ceedd of innovation

Over the past year, private-sector and governmental health-care reforms has put unprecedented pressure on prices for medicines. In the US, we’ve seen scores of announcements recently, and perhaps the biggest storm arose over the Affordable Care Act (ACA).

Regardless of your political leanings, watching the lead-up to the passage of the Affordable Care Act (ACA) wasn’t pretty. But, now that the dust has settled, we’re beginning to see some real opportunities aimed at encouraging and stimulating advancements within the biotechnology, pharmaceutical and medical device industries.

Digesting the contents of the 2,000-plus pages Act may be a tall order for smaller companies which lack a government affairs department and companies could easily miss incentive opportunities. At GSK’s Centre of Excellence for External Drug Discovery (ceedd), we work closely with our partner companies to understand any legislative or regulatory initiatives where they believe this could be an opportunity to improve the success of the alliance.

The following are a few of the programs within the Act that are directed towards supporting and catalyzing research and could ultimately have a real impact on the development of new treatments.

Cures Acceleration Network – The ACA mandates for the creation of a Cures Acceleration Network (CAN) through the National Institutes of Health. CAN will be dedicated to supporting research into revolutionary advances in basic research and the development of high-need cures. The law defines a ‘high-need cure’ as any that diagnoses, mitigates, prevents, or treats harm from any disease or condition, as well as ones that treat orphan diseases for which the market may not provide sufficient incentives to spur development. The support will come in the form of either research grants or contracts with the NIH, but, importantly, CAN is also charged with guiding the companies involved in the research through interactions with the FDA to ensure proper study design and facilitate timely approvals.

Clinical Trial Cost Reimbursement - Under the ACA, health plans must now reimburse the routine health care costs, such as blood tests, incurred during participation in approved clinical trials. While the manufacturer of the clinical candidate or device is still responsible for expenses solely related to the investigational product and the collection of data, the law is intended to reduce costs for some aspects of trials. In addition, the law prohibits insurance companies from discriminating against those who choose to participate in clinical trials.

Research Tax Credit – Through the QTDP, the ACA provides significant incentives for companies researching new ways to produce molecular diagnostic tests, reduce health care costs, improve drug delivery methods or treat unmet medical needs, giving special consideration to compounds aimed at treating cancer. Companies conducting qualified research can receive either a tax credit or a grant for up to 50 percent of research costs, making the incentive available to smaller companies with early stage compounds that do not yet have revenue.

Pain Research – Several components of the ACA are aimed at highlighting pain as a public health issue and stimulating greater understanding of and fostering treatment for chronic pain. Specifically, the law requires the National Academy of Sciences’ Institute of Medicine (IOM) to conduct a Pain Care conference to help identify barriers to treating pain and improving pain-related research, education and training. The law also provides continued support for the NIH Pain Consortium and instructs the Department of Health and Human Services (HHS) to provide grants to encourage better pain treatment.

Emphasis on Women’s Health – ACA specifically requires the placement of the FDA’s Office of Women’s Health within the Office of the Commissioner and charges it with consulting with any pharmaceutical, biotech or device manufacturer, , on any administration policy that affects women. The move gives higher prominence to issues related to women’s health within the agency and may signal a new FDA focus on diseases and conditions that affect women.

At the ceedd, our success is measured by our partner’s success. Sharing our expertise and vast external network with our biotech partners enables them to focus their energies on the breakthrough science that will bring tomorrow’s treatments and cures.

Have you ever been around those people who can make a perfectly sunny day feel like a bad storm? You know the type, the glass is always half empty, never half full. It’s always partly cloudy, not partly sunny. Nothing is ever as good as it could – or should – be. If you spend too much time with those people, it can start to rub off and suddenly, you find your perspective on things starts to sour.

Sometimes, when I read industry articles about the current drug development environment, I find myself wondering if the writers need to surround themselves with people who have a bit more of an optimistic outlook. While so many within our industry are painting a picture of doom and gloom, my colleagues at GSK’s centre of excellence for external drug discovery (ceedd) and I look at the same data and see many potential opportunities ahead. In fact, over the summer I had the pleasure of speaking on a panel session during the Argyle Executive Forum’s Leadership in Pharmaceuticals & Biotechnology Conference on this very subject, and I’m happy to report that many of my colleagues in the industry are on the same page.

