Thought Leaders: Playing field in biotech/pharma partnerships levels - Pharmaceutical Executive

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Thought Leaders: Playing field in biotech/pharma partnerships levels


Pharmaceutical Executive


Lisa Drakeman, PhD
As infrastructure and business savvy within biotechnology companies become increasingly sophisticated, the sector's relationship with pharma is taking on a new shape. Improved financial capabilities at biotechs, coupled with pharma's pipeline problem, means the baton is getting passed later in the partnership game—if at all. In her 15 years in the biotech industry, Lisa Drakeman, PhD, CEO and co-founder of Genmab, has made deals with Roche, Amgen, Bristol-Myers Squibb, Johnson & Johnson, and Novartis, among others. "I've done partnerships with most of the major pharma companies at this point," she says. Drakeman has learned a thing or two about how to integrate cultures and processes—and she's not shy about saying where pharma is falling short.

Pharm Exec: What's your general outlook on where partnerships between pharma and biotech companies are headed?

Drakeman: When I first started in biotech, it was very hard to finance biotech companies. And biotech companies desperately needed partnerships. They did them on terms that today we would find unacceptable—you know, relatively modest royalties, relatively modest milestones.

Then we saw a new era. In the last four or five years—starting in 2000—biotech companies have been able to fund themselves better and are able to do more late-stage development. I think just as a general trend, where we are now is that biotech companies look to the future, and they do not want to be research boutiques for the pharma industry. The trend we see at the moment, which I believe the pharma companies will accept and are accepting, is for co-development partnerships for products.

What is the difference between co-development and co-marketing?

Co-development is the work that you are doing to bring the product to the market, or to expand the label once it is approved the first time. So that's what we do to make the drug meet the regulatory requirements.

Co-marketing, some people believe, means that you have two products with two names. Co-promotion means you are both selling the same product with the same name. So you have a coordinated campaign rather than competing with each other.

Typically, under co-promotion deals you have an agreement about the profit share. So regardless of who actually manages to get the sales, there is an agreed upon approach to profit share ahead of time. You typically agree on a proportionate marketing budget.

How have the inner workings of pharma/biotech partnerships changed over the years?

Ten years ago, you would get a product, hopefully through some clinical development—product licensing, not technology—and the goal would be to hand that over to a pharma company that you would expect to do all the development work, pay all the costs, and give you a call when they were finished.

Now, there will still be partnerships like that. We have one sort of like that right now with Amgen. But again, because the financing capability for the industry changed dramatically in 2000, companies have been well enough financed—even if we do not see the levels of funding that we saw in those years—that they can take products a little further in the clinic.

And what they would like to do, because we know that we make more money if we sell products ourselves than if someone sells them and gives us a royalty, they'd like to start to build their own sales forces and learn the things they need to learn to be a company that functions like a fully integrated pharmaceutical company. That means that you might get into Phase II, or maybe you will get to the end of Phase II.

Genentech and Roche's collaboration for Tarceva (erlotinib) is an example of that. The two companies were getting ready for Phase III when they recognized a net partnership. And they each pay a portion of the development expenses. And shortly, I think, they will be promoting the product together.

Because of pharma's current pipeline crisis, companies are really relying on biotechs to find products. How has that affected the playing field?

When you look at the billions [of dollars] that pharma companies spend on research compared to the amount that [biotech companies] spend, I do not know why [pharma companies] are not more productive. But they do not appear to be producing products at the rate that they need to.

What we find is that a lot of people are very interested in talking to us about our products. Before we launched partnering campaigns for our CD20 antibody and our ETF receptor antibody, both of which would be sort of second-generation candidates following Rituxan and Herbitox, people were getting in touch with us as we were presenting preclinical data.

There is a lot of interest among the pharma companies in having relationships with the biotech companies. They are all chasing clinical programs. It used to be that they were all chasing Phase III programs. But there are not enough of those out there, so now the pharma companies have moved back in their approach.

How do you decide which companies will make good partners?

From the outside, many of these pharmaceutical companies may look the same. You might be able to say, "This one has a larger sales force," or "This one has a GP sales force." So to some extent, there may be particular characteristics that would fit if one company has a special team for cancer or inflammation, for example.

But generally speaking, I think about the characteristics I like to find in a partner: They need to be collaborative in their attitude, with respect for the biotech company. Despite increased funding, biotech companies are small players in comparison to them. If pharma companies think that they need to make all the decisions and not work with us in a way where they respect the work and the ideas that our team might come up with, we are not very comfortable with that.

Our Roche partnership is an example of one where things go very well, and I think Roche is particularly good at working with partners in a collaborative way. In that case, we are actually making preclinical antibodies for Roche. They gave us $20 million upfront. They name the targets. We do the work of creating and developing the products, up through the point where Roche decides to take them to the clinic, where they are worked on under the leadership of a joint research team. If there are any issues, we have a steering committee that works collaboratively to resolve the questions the research team cannot fix on its own.

I think the most important thing in a partner is that they be fair and work diligently, and make the [biotech company] feel like an equal.

It sounds like pharma companies are being forced by their own organizations and pipelines to change the way they act and collaborate. Do you see any resistance from them on co-developing because of this?

I have not had anyone tell us that they are not interested in co-development partnerships. But I have not uniformly tested that proposition across all pharmaceutical companies.

When you think about a partnership, your first contacts are the business development people. But a partnership goes forward with interactions between your research team and the research team from the other company. That is a place where I think some people have more experience than others at how to be a partner. So even if the business people have very good social skills and know how to get along, the scientists, whether they work in the laboratory or run the clinical trials, also need to learn how to work with people from outside their own company.

