Finnish Pharma Cluster Vision Target Programme initiated by the

Finnish Pharma Cluster - Vision 2010 Target Programme initiated by the Finnish Pharma Cluster Malin Brännback, Pekka Hyvönen, Hannu Raunio, Maija Renko, Riitta Sutinen Technology Review 112/2001 Finnish Pharma Cluster – Vision 2010 Target Programme initiated by the Finnish Pharma Cluster Malin Brännback Pekka Hyvönen Hannu Raunio Maija Renko Riitta Sutinen Technology Review 112/2001 Helsinki 2001 Tekes – your contact for Finnish technology Tekes, the National Technology Agency of Finland, is the main financing organisation for applied and industrial R&D in Finland. Funding is granted from the state budget. Tekes’ primary objective is to promote the competitiveness of Finnish industry and the service sector by technological means. Activities aim to diversify production structures, increase productivity and exports, and create a foundation for employment and social well-being. Tekes supports applied and industrial R&D in Finland to the extent of some EUR 390 million, annually. The Tekes network in Finland and overseas offers excellent channels for cooperation with Finnish companies, universities and research institutes. Technology programmes – part of the innovation chain The technology programmes for developing innovative products and processes are an essential part of the Finnish innovation system. These programmes have proved to be an effective form of cooperation and networking for companies and the research sector. Technology programmes promote development in specific sectors of technology or industry, and the results of the research work are passed on to business systematically. The programmes also serve as excellent frameworks for international R&D cooperation. Currently, a total of about 50 extensive national technology programmes are under way. ISSN 1239-758X ISBN 952-457-041-6 Cover: LM&CO Page layout: DTPage Oy Printers: Paino-Center Oy, 2001 Foreword The biotechnology industry is the world’s fastest growing industry today, and the pharmaceutical industry comprises 90% of its economy. This report has been written in response to the rapid changes in the pharmaceutical industry that necessitate profound changes in the organisation and strategic management of the industry. The pharmaceutical industry holds the potential to become a major cornerstone for Finland’s national economy. The purpose of this target programme project has been to identify this potential in terms of both science and business and to pinpoint the key actions that are needed to concretise this potential. The purpose of the report at hand is to provide the decision makers, educators, industry and other interest groups with a clear picture of the dynamics in the pharmaceutical industry and to communicate the actions needed to support the growth of this industry in Finland. The target programme process that led to the publication of this report was first initiated in autumn 1999 by the Finnish Pharma Cluster. The Finnish Pharma Cluster has utilised the know-how of the national “Centres of Expertise Programme” to facilitate the development of the new pharma network in Finland. To carry out this target programme project, a steering committee was formed within the Pharma Cluster. The members of the steering committee are listed in Appendix I. The authors of this report and the members of the working committee of the target programme are Professor Hannu Raunio, responsible for the section on science and technology, Professor Malin Brännback, Ms. Maija Renko (M.Sc.) and Ms. Riitta Söderlund (Ph.D.), who wrote the section on business prospects, and Mr. Pekka Hyvönen (Ph.D.) and Ms. Riitta Sutinen (Ph.D.), who authored the section on education. The target programme project was managed and co-ordinated by Turku Technology Centre Ltd., Project Manager Ms. Arja Halme (M.Sc.) and CEO Mr. N. Tapani Saarinen (M.Sc.). The production of this paper was made possible by the financial support of the members of the Finnish Pharma Cluster (see Appendix II) and Tekes. In addition to the financial contributors, the authors would like to express their gratitude to those numerous executives in the Finnish pharmaceutical industry and related fields who have provided the authors with valuable insights by participating in either the surveys or the interviews conducted for this report. During the target programme project the willingness of the industry’s actors to contribute their resources for the common benefit of the whole industry was materialised in numerous ways. Some of the recommendations presented in the competitive benchmarking and strategic analysis of the Finnish pharmaceutical and biotechnology industries conducted by SAI Healthcare for the 1 Chemical Industry Federation of Finland (June 2001) are reflected in this report as well. A busy reader will find the core highlights in the executive summary, which can be covered within a brief moment. The main text is divided into three sections: Science and technology, Business prospects, and Education. The Appendices list the pertinent data and additional information. 1 Competitive benchmarking and strategic analysis of selected biotechnology and pharmaceutical clusters. A report to the Chemical Industry Federation of Finland (CIFF), June 2001. Prepared by SAI Healthcare. Vision 2010 2 The pharmaceutical industry will be the next major industrial growth area in Finland. The pharmaceutical industry holds the potential to become a major cornerstone for the national economy of high technology Finland. The foundations – high impact scientific research, traditions in high level medical care, a vigorous start-up company base, a number of established pharmaceutical companies, high quality education, and a developed venture capital market infrastructure – are already there. If properly supported, we envision that by 2010 the Finnish pharmaceutical industry will be able to • host 140 companies in the pharmaceutical and closely related industries, approximately double the number of companies today. • host ten to fifteen listed public pharmaceutical companies in addition to those already listed. • attract significant capital flow from foreign capital markets to Finland. • create at least ten new, internationally marketed new chemical entities and innovative formulations. The long research and development periods necessary to ensure the safety and efficacy of a new pharmaceutical product influence the pace at which new, marketed products emerge from company pipelines. • reach an average annual gross sales level of EUR 3 500 million (wholesale price), of which more than half, i.e. EUR 2 000 million, originates from international operations. This represents a more than five-fold increase in total gross sales from international operations, currently EUR 370 million. • employ 14 000 professionals, about double the number of professionals employed today. A large number of new jobs will be created – in addition to the existing 6700 - in the pharmaceutical and related industries that support the existing strengths of Finland as a leading high technology nation. The developments during the past decade have already proved that new jobs are created in knowledge intensive high technology industries – such as the pharmaceutical industry – and not in traditional manufacturing sectors or the like. • be a major growth area, together with other biotechnology industries, that supports the strengths of high technology Finland. The achievement of these goals, however, requires action by both the industry and the Finnish government. This report suggests a number of actions that are necessary to allow the growth of the Finnish pharmaceutical industry. These suggestions are clustered around a number of themes, of which investments in high quality education, basic scientific research, and an infrastructure that supports the development of business ideas into growth stage companies and international businesses are the most important. 2 The vision presented here is a summary of various scenarios presented by a number of executives in the Finnish pharmaceutical industry. Executive summary The purpose of the report at hand is to provide decision makers, educators, industry and other interested parties with a clear picture of the dynamics in the pharmaceutical industry and to communicate the actions needed to support the growth of this industry to become a major economic cornerstone for future high technology Finland. Finland has a long tradition in the pharmaceutical industry. During the first decades of the last century the companies in this industry were oriented towards the domestic market and concentrated on meeting Finland’s pharmaceutical needs. Research into new chemical entities in Finland started about 20 years ago and the first fruits of this work are now seen in the form of globally registered and marketed drugs. Thus, expertise in the discovery, development, manufacturing and international marketing of pharmaceutical products exists in Finland. The large number of clinical trials conducted in Finland in comparison to the small population is an indication of pharmaceutical companies’ trust in the high quality of research and medical care in our country. The Finnish pharmaceutical industry is, however, still at the beginning of the journey towards becoming a major international player. If properly supported, the pharmaceutical industry holds the potential to become a major cornerstone for Finland’s national economy. Pharmaceuticals are one of the key application areas of biotechnology solutions, medical applications accounting for over 90 per cent of current biotechnology sales in the world. The size of the world’s pharmaceutical markets grew by nearly 120 per cent from USD 153.3 billion in 3 1989 to USD 337.2 billion in 1999 . Ten-year projections suggest that the market for biotechnology products will more than triple in real terms and that medical markets will continue to account for nearly 90 per cent of sales. Thus, the pharmaceutical industry is facing a future of steady growth. Among the most important reasons that drive this market growth are the overall ageing of the population and the increasing treatment of outpatients, which is made possible through the introduction of effective drugs. Biotechnology is by far the most R&D (research and development) intensive of all major non-defence industries. Success in bio- technology industries and especially in the pharmaceutical industry is based on high quality scientific know-how. As a result of this know-how, we are likely to see more individualised therapies and drugs on the market in the future than today; the markets for these kinds of niche products are growing. Tomorrow’s consumers will also demand drugs that aim at improving quality of life rather than curing illness. The international pharmaceutical industry is currently experiencing radical changes in technology, structure, and strategy, which will reshape its entire future. The most important change drivers are • the increasing understanding of the functioning of the human body (biology) • consumer empowerment and • the emergence of truly global venture capital markets. As a result of these and a number of other major changes in the operating environment, the structures of the international pharmaceutical industry have changed radically. In addition to established pharmaceutical companies, small, research and drug discovery oriented biotechnology firms and service providers, e.g. custom manufacturing companies, are emerging every day. There are more than 2000 biotechnology organisations in the US, more than 1000 in 4 the EU, 122 in Finland , and another 1000 around the world. The various types of companies – established pharmaceutical companies, drug discovery companies (DDCs5), and pharmaceutical service providers – live in symbiosis, each needing the others. The competitive advantages of established companies and, especially, the so-called Big Pharma are concretised not only in extensive products-in-development pipelines but also, typically, through their worldwide marketing power. Because of their limited size when compared to international Big Pharma, the Finnish pharmaceutical companies of today lack these global marketing and sales forces. However, as such economies of scale that determined the success of a pharmaceutical company in the past are no longer the only source of competitive advantage today, novel network-like structures in the industry have emerged. Pharmaceutical companies and service providers 3 4 5 Data source: Gambardella A et al. Global competitiveness in pharmaceuticals – a European perspective. European Commission, 2000. http://pharmacos.eudra.org. Original source: IMS International. Data source: Finnish Bioindustries, www.finbio.net Here: Drug discovery company. In some other contexts used as an abbreviation for drug delivery company. – which vary in size from firms employing one or two experts to large companies operating internationally - sell their expertise and network flexibly with each other and academia. Companies can sell the results of their intellectual work to other network members that further develop the