Yes, the economy is not recovering as quickly as we had all hoped. Without a doubt, that makes some aspects of developing drugs more challenging. However, for those companies with compelling scientific platforms, that can develop differentiated therapies to meet unmet patient needs, this is an incredibly promising environment for three key reasons.

Survival of the fittest
While the current economic environment is forcing the industry to adapt and change to survive, many of these changes are good for both big pharma and smaller biotech companies. They probably needed to happen before the downturn, but the downturn has forced us to evaluate opportunities in a different way. We must now prioritize our resources toward only those companies with assets backed by the strongest science, offering the greatest likelihood of success for patients, providers and payors. While the pace of adaptation may be happening at a faster rate than observed by Darwin, those that are willing and able to adapt are more likely to survive and thrive.

Technological advancement
The past decade has produced enormous strides in technological advancement and scientific development. We now have a better understanding of many of the processes that lead to disease, which has enabled researchers and scientists to devise tailored approaches to specific diseases that promise to be more precise, effective and safe. This advancement has produced diagnostic tests that can detect which patients are more likely to develop a disease or respond to a specific treatment. And, these same processes have enabled protein scientists to manipulate proteins in ways that biochemists have manipulated chemicals for years. While there is much that we are still discovering, what we have already discovered has yielded some incredibly promising scientific breakthroughs, some of which are already making their way to the clinic and pharmacy shelves.

Health care reform
The U.S. market for any drug can greatly impact its success. While many questions remain about the impact of the recently passed health care reform legislation in the U.S., ultimately the bill will result in more patients having greater access to the treatments they need. This is very good news for patients, but it is also good news for pharma and biotech companies. Regardless of the promise of a new therapy, if it is not a differentiated, reimbursable medicine–its overall success will be impacted. Having more patients able to access medications means there will be more resources available for investing in the treatments of tomorrow. This trickle-down effect will prove beneficial for new drug development on many levels – helping to fund the early-stage development of promising compounds and fuel the success of new drugs once they have reached the market.

So, don’t let the biotech market prognosticators get you down. At the ceedd, we’re always in the market for transformative science that can lead to promising new therapies. In just in the last year, despite the economic downturn, we have continued to form alliances with three companies with incredibly promising science. We think the forecast is bright – not just for GSK and our alliance partners, but for all biotech companies that have highly innovative platforms with the potential to make a real impact in patients’ lives.

By Nicki Thompson, Ph.D., Director, Scientific Opportunities

Biotech can be a risky business. Targets might not be precise. Getting the drug into the cell or engaging the right receptors is a complicated matter. Clinical trials don’t always pan out as planned. But, when things go right, when targets are reached, milestones hit and proof of concept is established, it’s exhilarating. All the years of stress and strain seem to melt away as you see the faces of patients who now have a new treatment for their disease.

Getting through the pre-clinical stage to proof of concept takes vision, drive, and perseverance. It also takes scientific understanding, expert insights and a lot of funding along the way. Over time, biotechnology entrepreneurs have found many ways to get the money they need to advance their drugs through the pre-clinical development phase. While the recent financial downturn has made things more challenging, CEOs of companies with truly innovative science and promising platforms can still find the investment they need. But sometimes access to cash is only part of the answer. At GSK, we believe it’s not just about expanding the runway but finding ways to shorten the runway through smart collaborations.

When GSK created its Centre of Excellence for External Drug Discovery (ceedd) five years ago, we began experimenting with a new type of model for biotech alliances. This new model was designed to provide biotech companies with funding   to progress their early-stage science, while at the same time combining their scientific know-how and passion with the savvy and expertise of GSK’s global network to deliver transformative medicines. Frequently referred to as “option-based deals,” these phased financing agreements were ultimately designed to share the risk associated with drug discovery and development, while tapping into the best that both the biotech and the pharma company had to offer.

Shared-risk alliances can take many forms. Each is unique, based on the specific needs and interests of the companies involved. Essentially, however, it works like this: a pharma company signs an agreement with a biotech company, which provides a lump sum payment upfront, followed by further investment once key objectives are hit and there is continued confidence to invest in the program. If the compound makes it through to clinical proof of concept, the pharma company has the “option” to license the product and further develop and commercialize.

