I was inspired to post this article after someone said to me, “The drug development skills learnt in big pharma translate naturally to the biotech world … you just have a smaller budget”. While the technical skills are essentially the same, I feel strongly that the context and mindset in which they are applied are fundamentally different. This article highlights three ways in which “smart” small/medium-sized enterprises (SMEs) conduct drug development.
It is now increasingly common for biopharma SMEs to develop their own proprietary drug molecules, either to a specific business value inflection point in the R&D life cycle or even all the way to Regulatory Approval. Over the years, I have observed that Smart SMEs adopt a clever and entrepreneurial approach to drug development, whether they be virtual asset-centric companies or well-established platform biotech businesses with several hundred FTEs. I have summarized these approaches into three drug development principles for Smart SMEs:
- Mining Platforms and Parenting Assets.
- Increasing Asset Partnerability.
- Maximizing the Data Return-on-Investment (“DRoI”).
1. Mining Platforms and Parenting Assets
Big pharmas practice portfolio management in an environment of abundance by systematically pruning under-performing or strategically-deprioritized projects in regular portfolio reviews. In contrast, a biopharma SME has only a small number of technology platforms and molecular assets. It has to identify and exploit all the different ways to maximize the impact of these few “gold mines” or ”babies”.
A Smart SME will, within its resource constraints, try to generate evidence for several viable indications rather than focusing too early on just one indication. This contrasts with a larger pharma where, for business reasons, the project's therapeutic area franchise sponsor is often focused on a specific indication with a corresponding defined target product profile. In the latter half of the drug discovery process, the Smart SME will implement a clever non-clinical screening cascade to identify various viable applications. In the subsequent early clinical work, the Smart SME will conduct a series of initial studies looking for early signals of not just these viable indications, but also their various sub-indications, different routes of adminstration, and alternatives for place in therapy (e.g. first-line versus refractory, mono versus combination, etc.). With these insights, the Smart SME is well-positioned to, if necessary, pursue a succession of different development routes until eventually reaching the business aim of achieving clinical proof-of-concept or regulatory approval for the asset in question.
An analogy I often use to describe the above approach is that of parenting a child. Some parents might wish, when their child is born, that she or he grows up to be a doctor for example. Whereas a smart parent is more realistic and will put their child through various developmental activities on the academic, artistic, musical and sporting fronts until the child finds their feet in fields that they enjoy and excel in.
2. Increasing Asset Partnerability
Since they are constrained by resources and lack the scale for global commercialization, many biopharma SMEs partner their assets at some point in the project life cycle with other (usually larger) companies. A typical scenario is partnering at clinical proof-of-concept in Phase II; although some SMEs will take an orphan indication through to NDA by themselves before finding geographic marketing partners, while others might partner at Phase I or even Preclinical stage for certain indications and assets. Partnering is a core element of most SMEs' business models and much of what they choose to do in their projects will have a significant bearing on their partnering success. A Smart SME will partner at the optimal point for each asset, dependent on its scientific characteristics and the current commercial/competitive environment, rather than adopting a one-size-fits-all approach. Each asset's partnering strategy is proactively updated when new information emerges with respect to scientific readouts (own and competitors), recent deals of prospective partners, relevant regulator decisions, relevant payer decisions, and so on.
A Smart SME seeks to increase the “partnerability” of its assets with each successive scientific readout i.e. more potential partners will be interested and/or a higher partnering deal value is supported. It will do this by demonstrating evidence of risk reduction, differentiated performance (with respect to efficacy, safety, health economics, etc.), wider label potential, additional potential indications, etc. Unlike in a big pharma, it is not sufficient to demonstrate project progression to the next decision gate if partnerability is not increased.
3. Maximizing the Data Return-on-Investment (“DRoI”)
As an SME is usually quite resource-constrained, a key imperative in a Smart SME's project plans is maximising the Data Return-on-Investment (“DRoI”). This sentiment can be expressed as follows: “If I only have $X million to spend on this project in the next 12 months, what is the most valuable information that I can generate with this money?”
The design of a Smart SME's drug projects aims to cost-effectively generate data that either:
- Supports scientific and project decision-making to find the commercialization path(s) that will exploit each of its “babies” to the maximum.
- Increases the appetite for investors in event of an upcoming fund raising campaign.
- Attracts prospective partners for discussions somewhat in advance of the targeted partnering point for each project e.g. providing some enticing “hints” in Phase I before partnering in Phase II.
- Validates the project at a key partnering point (e.g. at clinical proof-of-concept in Phase II) in order to stimulate an auction situation and maximize the value of the deal to the SME.
The Smart SME will make a conscious choice not to do certain things until later, or to stagger certain other activities, if said activities do not directly contribute to some of the four aims above. For example, delaying some of the CMC scale-up work might in theory lengthen the overall time to NDA, but could be an acceptable or even preferred course of action if it shortens the time to a business value inflection point and a corresponding successful partnering deal.