innovations. A drug is no longer the only tradable good in this industry – equally, and even more importantly, intellectual property and know-how are relevant merchandise. From an investor’s point of view, the pharmaceutical industry is both a great opportunity and a challenge. There will be pharmaceutical companies that succeed, and there will be those that fail. The difference will depend upon the success of the company’s basic scientific research, the company’s ability to make the critical “go” and “no go” decisions early enough for the products in development, and its capability to utilise the research in such a way that it truly benefits the end customer. The product life cycles in the pharmaceutical industry are unique when compared to any other industry because of the length of the R&D that precedes the actual product launch and, especially, because of the costly clinical trial period necessary to ensure the safety and efficacy of a new drug. Companies that are able to advance products through clinical trials and onto the marketplace will succeed over the coming years, while companies, which suffer setbacks in their research, will be hit. Since the beginning of the 1990’s, a wealth of new companies has been established in the Finnish pharmaceutical in6 dustry. In the Ernst & Young ranking of the European life sciences – the number of life sciences companies per country – Finland ranked sixth within the EU. Although we have witnessed an increase in the number of research intensive pharmaceutical companies over the last decade in Finland, there is still a large, untapped potential in the industry – a pool of knowledge that has commercial potential which has not been utilised. One of the ways to quantify this potential is to look at the country’s performance in medical science versus the scale of the pharmaceutical industry and its production. Through our study of Finland’s impact factor in medical science and the scope of pharmaceutical production in Finland we show in this report that there is a strong scientific know-how basis for further expansion of the pharmaceutical industry in Finland. To further support the development of the Finnish pharmaceutical sector, actions and co-ordination between government departments, administrations, regional economic development agencies, universities, companies and others will be required. This report offers a number of recommendations and issues for further consideration, aimed at re- moving barriers to the development of the industry. Although these recommendations derive from the context of the Finnish pharmaceutical industry, we believe that many of the same issues arise in other sectors of the knowledge driven economy, and that the recommendations would therefore apply equally there. This report suggests that the critical factors for the development of the Finnish pharmaceutical industry include: A strong science and technology base The Finnish pharmaceutical industry faces many challenges in the fields of research and development. The future prosperity of the Finnish pharmaceutical sector depends on how efficiently the major technological trends are implemented from the beginning to the end of the drug development process. This report identifies vigorous biomedical research, effective technology transfer, and networking as the key drivers that will facilitate growth of the Finnish pharmaceutical sector. Competitive international inventions can only arise from front line science. Effective networking Frequent interactions and networking between companies and researchers increase innovation and productivity because companies benefit from sharing knowledge and reduce costs by joint sourcing. Networking takes place between companies as well as between individual researchers, companies and universities, and through various kinds of technology transfer mechanisms. The USA and Finland have been found to be among the most effective nations in 7 terms of university-industry collaboration . Availability of premises, infrastructure, and services for start-ups Start-up and spin-off companies are an important mechanism for exploiting pharmaceutical research. These companies require specialised premises with leasing arrangements that are flexible enough to meet the changing needs of the companies. Spin-offs require incubators and laboratory space located close to research organisations so that scientists can continue academic work and access the laboratories easily. Incubators should provide start-up companies not only with physical premises but also with services – such as legal counselling and educational services – that these companies typically do not have in-house. 6 7 Ernst & Young (2000) Evolution. Ernst & Young’s seventh annual European life sciences report 2000. International Institute for Management Development IMD, The World Competitiveness Yearbook 1997, Lausanne, Switzerland (1997) and World Economic Forum WEF, The Global Competitiveness Report 1997, Geneva, Switzerland (1997). Entrepreneurship and business development Entrepreneurial spirit among Finns has remained low despite the fact that the Finnish environment for entrepreneurship has many distinctly positive features. Problems faced by newly established small biotechnology companies include lack of expertise in company management and marketing and reliance on only one or a few individuals – typically scientists – in corporate management. To overcome the problems caused by this imbalance, funding for commercialisation, start-up business processes, and business development should be made readily available in addition to funding for research and technology development. Today’s pharmaceutical business is truly global. The small size of all the Finnish pharmaceutical companies in international comparison puts pressure on these companies to grow. Although small size is often synonymous with flexibility, healthy growth is needed to ensure continuity of business and to increase reliability. Currently, the largest revenues in international pharmaceutical business are earned by companies that market the end products – drugs – worldwide. Thus, Finnish pharmaceutical companies should be supported in their attempts to develop a presence in international markets and in building up international marketing networks. Availability of finance, and supportive policy environment Finland has already achieved a lot in building a pharmaceutical industry based on scientific know-how in the medical and natural sciences. This positive development has been made possible through the support and co-operation of various national authorities and governmental organisations. Although public policy cannot create business clusters, governmental and municipal actions can support the creation of conditions that encourage the formation and growth of industries. The regulatory and fiscal framework should provide incentives that facilitate company formation and growth within the pharmaceutical industry. Although Finland today ranks favourably in international comparisons between countries in terms of R&D funding, constant development in the allocation of public funding and evaluation of different funding instruments is needed to keep up with the changes in the international environment. Development and strengthening of the venture capital industry is pivotal for the evolution of the Finnish pharmaceutical industry and the start-up company base. Education In the year 2000 the Finnish pharmaceutical industry employed 6700 people. In 2010 this figure will have more than doubled. Today, there is shortage of professionals in almost all fields of the industry, and the situation is worsening all the time. In the future, drug development will need more bioscientists to work alongside pharmacists and chemists. Entrepreneurial attitudes, strategic marketing and awareness of the importance of Intellectual Property Right issues are needed by all those working in pharmaceutical R&D. Graduate schools focussing on drug development must be established to provide the necessary specialists. To educate generalists, broad curricula are needed, particularly with regard to the choice of elective studies. This should be achieved with collaboration between companies, polytechnics and universities. Higher intakes are needed for training in biomedical sciences. The lack of funding that the Finnish academic institutions are facing will be fatal for the development of high technology industries in the future unless action is taken immediately to overcome this problem. Immediate actions are needed to ensure sufficient public funding for basic research and education at universities. Table of contents Foreword Vision 2010 Executive summary 1 Introduction · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 1 1.1 Definitions of terms used · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 2 1.2 The pharmaceutical industry – past, present and future · · · · · · · · · · · · · · · · · · · 3 1.2.1 Drug discovery – trends in technologies · · · · · · · · · · · · · · · · · · · · · · · · · · 3 1.2.2 Developing safe, effective, and cost-effective drugs · · · · · · · · · · · · · · · · 4 1.2.3 Strategies and structures in the international pharmaceutical industry · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 4 1.3 Structure of the report · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 6 Science and technology · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 7 2.1 The drug development process· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 7 2.1.1 A general look at the drug development process · · · · · · · · · · · · · · · · · · · 7 2.1.2 The role of basic research in drug discovery · · · · · · · · · · · · · · · · · · · · · · 8 2.1.3 Finland and the EU · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 9 2.2 Technologies in drug discovery and development · · · · · · · · · · · · · · · · · · · · · · · 9 2.2.1 Drug discovery· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 9 2.2.2 The impact of genomics on drug development· · · · · · · · · · · · · · · · · · · · 10 2.2.3 Drug target research and genomics in Finland · · · · · · · · · · · · · · · · · · · · 10 2.3 Drug candidate selection and preclinical development· · · · · · · · · · · · · · · · · · · 11 2.3.1 Candidate selection and preclinical development· · · · · · · · · · · · · · · · · · 11 2.3.2 Drug candidate selection and preclinical development technologies in Finland · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 12 2.4 Manufacturing of candidate drugs and assurance of quality · · · · · · · · · · · · · · 12 2.4.1 Manufacturing of drugs · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 12 2.4.2 Assurance of quality · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 13 2.5 Clinical studies· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 13 2.5.1 The importance of clinical studies · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 13 2.5.2 Pharmacovigilance · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 14 2.5.3 Clinical drug development in Finland · · · · · · · · · · · · · · · · · · · · · · · · · · · 14 2.6 Biotechnology drugs · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 15 2.6.1 Biotech drugs and drug production in Finland · · · · · · · · · · · · · · · · · · · · 15 2.6.2 On to the future · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 16 2.7 Conclusions · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 16 2.7.1 The importance of networking· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 17 2.7.2 National core facilities and centres · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 17 2.7.3 The importance of basic biomedical research · · · · · · · · · · · · · · · · · · · · 17 2.7.4 The importance of bioinformatics and IT· · · · · · · · · · · · · · · · · · · · · · · · · 18 Business prospects · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 19 3.1 The drug development process – business considerations · · · · · · · · · · · · · · · 19 3.2 Future business potential of the Finnish pharmaceutical industry · · · · · · · · · · 20 2 3 3.3 3.4 4 Vigorous and growing Finnish pharmaceutical cluster · · · · · · · · · · · · · · · · · · · 23 3.3.1 Established pharmaceutical companies · · · · · · · · · · · · · · · · · · · · · · · · · 24 3.3.2 New business strategies · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 24 3.3.3 Related and supporting industries · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 27 3.3.4 SWOT · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 28 Conclusions on business prospects · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 28 Education · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 33 4.1 Background to education in the Finnish pharmaceutical field · · · · · · · · · · · · · 33 4.1.1 Personnel structure and educational background in the Finnish pharmaceutical industry · · · · · · · · · · · · · · · · · · · · · · · · · · 33 4.1.2 Competition for qualified personnel getting tougher· · · · · · · · · · · · · · · · 35 4.1.3 Ongoing reforms and topics of debate and their influence on education · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 35 4.1.4 Survey undertaken for this report · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 38 4.2 The gap between current education and industrial needs · · · · · · · · · · · · · · · · 38 4.2.1 What kind of knowledge and skills are needed in pharmaceutical development? · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 38 4.2.2 What professionals are we short of today? · · · · · · · · · · · · · · · · · · · · · · · 39 4.2.3 How well does current education meet the needs of the pharmaceutical industry? · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 40 4.3 Future training needs in the pharmaceutical industry · · · · · · · · · · · · · · · · · · · · 41 4.3.1 How many professionals do we need? · · · · · · · · · · · · · · · · · · · · · · · · · · 41 4.3.2 What kind of professionals do we need more of?