The ceedd experiment worked. From the beginning, we believed in these types of alliances as a model that benefits both parties. A biotech’s entrepreneurial atmosphere is difficult to reproduce – this type of support allows the company to continue managing their programs independently, while leveraging their creativity and ability to work quickly. At the same time, the pharma company provides powerful impetus to drive early-stage science forward through access to some of the world’s top experts in drug development and commercialization. We found the alliances that resulted created the best possible outcome for the asset (or assets) at hand.

During the past several years, other pharma companies have followed suit, adapting our model to fit their own corporate structures and ethos. Many in the investment community say that the growing popularity of risk-sharing alliances is because of the lingering economic downturn. While we can’t speak for the entire industry, for those of us at ceedd, it’s about creating a structure that supports and drives forward early-stage science for the best possible outcome, ultimately to deliver a medicine. If both companies have a lot on the line, each will work in ways that challenge the other to perform at its best, bringing forth the skills, experience and passion needed to drive a promising therapy more efficiently to the market and into the hands and lives of patients. In our mind, that’s a successful deal for everybody involved.

When you think about the idea of partnering for an alliance with one of the world's largest pharmaceutical companies, what comes to mind?

If the answer is not speed, agility and a willingness to treat the biotech as an equal, then you may need to rethink your options. These are precisely the qualities that could describe the centre of excellence for external drug discovery (ceedd) as we negotiated a recent alliance with Prosensa, a Netherlands-based biotech company with a range of both clinical and early-stage compounds.

The Courtship Begins: 'Speed Dating' and J.P. Morgan
Our relationship with Prosensa began at a conference in November 2008 during a type of biopartnering "speed dating". Prosensa had very compelling data on a compound and a technology intended to treat specific, but different, subpopulations of patients suffering from Duchenne Muscular Dystrophy, a rare and severely debilitating muscle disease affecting one in 3,500 boys, and for which there is currently no approved therapy.

Two months later at J.P. Morgan's Annual Healthcare Conference, our ceedd team was still impressed, while Prosensa remained to be convinced that GSK would make a right partner, believing our experience with orphan drug development and commercialization to be limited.

For our team, whose mission is to bring innovative and differentiated drugs to more patients, the J.P. Morgan meeting left us wanting more. With ceedd Research Director and Alliance and Project Leader Rick Cousins and his colleagues leading the charge, interest within GSK built quickly. So, while Cousins kept interest alive with Prosensa, the ceedd Head of Commercial, Bernadette Cummins, pulled together a team within GSK to demonstrate the company's long experience in bringing orphan medicines to patients and the considerable support structures across the globe that could enhance Prosensa's efforts to further develop and commercialize a number of their orphan compounds.

Getting to Know Each Other: A 'Reverse Sales Process'
Cummins and the regional teams from US & Europe made a presentation, a sort of 'reverse sales pitch', and it worked. Following the meeting, Prosensa looked at GSK in a different light. Both companies had a heightened sense that an alliance could work.

At the same time, Prosensa was actively engaged in similar conversations and processes with other companies, quite a few of which had organizational histories that were logical matches for Prosensa's pipeline of orphan drugs.

But as the process unfolded, our approach stood out and continued to distinguish GSK from the other corporate suitors. Not only did we bring GSK's expertise and resources that would strengthen Prosensa's drug development capabilities and help bring a number of their drug candidates to patients quickly, but throughout the process and its many twists and turns, our team consistently demonstrated our ability to respond quickly and marshal corporate decision makers – all while putting the needs of the small company on par with those of GSK.

Forming the Alliance
In the end it was the ceedd's ability to translate our core values of speed, agility and a culture of respect into action that tipped the scales in our favor. Prosensa executives commented later that the way that the ceedd uniquely handled the due diligence process was a key factor in sealing the deal with GSK for Prosensa.

While the specifics of the alliance deal were actually quite complex, the entire process – from "speed dating" to alliance partnership – took less than a year. By the time the deal was signed, both teams were already operating as colleagues, committed to mutual success.