Roche, as an example, has made a practice of partnering. They have probably signed more collaborations than any of the other pharma companies in the last few years. They have been really active, and they have set up a system of alliance managers that works very well.

An alliance manager is the person at the pharma company who serves as the primary contact. People on the biotech side can talk to them about business or science, or any issues that come up. Alliance managers are tasked with having an overview of the whole program, and also to be in contact with everyone at their company.

I think this works pretty well, because it makes it clear where the lines of authority lie within the pharmaceutical company.

Is there anything else you look for from Big Pharma companies in structuring these co-development deals? In other words, what would make you pick one company over another?

If you are talking to more than one company about business terms, you are talking about roughly the same idea. So it is not very difficult to talk about royalty rates and milestones across the board.

There are other items that become more interesting, though. For example, if you sit down and talk about what a clinical development timeline would look like for your program—simple things, like how much time there will be between one study to the next—how do you plan so that you have the minimal amount of time when you finish one study before you go on? Because we are a biotech company, we have limited money, and we have to keep moving. So things like that—how the potential partner works, what their standards are and how they move things forward—become very important. We always have a worry that things will slow down at the bigger companies. We seem to move faster than they do."

Do you think pharma companies are learning anything from biotech through these partnerships?

We probably believe that we do things that pharma companies don't. For example, I will not name it, but we talked to a partner who had a lot of genomic information and they were trying to sort a large group of targets. They did not know if these disease targets were actually in a disease pathway. They did not have an idea of how well they might work as drug targets or antibody targets.

One of the things we have done really well since we went public is sifting through potential targets. We have probably looked at almost 100 targets in the last five years and we have it down to a science. We have a list of steps that we suggest the genomic- or proteomics-type company takes. There are certainly some that may be doing it very well, but we also know of companies that do not do this as well as we do.

I think the big difference is that we have a different appetite for risk than pharmaceutical companies do. When you work in a biotech company, hopefully you share goals across the company. And everyone is pointed in the same direction, which is to move the programs forward. At a biotech company, if something goes wrong, the initial reaction is likely to be, "What can I do to speed this up? What can I do to fix this problem?" I am not convinced that is the first motivation in a large company, where I think people sometimes are redundant and trying to protect their positions. In a small company, people are less concerned about that.

How do you personally encourage that mentality among the people who work for you at Genmab?

I think it is really important to give people as much latitude as possible to do their jobs, to feel that their work is important, that they have some control over the contributions they are making to the company. We hire very skilled people, and we like for them to believe that their skills are contributing to the company.

We won the 2004 Helix award from BIO recently. We had a little celebration and videoconferenced in our other locations for it. I made a point of talking about what every group's contribution was, because we would never have made it if everybody did not do what they did to get the job done.

Does pharma prioritize marketing over science?

I think if you were to meet the scientists from a very large pharmaceutical company, they would seem as dedicated and interested in what they are trying to do as anyone who you would meet at a biotech company. They are generally very interested in the science, wanting to make progress, and wanting to move forward. Unfortunately though, there is a perception that pharmaceutical companies have put a lot of resources into marketing— maybe more than they should have—for "me too" products.

Biotech companies tend to work on products for unmet medical needs. I mean, [biotech companies] are small, so we need to look for a business rationale that allows us to compete. That means that if we have a product for an unmet medical need, we are not worrying about whether we have to run commercials and whether we have the money for that kind of marketing expense.

Going forward, as biotechs start to take on sales and a bit of marketing, will these companies start to look more like pharma organizations?

Probably three or four years ago, I thought that the pharmaceutical companies would start to decline. They have declined faster than I thought they would. I think it has been a combination of not being able to bring new products along, and the fact that it is very difficult if you only have one or two new approvals a year.

So when I look at our industry, which I think of as biotech versus pharma, I think biotech's potential for growth is much greater than pharma's. And I think a lot of people in the biotech industry would like to build businesses that can grow in a sustained way. I don't know how many of us will succeed. But I think that is the desire and that it will change the way new products are brought to the market.

If we do a co-development deal for our first or second product, perhaps we can afford to develop the third product ourselves. I think there is at least a desire to grow companies to be like Biogen, and then Genentech—sort of growing in a stepwise fashion. I hope that we see more biotech companies succeed in that way.

Is there anything else that the pharma industry could do better, to form more fruitful partnerships with biotech companies?

Believing that people from companies outside your own could have good development ideas and good plans for moving forward is key. Some people believe they are very good at what they do, which they may well be. But that does not mean other people are not good, too.

Drakeman on Genmab What does Genmab have in the pipeline? We hope the CD4 program goes to Phase III soon. That one is really directed at an unmet medical need. It is for a form of T-cell lymphoma that appears on the skin. We were granted fast-track status from the FDA for it.

How did you get the fast track? You have to go to the FDA and demonstrate that there is what they call an "unmet medical need," which means there is not an adequate treatment—that despite what is available, patients do not have treatment alternatives. And you put together data about your product that shows it has the potential to be a new treatment. So it is a combination of your preclinical and clinical data, with what you know about the existing marketplace and what is available.

We have a fast track from FDA for our Humex CD20 antibody, also. In that case, it is for patients who have chronic lymphocytic leukemia that have failed first-line therapy, Fludarabine. There is general acceptance that patients who have failed Fludarabine do not have a treatment alternative. In the case of CTCL, the fast track is for patients who have tried everything that is on the market, and they still have active disease.

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Source: Pharmaceutical Executive,
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