· · · · · · · · · · · · · · · · · · 41 4.3.3 Extrapolation of the changing needs to the next decade · · · · · · · · · · · · 42 4.4 Conclusions on education · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 43 Conclusions · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 45 5.1 Recommendations· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 46 5.1.1 Enhancing the networks · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 46 5.1.2 Space to expand · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 46 5.1.3 Entrepreneurship · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 46 5.1.4 Business development · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 47 5.1.5 Funding · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 47 5.1.6 National innovation support policies · · · · · · · · · · · · · · · · · · · · · · · · · · · · 47 5.1.7 Education· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 47 Appendix I Members of the steering committee of the Target Programme · · · · · · · 49 Appendix II Financial contributors · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 51 Appendix III Glossary· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 53 Appendix IV List of Science Parks and Centres of Expertise · · · · · · · · · · · · · · · · · · · 57 Appendix V Members of Pharma Cluster · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 61 Technology Reviews from Tekes · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 65 5 1 Introduction The purpose of this report is to provide decision makers, educators, industry and other interested parties with a clear picture of the dynamics in the pharmaceutical industry and to communicate the actions needed to support the growth of this industry and enable it to become a major economic cornerstone for future high technology Finland. The report provides a vision of the future of the Finnish pharmaceutical industry. This vision can only be created by analysing the past and the current state of the industry in the context of the global pharmaceutical industry. Through this analysis the report justifies and legitimises the necessary allocation of resources – human, technological, and financial – and enables the pursuit of the vision by setting out key recommendations for critical actions needed by public and private stakeholders. Below is one Finnish success story. What specific actions are needed to give us more success stories like this in the near future? This is the question which this report will answer through a thorough analysis of technology, business, and education. Comtess is one example of a commercially viable drug that was discovered and developed within a Finnish pharmaceutical company. There are a few other examples (See Table 1), such as Mirena from Leiras. The key question is whether we want to see more of these in the future? Comtess – A Finnish Success Story In September 1998, entacapone, a drug used for the treatment of Parkinson’s disease, acquired marketing authorisation within the EU, a year later in the US. Entacapone was the result of twelve years of joint R&D efforts by researchers at Orion Pharma and academic institutions. Today, entacapone – sold under the trade name Comtess – is a global seller. Entacapone is the result of basic research on neurodegenerative diseases, involving the use of sophisticated technologies to elucidate its special features. Orion Pharma has made a partnership agreement with the Swiss pharmaceutical giant Novartis AG for the international marketing of the product. Orion markets Comtess in some European countries through its own marketing and distribution network, while Novartis AG sells the drug as Comtan in the US and elsewhere. Net sales for the year 2000 totalled EUR 52.5 million (in 1999, EUR 30.6 million). Successful launching of Comtess has provided Orion Pharma with a strong platform to pursue research on more selective and effective molecules in this and other therapeutic categories. Table 1. Internationally marketed New Chemical Entities and innovative formulations. Product category New Chemical Entities (human) Product name Fareston (toremifene), treatment of breast cancer Comtess (entacapone), treatment of Parkinson’s disease, an adjunct to levodopa Simdax (levosimendan), short-term intravenous treatment of acutely decompensated heart failure Precedex (dexmedetomidine), sedation in intensive care New Chemical Entities (veterinary) Innovative formulations Other New Chemical Entities mainly developed in Finland Domitor, sedative for small animals; Domosedan, sedative for large animals; Antisedan, reversal of Domitor and Domosedan–induced sedation Levonova/Mirena, intrauterine contraceptive system Bonefos (clodronate), adjuvant cancer therapy Eldepryl (selegiline), Parkinson’s disease Company Orion Pharma Orion Pharma Orion Pharma Orion Pharma Orion Pharma Leiras Leiras Orion Pharma 1 1.1 Definitions of terms used If you break biotechnology into its root words you have “bio” – the use of biological processes – and “technology” – to solve problems or make useful products. The definition of biotechnology given by the OECD is as follows: “The application of science and technology to living organisms as well as parts, products and models thereof, to alter living or non-living materials for the production of knowledge, goods and services”. The biotechnology industry is fragmented, and the pharmaceutical industry is one of the core industries exploiting biotechnology. The pharmaceutical industry includes companies undertaking research, development and the manufacture of medicinal products. It is extremely difficult to draw a clear line between the pharmaceutical industry and other industries classed as belonging to the biotechnology sector because the links between the pharmaceutical and various other biotechnology industries are extremely strong, especially in science and R&D. According to Oliver’s book “The Coming Biotech Age” (2000), for example, market activity for biotechnology solutions is highly concentrated in medical applications, which account for over 90 per cent of current biotechnology sales. Ten-year projections suggest that the market for biotech products will more than triple in real terms and that medical markets will continue to account for nearly 90 per cent of sales. This is why the data provided in this report cover both the biotechnology industry and the pharmaceutical industry, the focus being on pharmaceutical industry. The developments in these two fields are closely interrelated, and it is impossible to describe one without taking into account the developments in the other. Figure 1 was compiled to give the reader a picture of the pharmaceutical and biotechnology industries. The figure illustrates the main categories of activity that currently drive the growth of the pharmaceutical industry as a part of the wider biotechnology landscape. On the left hand side of the figure, the key areas of scientific progress are shown. On the right hand side, the ultimate application areas of this increasing knowledge are listed. The needs of the final consumers and patients stem from their need to improve quality of life by preventing and fighting medical problems. The “tools” needed for the application of increasing scientific knowledge to actual medical problems are listed in the middle of the figure. Scientific advances Genomics and proteomics Enablers: Bioelectronics, bioinformatics, biochemicals l Biochips l Biosensors l Laboratory hardware and wetware like reagents Final application areas Better quality of life Increasing number of known targets Application in: Medical treatment, biomaterials, diagnostics, agriculture, food, environment l Medicines l ”Human spareparts” l Diagnostic toolkits l Herbicide tolerant crops l Functional food l Bioremediation Prevention of and cures for illnesses Figure 1. The biotechnology landscape. 2 In addition to the terms biotechnology industry/industries and pharmaceutical industry, another term used in this report as well as in other contexts to refer to the use of biotechnology in enhancing human health is life sciences / life sciences industry. The life sciences sector comprises other fields in addition to biotechnology. The term “life sciences” actually refers to the development and use of health care related products and services in any industry. In this report, the word pharmaceutical company refers to both established pharmaceutical companies that conduct pharmaceutical research, develop, manufacture, and market pharmaceutical products, and drug discovery companies that conduct pharmaceutical research and/or develop pharmaceutical products, but do not manufacture and market them. In the context of this report, the words Finnish pharmaceutical industry and Finnish pharmaceutical cluster are used interchangeably. per cent in rheumatic fever and rheumatic heart disease, and by 72 per cent in ulcers of the stomach and duodenum. Despite these successes many diseases remain without a cure. The absence of a cure generates huge costs for society, for example in terms of inability to work and hospitalisation costs. The demographic structures of all Western countries indicate that these costs will continue to increase, and at a growing rate. Each day 10,000 more Americans turn 50, and by 2025 more than 30 per cent of the US population will be over 55 years. 1.2.1 Drug discovery – trends in technologies The pharmaceutical industry – like all the biotechnology industries – is a high technology industry. There are two indicators which define an industry as high technology: R&D spending and patent approvals. Biotechnology is by far the most R&D intensive of all major non-defence industries. On average, biotechnology companies8 spent USD 69,000 per employee on R&D in 1995, compared to USD 7,651 for all corporations. In 1998 the European pharmaceutical industry invested over EUR 14,200 million in R&D; the respective figure for the Finnish pharmaceutical industry in 1999 totalled EUR 144 million. The number of patent approvals is a reasonably good quantitative indicator of the increase in commercially useful knowledge. Patents are only a proxy for new knowledge, but the best one available. The US Patent and Trademark Office publishes data on the number of patent approvals for over 250 technology categories. The numbers of patents in the four major areas of biotechnological innovation are shown in Figure 2. The major driver of pharmaceutical research over the next few years is expected to be the increase in the number of known drug targets . Currently, all the drugs on the market target fewer than 500 human molecules. Scientists predict that the sequencing of the human genome will increase this number to several thousand, sparking a boom in genomic research in the pharmaceutical industry. Humans are made up of about 30,000 to 40,000 genes, considerably fewer than earlier estimates of 60,000 to 100,000 genes, and only about twice as many as the fruit fly. However, the gene maps are just the beginning. The future lies not so much in the genes controlling the production of proteins that make up people, but in understanding the proteins themselves – a new scientific field known as proteomics. The terms “drug”, “medicine”, “medicinal product”, and “pharmaceutical” are used interchangeably to refer to • Any substance or combination of substances presented for treating or preventing disease in human beings or animals. • Any substance or combination of substances which may be administered to human beings or animals with a view to making a medical diagnosis or to restoring, correcting or modifying physiological functions in human beings or in animals is likewise considered a medicinal product. (Definition of a medicinal product in Article 1 in Council Directive 65/65/EEC.) For a comprehensive glossary of the terms used in this report see Appendix III. 1.2 The pharmaceutical industry – past, present and future New medicines have the potential to save lives and improve quality of life for millions of people. For example, global developments from 1965–1996 show that fatality rates have dropped by 74 per cent in atherosclerosis, by 83 8 The data presented here concern primarily the US, but there is no reason to believe the figures to be any smaller in other parts of the world. Data source: Oliver 2000. 