It wasn't long before we found mutual success. In March, Prosensa initiated a phase I/II clinical study in patients with DMD of its compound PRO044, for which GSK has an exclusive option to license, which would be triggered upon successful completion of the study. Then in June, Prosensa announced the initiation of two additional programs under the alliance covering RNA-based treatments targeting different subpopulations of patients suffering from DMD.

Today, we're working very closely with the Prosensa team, providing insights when needed and drawing up resources within GSK to support Prosensa's continued success. It's the way we work. And the way we like to work. Most importantly, it's a process and relationship that's working well for both GSK and Prosensa.

For more than a decade, large pharma has experimented with a variety of ways to reinvent itself and boost its pipelines with important new medicines. A number of organizational approaches have been put to the test, with an aim to inspire speed and innovation in drug development during this post-blockbuster era; an era in which the know-how and demand exists to develop a greater number of increasingly individualized products, albeit with smaller markets for each.

Under tremendous pressure to reduce timelines and increase success rates in order to drive P/E ratios and shareholder value, large pharma has evolved toward incorporating smaller, more innovative therapeutic or scientific research units. Straight out pharma/biotech M&A has largely taken a back seat to the establishment of these smaller, autonomously operated R&D entities capable of achieving higher productivity than a larger research setting would typically allow. And, in an economy where biotechnology investment dollar flow has been stymied, there is a trend toward large pharma taking options to research-stage products – a win-win for both sides in terms of risk exposure. As science has advanced, and recognizing that R&D is not fully scalable, most large pharma leaders, including GlaxoSmithKline, and others have adopted a hybrid approach.

GlaxoSmithKline (GSK) was one of the leaders in this "new" hybridized world of the independent biotech enterprise within large pharma, combining the strengths of each; first with its own Centre for Excellence in Drug Discovery (CEDD), whereby six disease- or biology-focused business units (oncology, neurology, urology, inflammation, etc.) were established, each with its own leadership team and business plans.

More recently, and based on the internal success of CEDDs in increasing the number of compounds in GSK's portfolio, the Company in 2005 established the Centre of Excellence for External Drug Discovery (ceedd), to manage discovery alliances with other companies, more than 10 of which exist today. In 2009 alone, ceedd partnerships have been established with: Concert Pharmaceuticals for the development of deuterium modified drugs, including an oral HIV protease inhibitor; Prosensa for the development of RNA modulating therapeutics, including its Duchenne Muscular Dystrophy candidate; and Chroma Therapeutics for the development of macrophage-targeted compounds to treat inflammatory diseases. In line with GSK's scope, the ceedd alliance companies span a variety of innovative scientific platforms, with programs representing a number of diverse indications.

I witnessed GSK's commitment to inviting innovation from the outside firsthand, when Sirtris Pharmaceuticals, a company where I led business development efforts, was acquired by GSK in 2008. GSK recognized the potential within Sirtris to develop orally available, small molecule drugs to treat major diseases of aging such as type 2 diabetes. Today, Sirtris enjoys the same independence that the ceedd alliance companies have experienced after agreeing to work within GSK. This successful assimilation of Sirtris into GSK is representative of the power of supporting autonomous biotech units within big pharma to drive innovation. It was the autonomous nature and the mission of the ceedd - to bring more medicines of value to more patients – that resonated with me, and after the $720 million acquisition of Sirtris Pharmaceuticals by GSK, I was very excited to accept the role offered to me at the ceedd, working alongside some of the industry's most talented scientists.

This is a model that I believe has longevity – after the last decade of experimentation and market adaptation in large pharma organizational structure, this flexible and open approach seems to me an ideal model for most efficiently achieving excellence and success in development of cutting-edge new therapies that one day could help improve the lives of patients.

By Andrew Parsons, Ph.D., Vice President and Head of Preclinical Drug Development at ceedd

It goes without saying: getting a promising target through to clinical proof of concept isn’t easy. There are so many variables to consider, each with incredibly high stakes for the potential drug. One wrong turn, one caveat not thought through, and you could lose months, if not years off of your timeline. Learning from mistakes is costly. Sometimes, for the life of a molecule and the biotech venture that depends on that molecule’s success, it can be disastrous.

Finding and surrounding yourself with the expertise that can help you avoid those misjudgments is imperative, but the process of finding the right experts to work with can be time consuming and expensive.

