R&D Innovation: Climbing Out

December 1, 2007
Pharmaceutical Executive

Volume 0, Issue 0

A crush of Phase III failures triggered an R&D turnaround at AstraZeneca

The pharma fates have had their nasty sport with AstraZeneca of late. Since February 2006, the British drug giant has had to bury four billion-dollar babies: Galida, its oral PPAR antagonist for diabetes; neuroprotector-wannabe NXY-059, for stroke; the anticoagulant Exanta, for thrombosis; and lipid buster AGI-1067, for atherosclerosis. Each one was a risky, push-the-envelope drug; each one bit the dust in Phase III. To paraphrase Oscar Wilde, to lose one late-stage drug may be regarded as a misfortune; to lose four looks like carelessness.

As these embarrassments were playing out in public, John Patterson, tagged to head development in December 2004, was behind the scenes, putting AZ's entire R&D process and products through the pharma equivalent of AA's famous Step 4—"a searching and fearless moral inventory." As he candidly explains in this interview, every team in every therapy area had to make the case for not killing their darlings. It cannot have been a happy time at storied Stanhope Gate.

Still, it's nothing that every other top-10 pharma wasn't facing—AZ just had an acute case. Luckily, Patterson is a member of the Royal College of Physicians, in addition to running the company's Global Marketing division. He put R&D on a strict regimen that he calls Quality on Time, with the aim of doing more with less. And by all reports, the prognosis looks good. The company has already knocked two and a half years off its development time scale, while ramping up its pipeline to 157 projects, with eight in Phase III. You can be sure everyone at AZ is holding his breath as saxagliptin, the DPP-4 inhibitor for diabetes that it is developing with Bristol-Myers Squibb, approaches the finish line.

-John Patterson, AstraZeneca

For AstraZeneca and CEO David Brennan, 2007 may turn out to have been a decisive year, with bold moves to cut 3,000 jobs, shift out of manufacturing, and spend $15 billion for mid-cap biotech MedImmune. Here, John Patterson tells Pharm Exec about the big changes he has made inside the firm's discovery and development world.

Over the last two years, AstraZeneca has had four late-stage pipeline failures. Is there a thread that runs through all of these or were they very individual problems?

We believe that they were all very different but, obviously, we have analyzed some of the issues and tried to get to the bottom of them. Anything in late-stage development went into development 10 years ago, so there's an awful lot of history buried in some of these things. And given that length of time, there's also a changing outside world in terms of the perception of risk and the willingness to look at a risk/benefit ratio in a different way. Certainly that's been true of the PPARs [peroxisome proliferator-activated receptors] for diabetes [Galida]—you see what's been happening with Avandia.

In another instance [Exanta], we have the late appearance of liver-function changes, which just simply weren't predicted from the Phase II data. [AGI-107] was an option that we in-licensed, and [NXY-059] was a stroke compound. It's a bit like some of these Alzheimer's and COPD drugs—until you do a definitive Phase III study, you just simply don't know whether you have a drug or not.

So they really were very different, but that hasn't stopped us from making some changes. We're never going to stop attrition, but the challenge is to reduce it and to make sure that those things that are predictable are dealt with quickly and early.

Did you start this idea of change after the first big pipeline failure? Was it a high-level view, or are you approaching it by therapy area?

When we had Exanta [the first-in-class direct thrombid inhibitor anticoagulant] and Iressa [the first-in-class tyrosine kinase inhibitor for cancer], which wasn't a complete failure but was turned down by FDA—it's still doing well in Asia, the company changed the organization. I was brought in in January 2005 to diagnose the problem and then do something about it. So the answer is, it precipitated a significant change at the top.

With regard to safety and toxicology, where we were in 2005 is worlds different from where we are today. But in your first few days, did you see the problem? Is it something you're addressing bit by bit, or did you come in with a total plan?

I had four weeks between starting at AstraZeneca and facing the analyst community with our annual results. So I began by doing an absolute root-and-branch review of all of our late-phase developments and getting every team to put down in writing why it believed this was going to be a valuable medicine, but also laying out what the risks were—and what we were doing to mitigate those risks. It was that side of things where I felt we were not really being as up-front with ourselves about what we had in our hands and the overall complete risk/benefit balance.

I followed that over the next six months with the whole project portfolio of all 70 or 80 molecules. We reviewed every single one in depth, challenging the teams to come forward and tell us what their issues were and what they were doing about them. And at the end of all that, my conclusion was that we had to be much more brutal about the quality of our molecules and deal with them on a data-driven basis, rather than on a perception basis, to make the hard decisions. And we worked to have a key decision point for every single project. And the second thing was obvious: We were just simply too slow.

