What's the Deal at Solvay? - Pharmaceutical Executive


What's the Deal at Solvay?

Pharmaceutical Executive

Solvay has been moving into emerging markets. How do you see yourself positioned in those markets?

Let me give you an example. In Russia, we started 10 or 12 years ago, from scratch—completely organically grown. In the '70s, Solvay acquired a company in Hanover, Germany, which had a lot of connections to Eastern European countries. Another company acquired was Philips-Duphar (Philips, the British electronics company, and Duphar for Dutch Pharmaceuticals). Now, the Dutch and the British were once the largest shipping and trading nations in the world, and that company was very strong in the parts of Asia where Dutch colonies used to be. More recently, in 2005, we bought Fournier, which was also strong in emerging markets—Vietnam, Korea, and other places the French empire had been. So, between the Germans, the Dutch, and the French, we actually covered a whole lot of emerging countries. Those people knew how to use the local competencies to help build those markets.

Many big pharmas are racing to enter China and India. What's your strategy moving forward?

Our strategy is to continue to build in those countries, both organically and through acquisitions. There is no single way of doing that. What you do in Vietnam is not the same as what you do in China or Russia. And I think this may be one of the things that the American drug companies have underestimated. Very often they try to transport the American model to an emerging market, but it just doesn't work.

Currently you have 10 drugs in late-stage trials. How does an organization of your size handle such a heavy pipeline, and how did you get yourself into such a fortunate position?

To be honest, we handled that with lots of difficulty. Some of the drugs came out of our own discovery, others were acquired or licensed. There are a number of challenges with that size pipeline. First, do we have the competencies to handle [all of the drugs]? If not, we have to find a partner, and that's why we outsource a lot—but strategically, not tactically. The difference is, tactical outsourcing is what you do if you have peaks and troughs in your activity and you want somebody to help. Strategic outsourcing is when you say, "Someone else does this much better. So why would we do it, provided we have good governance in place?"

That's why we've had an eight-year relationship with Quintiles. They do all our trials. We have clinicians and statisticians, but no clinical operations anymore. We don't have data management. We don't even have data anymore! The data are in Quintiles' systems. Why would I build an IT system, if three years from now I have to throw it out and build a new one? I'd rather use the money to include patients in trials.

Can you characterize the opportunity Duodopa presents for the company, and also explain why is it just coming to the US now?

Years ago, I was asked by an interviewer, "What is your ambition for the rest of your career?" And I said, "I would like to be—even if it were only once—associated with a product that makes a real difference for patients." If you think about it, a career is 30, 40 years, and it takes 12 to 15 years to develop one of those damned products. So I looked for that [product that would make a difference] while I worked on a number of other interesting things. But once I found Duodopa, I knew I had it.

And why is that? Because it's a very simple observation. In a binary clinical trial of late-stage Parkinson's disease patients, before they get the treatment they are in a wheelchair, and after they get it they walk.

I still remember, in the fall of 2004, the core business development people came with new opportunity. It was actually very simple. There is a misconception that L-dopa stops working in Parkinson's patients. But L-dopa works as well at the late stages of Parkinson's disease as in the early stages; the problem is one of delivery—the oral form doesn't get where it's supposed to be.

The innovation comes from the University of Uppsala [in Uppsala, Sweden], where a neurology professor, working with a man from the Formulation Pharmacy department, wanted to infuse L-dopa directly into the duodenum [the first section of the small intestine]. In order to do that, they needed a device—a small tube—and the tube needed to have a pump with a reservoir for the drug. But L-dopa is a difficult compound, and so they invented a gel form; that combination is the innovation.

The gel—which goes through a highly sophisticated minipump, including a tube that goes directly into the patient's duodenum—provides a steady delivery of warm L-dopa, which in turn goes into the brain. Patients who cannot walk, or who can only barely walk on traditional treatment, stand up and walk half an hour [after treatment with Duodopa]. It's like a car that's out of gas: You put gas in the tank, and five minutes later the car runs again.

Now, when I first saw this, I couldn't believe it. I was skeptical. So I went to Uppsala and met with a few patients, and the next day we signed.

So why have patients in the US had to wait so long to get the treatment?

The product was invented in Uppsala, developed locally in Sweden, and approved in Sweden six, seven years ago. And that's when we came in, took it over, and completed the trials for approval across Europe. We went to see the FDA early in the process, and they were very unreasonable—and they're still unreasonable today because they want us to do placebo-controlled trials. But we couldn't do that.

Because of the cost?