3 10 000 8 000 6 000 4 000 2 000 0 1977 1982 Drugs Multicellular organisms Total 1987 1992 Microbiology Recombinant DNA 1997 Figure 2. Growth of biotech patents approval. 1.2.2 Developing safe, effective, and cost-effective drugs The pharmaceutical industry possesses some structurally unique characteristics, with an exceptionally long and high-cost research and development (R&D) process needed to ensure the safety and efficacy of a new drug. The R&D process of a drug takes, on average, 10–12 years, generating an estimated USD 500 million of total cost9. Because this figure contains all the infrastructure and capital costs, the actual direct cost for a successful drug development project is, however, much lower, and also highly variable between products. Increasingly, the whole pharmaceutical discovery and development process no longer takes place within the borders of one company. Instead, various parts of the development process – each of which requires specific skills and knowledge – are conducted by specialised companies that base their businesses on narrow core competencies. The long time periods typical for pharmaceutical product development result from the need to ensure the safety and efficacy of any drug that reaches the market. Consequently, the cost of a medicine is not simply the cost of its ingredients. Like other products that result from research and creativity, medicines are really made of knowledge that prevents and cures disease and relieves suffering. Pharmaceutical companies fund research on future medicines with revenues from medicines on the market. According to the Pharmaceutical Research and Manufacturers of America (PhRMA) one out of every five dollars of revenue is poured back into research and development. The tightening budgets of national health authorities affect the marketing and distribution of medicines. The already 9 significant role of pharmacoeconomics – a branch of economics that applies cost-benefit, cost-effectiveness, costminimisation, and cost-utility analyses to compare the economics of different pharmaceutical products or to compare drug therapy to other treatments – will become even stronger. In the future even more than today the regulatory bodies will co-operate closely with pharmaceutical companies at all stages of development to assure the rapid public availability of safe medicines. From an investor’s point of view, the pharmaceutical industry is both a great opportunity and a challenge. There will be pharmaceutical companies that succeed, and there will be those that fail. The difference will depend upon the success of the company’s basic scientific research, the company’s ability to make the critical “go” and “no go” decisions early enough for the products in development, and its capability to utilise the research in such a way that it truly benefits the end consumer. Companies that are able to advance products through clinical trials and onto the marketplace will succeed over the coming years, while companies which suffer setbacks in their research will be hit. 1.2.3 Strategies and structures in the international pharmaceutical industry Due to scientific advances, the international pharmaceutical industry is currently experiencing radical changes in technology, structure, and strategy, which will reshape its entire future. The most significant sign of structural change within the global pharmaceutical industry is the increase in mergers and acquisitions (M&A) and collaboration through alliances and joint ventures. Source: Efpia, www.efpia.org. 4 The size of the world’s pharmaceutical markets grew by nearly 120 per cent from USD 153.3 billion in 1989 to USD 10 337.2 billion in 1999 . Ten-year projections suggest that the market for biotechnology products will more than triple in real terms and that medical markets will continue to account for nearly 90 per cent of sales. Thus, the pharmaceutical industry is facing a future of steady growth. Other sectors will be impacted by the biotechnology revolution, the major ones being health care, chemicals, food processing, agriculture, mining, and environmental remediation. As a result of mergers and acquisitions between the largest companies, the number of Big Pharma11 companies in the world has been decreasing and is expected to decrease even further in the next few years. Along with Big Pharma small biotechnology firms are emerging. There are more than 2000 biotechnology organisations in the US, more than 1000 in the EU, 122 in Finland12, and another 1000 around the world. Market capitalisation of the European biotechnology industry increased 66 per cent during 1999 from EUR 10.7 billion at the end of 1998 to EUR 17.8 billion at the end of 199913. During the period from 1994 to 1999 the numbers of mergers and acquisitions (M&As) in the international pharmaceutical industry have steadily grown. Generally there are a variety of reasons for M&A, which are no different from those in other industries. Boosting research and development (R&D) productivity as well as increased market access effectiveness and efficiency are the most common. Within a few years a large number of blockbuster drugs will go off-patent and there are not enough drugs in the R&D pipelines of major pharmaceutical companies to replace them. The various types of pharmaceutical companies – Big Pharma, Midsize Pharma, Drug Discovery Companies, and pharmaceutical service providers – live in symbiosis, each needing the others. Today’s pharmaceutical companies network flexibly with each other and academia for co-operative gains. Companies can sell the results of their intellectual work to other network members who further develop the innovations. A drug is no longer the only tradable good in this industry – equally, and even more importantly, intellectual property and know-how are relevant merchandise. Large pharmaceutical companies expect in-licensed products to generate an ever-larger share of their business, in some cases even as much as half. Of the 1998 list of 55 blockbuster drugs – drugs with an annual revenue of more 10 11 12 13 14 than USD 500 million – marketed by the ten largest pharmaceutical companies, 14 were licensed from external 14 sources . In-licensing, strategic partnering, and acquiring of biotechnology companies can help large pharmaceutical firms to exploit innovations in biotechnology and to supply their large sales and marketing forces with a wider range of new products. In pharmaceutical licensing agreements royalties represent the main profit-sharing mechanism that operates once the product is on the market. Royalties are usually paid on the net sales value and reflect the risk/reward ratio between licensor and licensee. Although the royalties and upfront and milestone payments usually vary between individual licensing agreements, it has been estimated that the marketer of a drug gets around 60–70% of the product’s sales revenues whereas the licensor’s share is somewhere between ten and forty per cent. Today’s pharmaceutical industry is truly global. The globalisation of pharmaceutical business has created a business environment where technological superiority alone is no guarantee of global business success. Success calls for sound business knowledge and skills. Marketing excellence in this industry is strategically as important as R&D excellence. Over the last few years, the pharmaceutical sector’s centre of gravity has been progressively but steadily shifting from Europe to the US, essentially because business prospects, incentives for innovation, the regulatory framework, and public attitudes towards new technologies are less favourable in Europe than in the US. Figure 3 describes the dominance of the US over Europe in pharmaceutical R&D. In addition to the US-Europe division presented above, a number of other growth areas present interesting opportunities for the research based pharmaceutical industry. The innovation potential of many of the fast developing East Asian and South American countries, for example, has remained untapped. Furthermore, these areas are typically densely populated, and continuous economic growth can turn these regions into important markets for pharmaceutical companies. So far, however, unstable economic conditions and deficiencies in patent legislation and enforcement have kept research based pharmaceutical industry away from these regions. The above general description of the trends in the pharmaceutical industry in the global context forms the starting point of this report. The remainder of the report will focus on the Finnish pharmaceutical industry, its roots, its pres- Data source: Gambardella A et al. Global competitiveness in pharmaceuticals – a European perspective. European Commission, 2000. http://pharmacos.eudra.org. Original source: IMS International. Here: established pharmaceutical companies with a global market share of more than one per cent of total world pharmaceutical market. Data source: Finnish Bioindustries, www.finbio.net Ernst & Young (2000) Evolution. Ernst & Young’s seventh annual European life sciences report 2000. Source: Ernst &Young (1999) Ernst & Young’s European Life Sciences 99, Sixth Annual Report, Communicating Value. Ernst&Young International, London, UK. 5 Pharmaceutical R&D expenditure in Europe and in the US 20 000 18 000 16 000 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 EUR Millions Europe USA 1990 1995 1999 Year Figure 3. The US vs. the European pharmaceutical industry. Data source: EFPIA Annual Report – 1999–2000 The Year in Review. ent situation, and its future prospects. Finland stands every chance of being one of the forerunners in the future global pharmaceutical and biotechnology industry. However, this will certainly not happen without effective and efficient allocation of resources – human and financial – to enable creation of the technological and business excellence required for the development of a sustainable competitive advantage. troduces emerging technologies that are changing the way new medicines are made. In Chapter 3 the business prospects of the Finnish pharmaceutical industry are analysed. Through an analysis of the current state of the companies in the industry and through the identification of their strengths, weaknesses, opportunities and threats the key areas for development are identified. An analysis is made of how the excellent science base in medical sciences in Finland can be turned into business success. Chapter 4 focuses on educational issues. Based on an analysis of the gap between currently available education and the actual needs of the pharmaceutical companies, suggestions are made on how to further develop education in Finland to respond to the needs of pharmaceutical companies. In Chapter 5 general conclusions are presented and, finally, Chapter 5.1 presents the recommendations that arise from the discussions in the preceding chapters. 1.3 Structure of the report In the introduction, the major trends in the international pharmaceutical industry have been identified. In the following chapters, the emphasis will be on the Finnish pharmaceutical industry. In Chapter 2 the science and technology base of the pharmaceutical industry is described. The chapter describes the basic elements of drug discovery and development and in- 6 2 Science and technology This chapter describes the basic elements of drug discovery and development and introduces emerging technologies that are changing the way new medicines are developed. An analysis is made of how the Finnish pharmaceutical industry, together with research institutions, can succeed in the technological race towards making better medicines. The drug development process has become highly complex and many new technologies are being applied simultaneously, especially in the early phases of drug discovery. The new technologies that have the greatest impact on the entire drug development process are genomic sciences and bioinformatics. The recent sequencing of the whole human genome and the advent of powerful functional genomic techniques will lead to an understanding of the mechanisms of disease and the identification of new targets for drugs. In the near future it will be possible to “individualise” drug therapy based on an analysis of the genetic make-up of the patient. Information technology and bioinformatics provide tools to manage the whole spectrum of the drug development process much more efficiently. The Finnish pharmaceutical industry is going through a period of rapid transition from the production of generic drugs to innovative discovery and development of novel (proprietary) pharmaceuticals. The major pharmaceutical companies in Finland (Orion Pharma, Leiras, and Santen) have in-house programmes for drug discovery, development, production and marketing, while several smaller start-up companies specialise in drug discovery stemming from basic scientific work. The importance of networking between universities, other research institutions, and pharmaceutical companies is emphasised. Stronger links between industry, academia, hospitals and regulatory authorities are vital to the development and application of more efficient technologies so as to increase the capacity and speed of drug development, and ensure better training of scientists, doctors and regulators. The biotechnology industry concentrates on areas where strong research institutions are located. The presence of core facilities, offering individual scientists and teams access to complex and expensive equipment and services, is today regarded as an integral part of biomedical research institutions. It is very likely that the Finnish pharmaceutical sector will prosper in the next 10 years or so, provided that the basic building blocks – vigorous biomedical basic research, smooth technology transfer (basic to applied research to products and services), efficient networking between the different parties, and fast exchange and dissemination of information in the field – are in place and working efficiently. 