So I then spent the next four or five months with my management team agreeing on how we were going to change. And we brought in something that I called Quality on Time. So everything has to have quality: quality molecules, quality programs, quality people, and quality decisions. That's the core.

And then, obviously, time. We set for ourselves the target of a median of eight years for doing development from first GLP talks through approval. We had been running at eleven and a half.

Where were you tracking on cost and cost-effectiveness?

We were not doing well. Our R&D/sales ratio was low because we had very few Phase III projects. And we were doing a lot of work in the highest-cost countries and not challenging our cost base enough. So at the end of the day, if you don't have quality molecules, you waste your money.

So you really hit the ground running. How is it all working?

It's really only in the first half of this year that we are starting to see the benefits. We've taken a huge chunk out of our development plan's time scales—our median time now is less than nine years. We're seeing progress in all elements. We're even beginning to see it in discovery, where time from lead optimization to first GLP talks has been reduced significantly.

On the issue of reduced time, other R&D chiefs we've spoken to say they're also putting a lot of effort into the discovery phase.

I've always said, "You can do a bad job with a really good molecule, and it'll probably still get to the marketplace. But if you start off with a bad molecule, it doesn't matter how good a job you do, you've wasted your time." So unless you concentrate on getting it right at the beginning, everything else falls over.

In my view, there are two issues critical to successful R&D. One is speed, and the other is the attrition rate. If you can improve attrition even a little bit, it transforms the economics of R&D in our industry. And attrition is, to some degree, inherent in the properties of the molecule that you took in.

Can you give an example?

If you take a molecule into man, and it has a very short half-life and can't be used once or twice a day, it may well not be a successful medicine in the long run. If the only way you can get it to twice a day is to give huge doses, and if it's an anticoagulant, then your peak plasma levels will be so high that you cause bleeding problems in order to get the person anticoagulated. But something that has a 12-hour half-life can be given once a day with a nice smooth curve.

Or say you have a molecule that's first in class. It's exciting and interesting, but it has a little toxicology issue and may not be tolerated. But you take it forward, you end up in long-term tox, and halfway through your clinical program you have to stop because of major preclinical active issues.

In the biotech industry, for instance, we are seeing a lot of small companies that get product very quickly to man, but when we look at these things for potential licensing, they're so suboptimal that you often have to start again or go back to the series and design a better molecule.

Back to reduction in time: Where are you actually able to shave that time?

Every single piece of the process, from soup to nuts. We have target time intervals for everything. For instance, in the watershed between Phase II and Phase III. It's not uncommon for a Phase II program to stop dosing patients. Then you have a period of time where you get the results in and analyze them. Then you have your internal management decision making process. Then you say, "Yeah, that looks good. We'll go into Phase III." Then you design your Phase III programs. Then you manufacture the material for Phase III. Then you go talk to FDA and EMEA. And suddenly, you've lost 12 to 18 months. But if you start by planning for success, you can actually knock huge amounts of time off that.

It does mean going at risk. You have to spend money on manufacturing extra material. You design studies you may never do. But if you've got smart ways of looking at your safety and efficacy early in your development program, then you may well be in a position where you can take that calculated risk in Phase II.

We established with our oncology group something called Mission Impossible, to get the first Phase I dosing within two days of the IND. That means you've got to line up your investigators.

We've made lots of little changes, like having standard protocols. We have a small number of units that we are going to do a lot of Phase I oncology trials with. We've got an overall agreement, so we don't spend six months with the lawyers haggling over the agreement. We've managed to start a recent study within two days of getting the IRB approval.

We've heard a lot about molecular imaging and new imaging techniques speeding up the process. Are you using these as well?

Absolutely, especially in areas like CNS and oncology, where you can very quickly get evidence of efficacy, sometimes even in Phase I. An example would be if you could image amyloid or a particular receptor in the brain. If in the Phase I studies you can show that the drug's getting to the right place or changing the amyloid, you know that you may have a chance of changing the disease, which otherwise you might take years of subjective assessments and clinical trials to achieve.

With this kind of technology—and with biomarkers and genomic markers—we can make go/no-go decisions much quicker than we did previously. If we can measure a marker of success, we can see whether or not we're achieving that level at the maximum tolerated dose in Phase I in an oncology setting. And if not, we stop.

So it really is happening in Phase I.

Six of our last seven oncology products all had decisions made in Phase I based on biomarkers or imaging.