Not the cost, but the ethics. The patient has to go through surgery—a small incision—to implant the device, and justifying that for a placebo trial is very difficult. But the FDA has a point. They say, "This is a device, not just a drug. So we want to test the whole system—the pump, the catheter, and the incision." That is fair. The problem is the placebo-control part of this, for two reasons. It's ethically very difficult to justify. And secondly, if you have two patients on Duodopa and two on placebo, after an hour you likely know which is getting the treatment because most of the time they are already walking. So there are all kinds of methodological issues with breaking the blind.

What we do now is run [trials] by a board of patient associations and key opinion leaders, so that we are not involved in those aspects.

So you are running placebo-controlled trials?

Yes. They're starting.

How did FDA respond when you said you couldn't run placebo trials?

Well, they understood. We worked with them to find the solution. But we have had this hurdle a lot of times. You talk to people and they say, "This is a miracle. What's in there?" "L-dopa." "Oh, that doesn't work." There is skepticism, which is normal because it doesn't work if you take it orally for a longer time. The product itself, the active ingredient, if you get it to the brain, works as well in the late stage as in the early stage of disease.

So now Duodopa has fast-track status. When will FDA review it?

The trials will go another year and a half, then we file it, and fast-track is done in six months.

I think eventually this is going to work out. Once the individual investigators have some patients in their trials, and they see the difference, they will find a way to expedite, accelerate, whatever.

If Solvay has a very promising Phase III Parkinson's drug—and others in their late-stage pipeline—why wouldn't a Big Pharma choose to acquire you?

That's one option. But don't forget, the company is structured the way it is for good reasons. If we make such a change because we need more capital, whatever comes out of that has to create a strategic advantage. It's not such an easy question to answer.

What do you see as your main challenges for the rest of 2009 and next year?

For us to come to the right decision in this strategic evaluation—whatever the outcome is—it's a challenging assignment. At the same time, we must continue to execute Transformation 2015. And with all of that, keep our people motivated That's not always easy.

As for any other company, product sourcing remains the key. That's the biggest challenge for the whole industry. Me-too inventions are not rewarding, and that's very unfortunate because true breakthroughs are rare.

When talking to people about this, I always compare drugs to cars. If you look at it from the outside, the car today looks much like it did 10 years ago—it sill has four tires (most of the time), a roof, windows and doors, a steering wheel. But otherwise, the technology is nothing like it used to be, in terms of safety and efficiency and more. So today you wouldn't buy a car from 10 years ago. But it's not like they invented this brand new, safer, more efficient car overnight—it was all incremental innovation.

In pharmaceuticals, sometimes we do have a breakthrough, but very often, we have to rely on this incremental innovation on an existing concept.

Is that how Duodopa is characterized, because the active ingredient, L-dopa, was already available?

You could say yes, but that would be an extreme misunderstanding of incremental innovation. In some countries in Europe, for reimbursement, they were going to compare Duodopa with a pill of L-dopa. But this entire drug-device system has nothing to do with [prior treatments with L-dopa]. Then they say, "Well, inventing a gel. What's new there? It's just the same L-dopa mix." But the thing has to be stable for a day. It has to go through this tube, and not precipitate.

So, there's a lot to this invention, and to incremental innovations in pharma in general. But unfortunately in a number of bureaucratic and other institutions, that's not understood. And this is going to be very bad for patients over time. As a result, a lot of disease areas that are considered trivial are not addressed.

That's the other problem—we have made disease trivial. You're sick, you go see a doctor, and you expect that with some medication or some intervention it will be fixed. And you know what? Very often it is, and if you're the patient, that's not trivial any more. But from a public view, we have trivialized disease to that extent that we believe that it's not so important any more.

Take, for example, irritable bowel syndrome [IBS]. It's one of my big frustrations. We worked on an IBS drug with very good clinical data, and eventually it was not approved because it had rare side effects—which were perfectly manageable, by the way—but the hurdle is so high in this environment that we couldn't justify the cost of taking the development further.

Many people who don't have IBS think it's very trivial—it's just some form of diarrhea. But if you have IBS, it's not trivial anymore. If I had IBS, we could not be sitting here for more than half an hour. I would not have come to New York yesterday, because I could not get on a plane. So once you have that disease, it's not trivial anymore—especially if you don't have access to medication.

I think that a combination of that [attitude] and the fact that me-too innovation is not rewarded is a very serious challenge for our industry.

You rose to CEO out of the R&D side of the industry. That's rare these days. Are there particular advantages to having that experience?

I believe that going forward in this industry, you will see this happen more and more often. We have neglected the scientific, medical, patient-directed aspects for the commercial point. I think we have to go back to those aspects. It's the way the industry was started, and I think we will get back to that.


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