are a much better partner,” relays Chew, “because the new structure provides a single ‘go to point’ in getting things done. There is now a straight line from the bench to the bedside, and less bureaucracy in between.”
It is true such logistical gains represent an early harvest. What remains to be seen is whether a redesign linked to process improvement can by itself induce the laboratory to generate good new medicines. Sanofi-Aventis is the current progeny of a culture that since the 1990s has endured no less than four disruptive mergers, involving two national champion drug makers once intimately connected to the political fortunes of France and Germany. So keeping the new R&D organization intact long enough to give Sanofi’s long suffering scientists a chance to focus on their own work is another big if – and a prospective acquisition of Genzyme,, with its own fiercely independent scientific culture, won’t necessarily help.