2.1 The drug development process 2.1.1 A general look at the drug development process It has been said that drugs and the improved quality of health they bring to people are “miracles of modern sci15 ence .” The process of discovering and developing new drugs includes some of the most exciting areas of scientific discovery today. This process runs from basic biomedical investigation of living cells and molecules to applied research that yields new drugs to improve health care. The research process is complicated, time-consuming and costly, and its end result cannot be known at the outset. 15 Drug development is ideally a logical, stepwise procedure, in which information from small early studies is used to support and plan subsequent larger, more definitive studies. The whole drug development process in very complex, and many scientific disciplines are engaged in it. Traditional organic chemists, physiologists and statisticians have been joined in recent years by new kinds of specialists. Biochemists study the chemistry of life processes. Molecular biologists study the molecules that make up living matter. Toxicologists investigate chemicals’ potential for harm. Pharmacologists look at how drugs work. And computer scientists apply the power of their sophisticated machines to analyse and assess new chemicals. Each provides a different way of looking for new drugs. Finally, new drug candidates must be extensively tested in people to find out their real effects on human beings. Sometimes thousands of chemical compounds must be made and tested to find From test tube to patient. FDA Consumer Special Issue. www.fda.gov/cder 7 one that can achieve the desirable result without serious side effects. Such a complicated process costs vast amounts of time and money. It is estimated that it takes about 10 years to study and test a new drug before a regulatory agency can approve it for the general public. This includes early laboratory and animal testing, as well as later clinical trials in human subjects. For every 5000 drug candidates initially evaluated, only five are tested in humans, and only one of these is approved for patient use. The overall drug development process and a list of some key technologies used at different phases of the process are illustrated in Figure 4. It should be emphasised that the whole drug development process takes much longer than generating a product in any other high technology area. In its efforts to make crucial improvements in R&D productivity, the pharmaceutical industry is in the process of adopting three related approaches: 1. “Industrialisation” of the drug development process (drug discovery and development will become highly systematic and complex) 2. Application of genomics and genetics to drug discovery and development 3. Application of information technology at every level of drug discovery and development. Making drugs has become so complex that it is no longer carried out by the pharmaceutical industry alone. Drug discovery and further development today need a diversified and flexible base, composed of private companies, public research institutions, and various organisations pursuing the transfer of technology stemming from basic science to commercial products. 2.1.2 The role of basic research in drug discovery New drug targets ultimately stem from basic research, although the line between basic and applied research is being blurred by the rapid development in life science technologies. It is increasingly difficult nowadays to make the distinction between basic and applied research in individual research projects or in consortia involving several projects. Many of these projects now involve both types of work. In drug development, the trend is clearly towards more interaction between basic and applied research, with private firms both stemming from this environment and contributing to the generation of more potential drug targets through research. According to a recent survey conducted by the Academy of Finland16, universities and scientific research are key elements of the science system and an integral part of the national innovation system. The hard core of the science system consists of universities and research institutes, but it also comprises companies with R&D operations, as well as government organisations responsible for science and technology policy. The innovation system additionally comprises business and industry in general, as well as all Drug development process Discovery (2-10 Years) Technologies Drug target selection Computer-aided modelling Genomics, proteomics Combinatorial chemistry High-throughput screening Gene-manipulated organisms In vitro assays, cell cultures In vivo systems Preformulation Synthesis scale-up Biostatistics Bioinformatics Drug bioanalysis methods Data capture and management Computer-aided modelling Clinical trial simulation Electronic dossier submission Preclinical Preclinical testing Laboratory and animal testing Phase I 20-80 healthy volunteers used to determine safety and dosage Clinical Phase III Up to 10 000 patients studied for efficacy and risk/benefit analysis Phase II 100-300 patients used to look for efficacy and adverse effects Regulatory Review/Approval Years 0 Years 2 4 6 8 Phase IV, additional Postmarketing Testing 10 12 14 Figure 4. The drug development process and some key technologies used at different phases of the process. 16 The State and Quality of Scientific Research in Finland; A Review of Scientific Research and its Environment in the late 1990s. Edited by Kai Husso, Sakari Karjalainen & Tuomas Parkkari. Academy of Finland 2000. www.aka.fi 8 the economic structures, political organisations and institutions that have an impact on research. During the 1990s, science and innovation systems in all OECD countries have come under mounting economic and social pressures to change, mainly with respect to their performance, efficiency and impact. The same survey shows that the number and quality of scientific publications is rising in Finland. In 1999, Finnish researchers published almost 7,000 papers, which was twice as many as in 1986. Out of all these scientific publications in Finland, a very high proportion was in the fields of the medical and natural sciences (combined 87% of all publications). For comparison, the proportion of engineering and technology publications was only 6%. Thus, there seems to be an inverse relationship between publishing activity and economic impact between these fields. In addition, Finns published 39 per cent more papers in the field of medical science than the world average, reflecting the high level of research activity in this field. These figures show that there is a very strong scientific basis on which the Finnish pharmaceutical and biotechnology industry can build in the near future. (For more discussion on this topic, see Chapter 3.2) A recent OECD report on the associations between science and technology and production and employment identifies a number of strengths in the Finnish system: the administration of the scientific base, the economic resources invested in research, co-operation between universities and the business sector and the development and application of technology. All of these components will be needed to achieve a vigorous pharmaceutical industry in Finland. 17 coming 6th Research and Technology Development frame18 work programme of the European Union . The suggested key action has three main objectives: • To seek new technology capable of more effective selection of potential drug candidates for innovative medicines while accommodating safety demands • To use such technology to increase the capacity of and speed up the pharmaceutical development process and eliminate bottlenecks • To cultivate a pan-European interdisciplinary network that bridges the gap between industry, academia and regulatory authorities. Pharmaceutical research combining new technologies is expected to be a driving force for economic development in Europe. Research activities in the pharmaceutical industry, combined with new information technology, will be the driving force behind the development of a new cycle of the industrial revolution. 2.2 Technologies in drug discovery and development 2.2.1 Drug discovery The drug discovery phase involves all the research activities aimed at the identification of a compound with a desired pharmacological activity. There is no standard route by which the drugs now sold were discovered. In some cases, a pharmaceutical company decides to develop a new drug for a specific disease. In others, company scientists may be free to pursue an interesting line of research. Nowadays, new findings from universities or other research institutions often point the way for drug companies to follow in their own research. The process typically combines elements of all three avenues. New drug research starts by studying how the body functions, both normally and abnormally, at its most basic levels. Will a chemical that changes the functioning of the body be a useful drug? This, in turn, leads to the concept of how a drug might be used to prevent, cure or treat a disease. Once the concept has been developed, the researcher has a target to aim for. Thus, target identification and validation are the starting points of a drug development programme. Disease processes are complex and involve a sequence of events. If one wants to intervene in the disease process, it needs to be broken down into its component parts. These 2.1.3 Finland and the EU Since Finland is a member of the EU, the domestic pharmaceutical industry will be intimately affected by all the developments in the EU context. Many indicators show that Europe and the USA are now equal as regards the numbers of biotechnology companies and start-ups. Despite this, the European pharmaceutical industry will face many threats in the years ahead and is in danger of losing ground on global markets. A change in the way new drugs are discovered and developed appears necessary for the continued success of the European pharmaceutical industry. The European Federation for Pharmaceutical Sciences (EUFEPS), the European Federation of Pharmaceutical Industries and Associations (EFPIA) and the Danish Medicines Agency have taken a first step by proposing a key action entitled “New Safe Medicines Faster” for the forth17 18 OECD Science, Technology and Industry Scoreboard 1999. Benchmarking Knowledge-based Economies (1999). OECD, Paris, 1999. EUFEPS, New Safe Medicines Faster. Proposal for research topics, methodologies, techniques and other means of promoting the drug development process to the benefit of the European citizens. Report 2000. www.eufeps.org 9 parts are then analysed to find out what abnormal events are occurring at the cellular and molecular levels. Then a particular step is selected as a target for drug development with the aim of correcting the cellular or molecular dysfunction. A more high-tech approach is to use computers to simulate an enzyme or other drug target and to design chemical structures that might act against it. Enzymes work when they attach to the correct site on cell membrane. A computer can show scientists what the receptor site looks like and how one might tailor a compound to stop an enzyme from attaching there. Computers give chemists clues as to what kinds of compounds to make. A compound made by computer-aided design still has to be put into a biological system to see if it works. new drug targets. Currently about 500 drug targets are known, but knowledge of the complete set of human genes and proteins will greatly increase this number. Although only a minority of human genes may be drug targets, it has been predicted that the number will exceed several thousand. This prospect has led to a massive expansion of genomic research in drug development. A new discipline, pharmacogenomics, will make it possible to select individuals who are more likely than others to respond to drug treatment, and also to find those individuals who might have adverse reactions to treatment by certain drugs. Pharmacogenomics technology will also help us to define and conduct clinical trials more precisely. Thus it will be possible in the near future to “individualise” drug therapy based on an analysis of the patient’s genetic make-up. With microarray or DNA chip technologies, gene expression in an organism can be examined much faster than with traditional methods. To use chip technology, researchers place fragments of different DNA samples on a glass slide in a grid of very high density. They expose the slide to labelled test DNA, which combines with the DNA on the glass slide, and then analyse the amount of combined DNA in each spot on the slide. With these techniques we can study, for instance, the effects of a drug on the level of expression of many genes. The bioinformatics underlying the management of these huge volumes of data are crucial if any sense is to be made of gene expression experiments. A single microarray experiment looking at 40,000 genes from 10 different samples, under 20 different conditions, produces at least 8,000,000 pieces of information20. The total DNA chip market in the USA was USD 288 million in 200021. The largest international pharmaceutical companies already use chip technology in drug development. Each of the large established companies is now investing heavily in genomics and chip technology. The research is now primarily in the preclinical development phase, but this technology will soon be entering clinical testing. 