Raising the Stakes in CNS - Pharmaceutical Executive


Raising the Stakes in CNS

Pharmaceutical Executive

Float or bloat in R&D

Jonas acknowledges the Shire "search and develop" model, but says it's more like "search and rescue," since "there are lots of really good assets out there that may have languished because of regulatory uncertainty." Innovation at the discovery level, says Jonas, has to come from multiple sources, which is why Shire's model makes sense. "Who in their right mind would hook themselves up to one supplier or one thesis?" he wonders. "If you acknowledge that innovation has to come from everywhere, not just internal, the whole thesis of being an R&D organization goes away. Why would I want that?" Once a drug goes from preclinical and animal studies to human subjects, at that point "skill sets are more transferable and more stereotyped; and there you want to bring some things in-house," says Jonas. On conducting trials, he says smaller is better. "I don't need a thousand patients because if I'm looking for a bigger effect, I need a smaller study. The point is that if you need more than 75 patients per arm, you're looking for significance, not value. That's how we see it."

Other big pharmaceutical companies would almost certainly dispute this conclusion, but Jonas says that organizations that focus on discovery are "intrinsically building infrastructure and intellectual bureaucracies...they develop an inertia that impedes innovation because very few people will say, 'That molecule and mechanism is better than mine. Fire me and bring that in.'" Despite a desire to keep clinical trials small, programs exceeding 1,000 patients are almost inevitable, and Shire's Phase III program in depression for Vyvance is roughly 1,500 patients, Jonas said on the earnings call. He expects a Phase III binge eating trial to be of similar size, but said the programs are "easily manageable by Shire, and are well within our wheelhouse for how we operate."

Intersection of value

As a kid, Jonas used to hang around the Graybar building, on Lexington Avenue in New York City's midtown. "My father was a dress buyer, and the Graybar building was a cutting factory," he says. The experience was influential. "At some point, we've got to look at ourselves like a retail business. We need products, an immediate product that's better and more effective, or has some kind of value to offer."

Will Jonas's approach to R&D at Shire—based on demonstrating large effect sizes in small clinical programs, and leveraging quality of life measures—take the CNS franchise into new realms and revenue streams? Can Shire stake out the middle ground between hard and soft value in CNS, and keep shareholders and the street happy at the same time? Based on full-year earnings in 2011, Shire's specialty division, which includes the ADHD portfolio plus six other key products (three of which are for GI conditions), comprises 61 percent of the business, and brought in $2.6 billion in sales, an increase of 18 percent from 2010, according to company reports. The jury is still out on the company's regenerative medicine unit, which also falls under Jonas's remit, but Shire has a history of "out of the box" acquisitions, says Steinberg, pointing to the success of the human genetic therapies business unit. For Vyvanse, Shire has predicted blockbuster sales this year. With another decade of patent protection in the United States and Europe, a growing middle class in Asia and Latin America and an entrance into Japan via Shionogi, Shire seems poised to expand the brand into new therapeutic areas and geographies. But as Jonas says, the CNS category is a murky one when it comes to the production and management of data. For the strategy to work, regulators, payers, physicians, and patients will also need to broaden their perspective, and decide what value means to them.


blog comments powered by Disqus

Source: Pharmaceutical Executive,
Click here