Is it because you're saving time that you're also saving money, or are you doing something more active on this front?

I just spend money—I don't save it. [Laughs] We're trying to do smarter studies. We can save both time and money by making Phase II studies smaller to answer the specific question. We're negotiating smarter deals. We're looking at using organizations like cooperative groups that can often do studies in big numbers of people much more cost-effectively than we can, and also altering geographically where we do the studies.

But throughout everything, I keep coming back to the word quality. We're not prepared to sacrifice either patient safety or the quality of the data to save money. That's a false economy.

Something else that AstraZeneca has done is to cut the number of heads in research. How have you been able to make up the difference?

In 2001, we were putting nine or 10 small molecules a year into development from discovery. Our discovery colleagues have worked very hard on that productivity, and now we expect to put about 24 molecules per annum into development. That huge increase in output allows us to ask, Do we really need the same number in discovery? If we can continue to drive productivity, do we need the same size and shape of organization?

The second thing is, we did a therapy-area strategy review last year, and we decided to grow certain areas, like infection and diabetes, and we decided a number of other areas would stay the same. But we also decided to exit some areas where we thought we had a dry well or little chance of success. And by doing that, obviously, we ended up shedding some of the people who were very focused on those areas.

And then the third thing we're doing, if you take regulatory and clinical, for example, we're looking at things that are core to our activity and things that are not. So in data handling, what's unique to AstraZeneca is the design of the study and the analysis and interpretation of the data. A lot of the work in between, in terms of handling the data—whether that's electronic or paper records—is, for want of a better word, grunt work. It's a mechanical process. And we can outsource some of that mechanical processing where the overheads are lower and it's more cost-effective.

One of the big news stories this week is that China now has more clinical trials ongoing than India. Over the next five years, where do you see the majority of clinical trials being conducted?

They'll be conducted where the best patient access can be gained and where the highest-quality clinical trials can take place, giving us the better values. That's a bit of a mouthful. We're always going to conduct some of our trials in North America and Western Europe because there are incredibly well-qualified investigators with good patient access in those places, and we are prepared to pay the cost.

But Eastern Europe is a growing area for us. And, in fact, we're starting to look at whether China, Japan, and other Asian countries can actually work together. The Japanese regulatory authorities have recently started to be more open to patients from other Asian countries being counted as essentially Japanese for the registration studies.

But I'm not surprised that China is doing more trials than India—it's a very productive nation with a very large population. And look at the way their population is gathered into hospitals and the way many of their leaders have been trained in the West. Also, on the eastern seaboard they have a standard of living and a quality of life and healthcare not dissimilar from many Western countries.

Across the industry we see numerous large-cap pharmas changing the way they do R&D—some a little, others a lot. Would you characterize these efforts as successful? What do you think is the future focus of R&D innovation?

I see a lot of different people doing a lot of different things in Phase I, like blurring the phases and looking at I/II rather than totally distinct trials, adaptive clinical trials, all sorts of pilot projects. They're all driven by many of the same things I've been talking about: becoming a more effective organization, geting the maximum information from the minimum patient exposure, and decreasing the risk of the entire process. At AstraZeneca, we're looking at personalized medicine in terms of selecting patients for our new therapies. We are doing adaptive trial designs. We are doing Phase I studies that have a major pharmacodynamic or Phase II-type component in them.

The other area is, we're all beginning to do much more in the way of comparative studies. We no longer bring to the marketplace a product that we know works, that we know it's relatively safe, but that we don't know whether it's better than the leader in the class. So we are prepared to go head-to-head with the best available agents out there to show that we have some advantages. If we don't do that, then when it comes to cost-effectiveness and payers paying, we won't be successful in the marketplace.

Do you have any final thoughts about specific areas that you think will see new ways of doing R&D?

I think most organizations will find ways of connecting their early-phase clinical to their late-phase discovery. People will look to focus in on geographic regions. People will always chase the new science, wherever that comes. And I think we will see more and more companies cutting back and becoming more flexible. By "more flexible," I mean working with the outside world in accessing new science and new discoveries, being able to move quickly into different therapeutic areas and different mechanisms when they start to break, and having a smaller, fixed internal cost base than previously.

And, certainly, for the next year, you'll have your hands full with your big increase in late-stage products.

What an exciting and great thing to happen. You know, we've spent two and a half years flogging ourselves to speed up the pipeline and also to externalize to bring projects in. And if that means we have a lot of projects in later-phase development, we'll live with that. As a corporation, we'll have to make some very difficult decisions about which of our children we like the best. But that's a problem we don't at all mind having.