2.2.2 The impact of genomics on drug development A change in the way new drugs are discovered and developed appears necessary for the continued success of the pharmaceutical industry. The very rapid progress made in the genomic sciences and the recent availability of the human genome sequence are revolutionising the way new drugs are made19. The genome consists of the entire DNA in an organism. Thus, the human genome contains all our hereditary information. Genomics, in turn, can be simply defined as the study of genes and their function. Since all the biological functions of genes are carried out by the proteins they encode, a new research area called proteomics has also emerged. The proteome is the total protein profile of a cell or tissue at a given time, and proteomics is the systematic analysis of protein profiles of healthy and diseased tissues. The potential of the genomic sciences for medicine and drug development is fourfold: 1. Gene alterations that cause diseases will be found. 2. Diagnosis and prevention of diseases will become more accurate and effective. 3. Many new drug targets will be discovered. 4. It will be possible to relate certain genotypes to beneficial and adverse responses to drugs, permitting individualised drug therapy. Higher quality drug targets, the ability to eliminate compounds at earlier stages in the overall process, and improvements in the selection of clinical trial populations might allow significant improvements in both the time and the cost of drug discovery and development. Each of these factors can be addressed by genomics. The pharmaceutical industry will, particularly, exploit the chance to discover 19 20 21 2.2.3 Drug target research and genomics in Finland It must be stressed that sequencing of the human genome is just the beginning, and that the next big step will be to understand what the sequence actually means. What are the gene products? How do they function? How do they interact? How can we manipulate their function to create new medicines? Finding answers to these questions will keep The human genome. Nature special issue no. 6822, Volume 409, 2001. www.nature.com Brazma A et al, One-stop shop for microarray data. Nature 403, 699-700, 2000. U.S. Microarray/DNA-Chip Industry 2000-2010. Fuji-Keizai USA Report, 2000. 10 the scientific community in Finland and elsewhere very busy in the foreseeable future. Basic research in the field of the genomic sciences is of high quality in Finland. The infrastructure and know-how created in this process can be utilised in applied research, including novel drug discovery and pharmacogenomics research. Figure 8 illustrates these main building blocks of genomics research in Finland. Most experts agree that new genomic information and techniques will reshape the way new drugs are made. Due to the very complex nature of genomic science and applications, consolidated efforts are needed to ensure that high quality genomics technology application and research are carried out in Finland. It should also be kept in mind that it will be another 5–10 years before drugs that have been developed on the basis of human genome sequence information are on the market. There are already some centres that consolidate genomic research, such as the Finnish Genome Centre, and others are being established (e.g. Turku Centre of Functional Genomics). Both the Finnish Academy of Sciences and Tekes have significantly funded basic research in this area through targeted programmes. The DNA chip technique is a good example of a novel technology that requires extensive investment and knowhow before being applicable for drug development purposes. The best solution for Finland is to operate chip technology in a partially centralised fashion, with core facilities where the most expensive hardware and human expertise can be concentrated. The Turku Centre of Functional Genomics already provides DNA chip printing and analysis equipment and serves as a national core centre in this respect. 2.3 Drug candidate selection and preclinical development 2.3.1 Candidate selection and preclinical development Many new techniques have been introduced to speed up selection of the compounds that are most likely to become drugs. Combinatorial chemistry is a technology for creating large numbers of molecules. It uses a mix of computer software, chemistry, molecular biology and automated technology to synthesise thousands of molecules in days. Various high throughput screening (HTS) methods have greatly increased the speed of selection of effective molecules. In HTS, large numbers of molecules are screened for activity against the chosen biological target (for example a receptor or an enzyme). An approach of this type can involve the study of many thousands of compounds. It is becoming increasingly common for research companies to screen chemical libraries of over 1,000,000 proprietary compounds. Such massive screening may, however, only result in a handful of molecules with the properties chosen for the screen. Up to this point, the search for the new drug has been confined to a laboratory test tube. Next, those compounds that have shown at least some desired effects have to be tested in living animals. Animal testing is typically performed in two or more species, since a drug may affect one species differently from another. Such tests show whether a potential drug has toxic side effects and how safe it is at different doses. The results pave the way for human testing. So far, the research has been aimed at discovering what the drug does to the body. Now, it must also find out what the body does to the drug. Therefore, in animal testing, scientists measure how much of a drug is absorbed into the blood, how it is broken down chemically in the body, the toxicity of its breakdown products (metabolites), and how quickly the drug and its metabolites are excreted from the body. Sometimes such tests find a metabolite that is more effective than the drug originally picked for development. These studies are often referred to as ADME (Absorption, Distribution, Metabolism, Excretion) tests. The various tests carried out after the discovery phase up to the first clinical trials in humans are called preclinical development. By this time in the testing process, many drugs that seemed promising have fallen by the wayside. Very often researchers have to abandon a drug when they find that it is poorly absorbed or unsafe. Often, a drug simply does not work in human beings as it worked in animal models. Nevertheless, progress may still be made. Compounds may be put aside because they failed to work in one disease, only to be taken Unique population High level of education Good health care records Basic genomics research Applied research New drugs, vaccines, diagnostics Pharmacogenomics research Figure 5. Building blocks of genomics research in Finland. 11 off the shelf years later and found to work in another. In the end, only a minuscule number of drug candidates tested ever reach testing in man. It can be estimated that only 1–5 out of 5,000 compounds that enter preclinical testing make it to human testing, and only one of these five may be safe and effective enough to reach pharmacy shelves. mathematical, and statistical methods and models for the biological sciences. To that end ComBi will provide PhD’s with high-quality methodological expertise. In their theses the students are expected to apply this expertise to computational, data analysis, or modelling problems in biology or a related field. The thesis projects are carried out in close co-operation with one or more research groups in the application area. A recent survey23 identified a number of private companies and organisations at Finnish universities that provide highly specialised services in preclinical drug development. These include development of bioassays and analysis methods for both parent drug molecules and their metabolites, testing of metabolic stability, in vitro cytochrome P450 (CYP) screening, induction of CYP enzymes, absorption/distribution/excretion characteristics and models, positron emission tomography (PET) techniques, wholebody autoradiography, and in vitro and in vivo toxicity testing. Networking and co-operation between the various service units forms an entity that is a competitive alternative to international CROs in providing preclinical testing services. Finnish R&D experts emphasise the shortage of people trained and experienced in certain aspects of preclinical research, most notably in live animal models. Although in vitro systems and computer modelling are reshaping the way preclinical studies are done, the drug development system is still quite a long way away from being able to dispense with in vivo animal experiments. 2.3.2 Drug candidate selection and preclinical development technologies in Finland Many of the technologies described above are being used by Finnish pharmaceutical companies. Computer-aided modelling of drug molecules is being actively pursued in many organisations, at Åbo Akademi University and the University of Helsinki, for example. Hormos Medical uses DNA chip technology to screen novel hormone drugs and Juvantia Pharma has combinatorial chemistry as its core technology area. Galilaeus uses combinatorial biosynthesis with bacteria to produce novel drug molecules. Orion Pharma is the only Finnish-owned fully integrated pharmaceutical company. Orion Pharma has the whole complement of technologies, facilities and know-how to produce novel drugs in-house. Examples of the methods used by Orion Pharma in drug discovery and development are cloning and production of drug target proteins, sophisticated structural analysis of these proteins, computeraided ligand design, high-throughput screening, and the use and production of chemical libraries. It should be noted, however, that Orion Pharma conducts such work in close collaboration with research teams at universities and other research institutions in Finland and abroad. Finland is regarded as a country which has been among the first (or the first) to put into practice many information technology applications, especially in the field of telecommunications. In the field of biotechnology, however, the same problems that have been recognised in the European context apply in Finland. There is an urgent need to build national centres of excellence and expertise that will apply information technology to more efficient production of biotechnology services and products, including drugs. The Biotechnology 2000 Working Group22 suggested that the bioinformatics infrastructure should be rapidly enhanced at every Finnish Biocentre. The Center for Scientific Computing (CSC) will be developed as the focal point of the national biocomputing network. The Graduate School in Computational Biology, Bioinformatics, and Biometry (ComBi) is a postgraduate research programme jointly offered by the University of Helsinki, the University of Turku and the University of Tampere. The research goal of ComBi is to develop computational, 22 23 2.4 Manufacturing of candidate drugs and assurance of quality 2.4.1 Manufacturing of drugs An active molecule is not a drug until it is packaged in a form that can be delivered into the body. In drug formulation, additional agents (excipients) are used to produce a pill, tablet or other form of preparation – the final drug. After a candidate drug molecule has been identified and validated, drug formulation and manufacturing procedures are decided on and carried through to full-scale commercial production. Technology in this part of drug development has been somewhat neglected, but holds great potential for shortening development time, cutting costs and improving the quality and reliability of drugs. New methodology is needed to work with very small amounts of substances and gain results transferable to a larger scale. Traditional ex- Biotekniikka 2000 -työryhmän muistio. Opetusministeriön työryhmän muistioita 2000:31. www.minedu.fi Raunio H, Preclinical research and development of drugs in Finland. Tekes