That’s where GSK’s Scinovo can help. For companies that partner with GSK’s Centre of Excellence for External Drug Development (ceedd), they have access to drug development experts, the full suite of scientific and technical expertise and global preferred suppliers used by GSK through Scinovo. GSK formed Scinovo in 2009 as an internal operating unit, which serves as the central hub of GSK’s non-clinical development activities. Through collaboration with the ceedd, even the smallest startups have access to the brains and brawn of one of the world’s largest pharmaceutical companies. While that kind of access is provided at no additional cost to the alliance, the solutions it provides can be priceless.

To reach clinical proof of concept, each company needs to reach certain milestones along the way. But there are lots of different paths you can take to reach each milestone. With access to our range of experts, alliance companies can often find a faster, better way of doing what they need to do, which benefits both GSK and the alliance company.

The process works like this: when a company signs an agreement with the ceedd, they have the option to access a range of GSK experts or services. While the expertise accessed depends on the specific needs of the company, if it’s non-clinical, Scinovo is there to help. If you’re trying to figure out how best to create a molecule that is more readily absorbed or how to design a non-clinical study protocol, Scinovo experts are there to serve as consultants. If you need to find vendors that are capable of meeting certain quality standards or who meet specific criteria, Scinovo offers GSK’s worldwide roster of pre-screened contractors and laboratory facilities. And, depending on what you require there may be options to contract the work with GSK’s internal research teams. All this is exclusively available to our alliances.

But the decision to work with Scinovo rests squarely in the hands of the alliance company. The expertise and global capacity are there if you need and want it, but it’s not required. Each alliance company retains autonomous control and responsibility over the pre-clinical development phase of their product.

So far, each ceedd alliance company has worked with Scinovo, each in different ways depending on that company’s needs. This has included Scinovo consultation resolving PK variability in animal studies through formulation strategies, applying unique expertise in the understanding of novel lesions in toxicology studies to facilitate further development of the specific molecule, enhancing a chemical synthetic route by identifying efficiencies and reducing costs of starting materials with a potential reduction in cost of goods of 50 percent and a consultation with a Scinovo expert which saved a ceedd alliance company more than $400,000 in CRO costs. These are just some of the many examples of how Scinovo has helped our alliance companies succeed.

At the end of the day, through working with ceedd and Scinovo, everybody involved wins. If our partners aren’t successful, we aren’t successful. With the expertise and resources that Scinovo can bring, we can help our partner companies effectively and efficiently navigate the non-clinical phases of drug development, helping to give them a great head start on ultimate success.

Innovation starts small – a light bulb goes off, a bell rings, a single thought rises to the top. A novel discovery produces a new way of understanding disease. An enterprising scientist envisions a new way to treat an old problem and assembles a team of entrepreneurs to test the idea and see if it can become reality.

When it comes to innovation, small is good. But small companies supported by larger ones with R&D and commercialization know how can provide a greater prospect of success. That's what the ceedd is all about.

Welcome to the ceedd of innovation. We're the online voice of the Centre of Excellence for External Drug Discovery (ceedd), founded by GSK in 2005 to help find and support biotechnology companies who are driving scientific discovery and finding new ways to treat and cure disease.

While the size and scope of GSK offers many benefits, we realized early on that innovation happens best on a smaller scale. Since then, the ceedd has been scouting the biotechnology sector, searching for new ideas and promising treatments that can make a real difference in patients' lives, by fulfilling unmet needs. Over time, we've discovered a range of exciting new companies with their fingers on the pulse of therapeutic innovation. Through risk-reward sharing collaborations, GSK has supported many of these companies, helping to foster their innovation and see their vision become a reality.

Since our founding, we've learned a lot. We've seen a lot of innovation and promising new molecules, and we've worked with our alliances to overcome some of the many barriers to success along the way. This forum is dedicated to sharing some of the insights we've gained. Our hope and intention is that these insights will help others who seek to find new ways to treat and cure disease, encouraging them along the way and helping them understand and address issues that may threaten or slow their progress.

The voices here are those of people who are at the front lines of our efforts, including members of our ceedd team and our alliance organizations. We hope our experience and successes will inspire you to keep moving toward your goal and help patients all over the world.