Report 2000 12 cipients will be replaced by new versions, and they will require expensive safety testing and toxicity studies. The research and technology aspects can only be solved by a collective effort that covers many disciplines and tech24 nologies. These include : • The pharmaceutical sciences (material science, physical chemistry, analytical chemistry, formulation design, pharmaceutical technology, biotechnology). • Scale-up, i.e. from milligrams to a few grams. How can sufficient material of appropriate quality be obtained for early formulation and toxicity studies? • Process analytical chemistry (sensor technology, noninvasive spectrometry, chemometrics, process interfacing) • Process system engineering (measurement technology, chemical engineering, fermentation technology, process modelling, process control technology) • Process validation (strategy for applying, for example, chemometrics at an early phase in the process) • Formulation technology design to strengthen the multidisciplinary concept and develop generic tools for industrial pharmaceutical applications • Application of information system technology in monitoring of processes. adopted to cover every phase of the drug development process. The purpose of these regulations is to assure the quality and integrity of the data used by regulatory authorities to make sound decisions (for example to grant approval for marketing a new drug). The regulations address matters such as laboratory organisation and personnel, facilities, equipment, facility operations, test and control articles, and study protocol and conduct. The main sets of instructions are Good Laboratory Practice (GLP), Good Manufacturing Practice (GMP), and Good Clinical Practice (GCP). GLP and GCP are international ethical and scientific quality standards for designing, conducting, recording and reporting preclinical and clinical tests. Compliance with GCP standards provides public assurance that the rights, safety and well-being of clinical trial subjects are protected, consistent with the principles that have their origin in the Declaration of Helsinki, and that the clinical trial data are credible. Extensive descriptions of the standards can be found on the International Conference on Harmoni25 sation (ICH) homepage. For example, the European Commission has issued very detailed guidelines on the principles of GMP for medicinal 26 products. These guidelines state that all medicinal products for human use manufactured or imported into the EU should be manufactured according to the principles and guidelines of GMP. To enforce GMP requirements, authorities conduct field inspections where trained investigators periodically visit manufacturing sites to ensure that a facility is in compliance with the regulations. Several companies in Finland operate in the field of drug formulation, delivery and production. For example, Focus Inhalation is a new Finnish drug delivery company concentrating on the development of new inhalation products, inhalers and related production technology. Focus Inhalation was established in October 2000 when Leiras split off the inhalation technology unit of its R&D section. Focus Inhalation is located in Turku. The company applies the know-how of inhalation technology in new therapeutic areas as well as in the treatment of lung diseases. Their R&D activities are aimed at developing powder inhalers and formulations of different active drugs. One of the main targets of the company’s formulation research is to improve the powder characteristics so as to achieve higher relative deposition of the active ingredient in the lungs. 2.5 Clinical studies 2.5.1 The importance of clinical studies As the final stage in drug development, drugs intended for use in human beings have to be tested in human beings. These tests, called clinical studies or clinical trials, determine if a drug is safe and effective. Clinical trials are the most demanding and expensive part of drug development and ultimately determine the fate of a drug candidate. The information obtained during clinical trials is used as the main argument when a marketing authorisation for a drug is applied for27. Controlled clinical trials, in which results observed in patients given the drug are compared to the results in similar patients receiving a different treatment, are the best way 2.4.2 Assurance of quality In the mid 1970’s, the US Food and Drug Administration published regulations governing the conduct of safety tests on regulated products. Later, similar regulations were 24 25 26 27 EUFEPS, New Safe Medicines Faster. Proposal for research topics, methodologies, techniques and other means of promoting the drug development process to the benefit of the European citizens. Report 2000. www.eufeps.org http://www.ifpma.org/ich1.html Directive 91/356/EEC. http://pharmacos.eudra.org/eudralex Clemento A, New and integrated approaches to successful accelerated drug development. Drug Information Journal 33, 699-710, 1999. 13 science has come up with to determine what a new drug really does. This is why controlled clinical trials are the only legal basis for regulatory authorities to decide whether a new drug is effective and safe. Before clinical testing begins, researchers analyse the main physical and chemical properties of the drug in the laboratory and study its pharmacological and toxicological effects in laboratory animals. After review, including a thorough look at ethical aspects, regulatory authorities approve the protocol for the clinical trial. Clinical investigators first give the drug to a small number of healthy volunteers or patients. These Phase 1 studies assess the most common acute adverse effects and examine the doses that patients can take safely. If Phase 1 studies do not reveal major problems, such as unacceptable toxicity, the next step is to conduct a clinical study in which the drug is given to patients who have the condition it is intended to treat. In Phase II-III studies, researchers then assess whether the drug has a favourable effect on the condition (Figure 4). The information obtained in clinical trials guides health professionals and consumers in the proper use of medicines. This information is written in concise form in the product label. Product labelling is a key determinant of the success or failure of a new drug. Label claims are typically based on the mode of action of the new drug, on the specific patient populations and forms of disease. In most cases, the label claim largely determines the competitiveness of a new drug and how it can be actively promoted and advertised by a company. Several new technologies have been introduced in recent years in clinical trials. For example, computer simulation of clinical trials is now possible, giving sound and realistic trial outcomes. Modern electronic data capture and handling techniques have greatly improved data management during clinical trials. Improved telemetry techniques allow monitoring of trial patients while they are at home. In addition, drug companies will in the near future submit their applications for drug registration to the authorities in electronic format (electronic submission). It should be emphasised, however, that despite all the technological progress the actual clinical trials will still need to be done with real patients and healthy volunteers in the foreseeable future. verse, only becomes evident when real patients use the drug in real-life settings. Consequently, drug research does not stop when a drug is marketed. All drugs cause adverse effects that have to be monitored in some way. Pharmacovigilance is a system intended to provide early detection of warning signals to minimise the impact and spread of adverse drug reactions. For the system to be effective, there must be rapid reporting of adverse events to a central agency that must quickly recognise the signals and act upon them. In the EU, the national drug regulatory agencies and the EMEA (European Medicines Evaluation Agency) collect pharmacovigilance reports and carry out risk evaluation and risk management28. Today, pharmaceutical companies have pharmacovigilance departments to conduct post-marketing surveillance of their products. The pharmaceutical industry and drug prescribers are increasingly aware that the concept of drug safety is a continuum throughout the life of a drug product. Nobody wishes prescribed drugs to put patients at risk, and neither the regulatory agencies nor the pharmaceutical industry want damage to their reputations caused by serious adverse drug reactions. Therefore, collaboration between health professionals, the pharmaceutical industry, and the regulatory agencies is required to further improve the pharmacovigilance system. New information technology solutions, such as electronic reporting of adverse drug effects, are expected to make the whole chain of pharmacovigilance more effective. 2.5.3 Clinical drug development in Finland According to a survey conducted by the Finnish Pharmaceutical Industry Federation, 462 clinical trials were conducted in Finland in 1999, of which 260 (56%) were Phase III studies. Cost and quality are the key factors in selecting the location of the trial. The Finnish clinical trial units and personnel are considered highly qualified, but the recent rapid increase in costs may weaken Finland’s future position in competing for European and global projects. The experts interviewed for this report emphasise the importance of rapid handling of applications by authorities and state that work remains to be done to assure that processing of reports by Ethics Committees is speeded up according to Good Clinical Practice (GCP) guidelines. To meet the future demand for medical doctors with training and experience in clinical drug trials, the graduate school “Clinical drug testing” has been established. This graduate school is a joint operation between the universities of Helsinki, Tampere, Turku and Oulu, in conjunction with the National Agency of Medicines and the pharma29 2.5.2 Pharmacovigilance After a drug is granted marketing authorisation, it is sometimes rapidly introduced to a large number of patients. This is especially true in the case of drugs intended to treat common diseases such as high blood pressure or diabetes. The true extent of the drug’s effects, both beneficial and ad28 29 Conduct of Pharmacovigilance for Centrally Authorised Products. The European Agency for the Evaluation of Medicinal Products. CPMP/183/97, 1997. www.emea.eu.int Medicines and Health 2000. Pharmaceutical Information Centre Ltd, Finland 2000. www.pif.fi 14 ceutical industry. The goal of the graduate school is to train professionals who can plan, execute and analyse clinical trials according to GCP requirements. The students also conduct scientific work in their own disciplines. Many of the organisations providing preclinical and clinical services are affiliated with universities and do not operate on strict commercial principles. Many of these units have received considerable funding from public sources. For example, Clinical Research Services Turku CRST is a clinical trial service unit affiliated with the University of Turku and Turku University Central Hospital. SafetyCity is an example of a private company working to GLP quality standard that was recently established from a universitybased toxicology testing unit. The future for preclinical and clinical studies in Finland looks bright, provided that the present vigorous activity is channelled into the creation of commercially viable enterprises. It is expected that the rise of start-up biotech drug companies, particularly spin-offs from academic institutions, holds great potential for the creation of new jobs. These enterprises need funding to develop the necessary core technologies and facilities to produce material. While the effects of biotechnology on various industry sectors are complex and difficult to measure, the available information suggests that the industry in the USA leads the world in applying these new technologies to commercial uses. The foundation for this competitive advantage, particularly in the health care and life science areas, was laid by the substantial US public and private sector investment in research and development. American researchers are responsible for much of the science of the new biotechnology, and many of the industry’s top scientists were trained at federally funded institutions.30 2.6.1 Biotech drugs and drug production in Finland Several companies in Finland have taken up the challenge to produce biotechnology drugs (see text box). 2.6 Biotechnology drugs The four companies presented are examples of efficient transfer of results obtained in basic research to commercial drug development programmes, usually through Centre of Excellence or Centre of Expertise types of organisations. All of these companies operate in highly specialised fields requiring constant interaction between the company and academic research teams. Examples of biotech drugs are proteins, oligonucleotides, and vectors for gene therapy. Biotech drugs now constitute about one third of all new drugs entering the market, and the proportion is steadily increasing. In the future, pharmaceutical biotech products may also include genetically modified cells and artificial organs. The first step in the development of new biotech medicines is to identify a potential therapeutic target. It can take several years to study how a protein acts on its target and whether it is a candidate for development as a drug. To understand the biological mechanism of a disorder and how to treat it, researchers often need to create these proteins, which the body produces in minute amounts, in larger quantities. Scientists isolate the genetic sequences or genes that instruct cells how to make a specific protein. This information can tell simple bacteria, viruses, or yeast cells how to manufacture proteins that are normally made by our bodies. The added genetic information results, for example, in the production of human insulin or a new interferon. Gene therapy has received much publicity recently, and many scientists believe that it will play a major role in the future. Basically, gene therapy is simply a new way of delivering a protein. Before gene therapy can be used successfully in humans, the vectors employed must be improved, and many other technical problems must be solved. Gene therapy research is being carried out in academic research laboratories, small- to medium-size biotech companies, and large pharmaceutical companies. 30 Glycobiology is an area in which Finnish companies have made major advances recently. BioTie Therapies in Turku has developed a biotechnological manufacturing process for heparin, a commonly used anticoagulant that is currently derived solely from animal sources. This manufacturing process has enabled BioTie to produce “glycomimetic” pharmaceuticals that inhibit growth factors and thus have the potential of becoming anticancer drugs. Another example is Medicel, a Helsinkibased company specialising in the identification and production of bioactive glycans. One of their focuses is fucosylated glycans that are crucial in the development of inflammation and infection. The company aims, with the help of bioinformatics, metabolic engineering and enzymatic synthesis, to develop organ-selective inhibitors of leukocyte traffic during inflammatory diseases such as organ transplant rejection, ischemic reperfusion injuries and dry eye syndromes. FIT Biotech, a company based in Tampere, is developing a vaccine against the human immunodeficiency virus (HIV) based on DNA vaccine technology. Paugh J and Lafrance JC, The U.S. Biotechnology Industry. U.S. Department of Commerce, Office of Technology Policy, 1997. 15 One rapidly emerging biotech field is so-called “antisense therapeutics” or “anti-sense technology”. These terms encompass several types of nucleic acids that have the ability to modulate gene expression. These molecules are being investigated as tools for drug targeting and potential therapeutic agents. The recent arrival of the first antisense drug, fomiversin (Vitravene) on the European and US markets signals the dawn of gene medicines. Research in antisense technology is also carried out at many Finnish institutions, and it is likely that this will rapidly become an important technique of drug delivery. Only a few units in Finland have the capacity to scale up production of traditional small drug molecules. In Finland, pilot production capacity for small molecule drugs is a bottleneck, since most services in this field are obtained from outside the country. Another area requiring additional capacity is properly accredited GMP (Good Manufacturing Practices) facilities for producing biotech drugs in Finland. BioTie Therapies have their own pilot GMP unit, and a pilot scale GMP plant is being established in Oulu (Medipolis). This plant, to become operative in late 2001, will produce biotech therapeutics in quantities that meet the needs of clinical trials. In addition, the AIV Institute in Kuopio has a GMP laboratory with a high biosafety level for the production of viral vectors. 2.7 Conclusions There is very clearly an ongoing technological revolution in the way new medicines are made. Among many other factors, the very rapid advances in genomic sciences and information technologies contribute especially to this revolution. Smooth transfer of the results obtained in basic sciences to drug development pipelines can be considered to be one of the crucial determinants in the production of new efficient drugs. Knowledge and know-how are increasingly important for the production of goods and services, especially those in the field of drug development. On the one hand drug development is highly research-intensive, based as it is on the efficient use and application of scientific knowledge; on the other hand it is technology-intensive, drawing on the extensive use of new technology. Research, technology, innovations and, particularly, the relationships between them, have taken on new political and economic meanings and emphases. Research at academic institutions is often fragmented and small-scale and does not currently match up to the needs of large-scale pharmaceutical industry. This is, however, an opportunity for the Finnish pharmaceutical industry, which is still small-scale and adaptable in comparison with giant multinational companies. It is quite clear that global and European research and technological trends will increasingly affect the way pharmaceuticals are produced in Finland. The Finnish pharmaceutical industry faces the same global challenges as other European companies. A recent study on the competitiveness of the European pharmaceutical industry31 concludes that European companies are losing ground to the United States in the production and marketing of novel drugs. The US advantage and the process of declining competitiveness in Europe are emphasised by the advent of the genetics revolution. The greater competitiveness of the US system appears to be largely related to the extensive exploration of new technological opportunities. In fact, one notable difference between Europe and the USA in the 1990s is that while the US has become the centre of world basic research in life sciences and has developed a new research-intensive industry in this field, Europe has been unable to develop research in the most innovative areas of the drug sector. 2.6.2 On to the future Some predictions on 21 century medicines can be made on the basis of the current technological advances. The first half of the century will be dominated by human genes, proteins, antibodies, and cells to replace or repair damaged cells. In the second half of the century, atomic-scale devices (nanotechnology) will repair and restore human body functions. Tissue engineering – forming cells to rebuild defective tissues – will be a routine part of regenerative therapy. Stem cell technology will provide tools to construct various tissues, such as blood vessels, bone, skin, and even whole organs such as the heart and lung. Such treatments have the potential of providing true cures for diseases, not just temporary relief of symptoms. st 31 Gambardella A et al. Global competitiveness in pharmaceuticals – a European perspective. European Commission, 2000. http://pharmacos.eudra.org 16 2.7.1 The importance of networking According to Finnish experts, networking is essential for the development of novel pharmaceuticals in Finland. This means that research institutions (universities and others), small start-ups, established pharmaceutical firms, and regulatory authorities need to communicate effectively. The Pharma Cluster provides an effective domestic networking platform for all parties working on drug development. It is vitally important, however, to network within the EU, and for some purposes only the global scale will ensure an optimum flow of information. At the EU level, more networking, Centres of Excellence, and establishment of public databases have been proposed. These databases should contain results from preclinical and clinical drug studies. In this connection, a Centre of Excellence focused on pharmaco-IT solutions is required. European consortia incorporating academia, industry and regulatory authorities should be established to promote evidence-based clinical pharmacology, data collection and analyses of drug effects, electronic drug development and so on32. 2.7.3 The importance of basic biomedical research No novel drug discoveries will be made without basic biomedical science which is supported by public funding. The overall spending of universities on research increased about 50% in the 1990’s. At the same time, the funding from the Ministry of Education increased only about 20%. As a result, about one half of the research funding for universities comes from outside sources. In biomedical research, the proportion of outside money is about 40%. Of this money, a substantial amount is provided by the Academy of Finland, Tekes, and private foundations. It has been estimated that only about 10% of the outside money comes from private firms. This figure must be considered to be rather low, and there is plenty of room for closer collaboration between the private and public sectors, especially on the many aspects of drug discovery and development. According to many leading biomedical scientists, this trend is not a threat to the freedom and autonomy of universities, since both private firms and university research teams can benefit from the arrangement. In addition, it has been pointed out that universities are no longer the sole source of the latest scientific knowledge. Therefore, alliances between universities and firms employing high technology often lead to technology transfer from the private sector to the university. The Drug 2000 programme, funded by Tekes and the Academy of Finland, is an excellent effort to bridge the gap between basic and applied biomedical research with the goal of improving drug discovery and development technologies in Finland. It is not unreasonable to expect that the quantity and quality of drug-oriented research will improve considerably as a result of the Drug 2000 programme. The transfer of technology can be considered to be a critical factor in the future. This has been widely realised in Finland, and several ways of ensuring technology transfer have been implemented. Several Centres of Expertise aiming at exploiting the results of basic biomedical research have been established (Figure 6). For a thorough discussion on the complex relationships between basic and applied scientific research in Finland, official science and technology policies, the national innovation system, and their technological and economic impact, see the recent report published by the Academy of Finland34. 2.7.2 National core facilities and centres Various Centres of Excellence and Centres of Expertise relating to drug discovery and development are currently being organised throughout Finland. A recent report by the Biotechnology 2000 Working Group33 suggested that the five biocentres in Finland should sharpen their profile and increase their co-operation. Special attention should be paid to structural biology, bioinformatics and transgenic technology. Also stem cell research and DNA chip technology, as well as genomics and proteomics, deserve more attention. According to this plan, functional genomics and DNA chip technologies are to be located in BioCity Turku, and proteomics technologies in Biomedicum Helsinki, Biocenter Oulu, and BioCity Turku. Other technology areas urgently requiring one or more national core facilities are modelling and biocomputing. A network of well equipped core facilities would greatly benefit all key areas of drug discovery and development in Finland. 32 33 34 EUFEPS, Health and Wealth in the EU. How to improve the conditions for research and faster development of New Safe Medicines in Europe. 2000. www.eufeps.org Biotekniikka 2000 -työryhmän muistio. Opetusministeriön työryhmän muistioita 2000:31. www.minedu.fi The State and Quality of Scientific Research in Finland; A Review of Scientific Research and its Environment in the late 1990s. Edited by Kai Husso, Sakari Karjalainen & Tuomas Parkkari. Academy of Finland 2000. www.aka.fi 17 TECHNOLOGY TRANSFER Universities Other research Institutions Centres of Excellence Graduate schools Technology transfer companies Centres of Expertise University innovation services Transfer Basic research Education Start-up companies feedback Create business from innovations and research Products Services Established pharmaceutical companies Figure 6. Basic technology transfer mechanisms. 2.7.4 The importance of bioinformatics and IT The digital revolution of the past decades has created a virtual community that is rapidly expanding to cover the globe. It has been proposed that by the year 2005 only those pharmaceutical companies that have invested in the emerging in silico technologies and cyber-business opportunities, learned to mine the knowledge they contain and made the transition to e-R&D will be able to function properly. The implications for Finland are obvious: having a strong and advanced IT community, Finland is well poised to apply IT and integrate it into the biotechnology industry. This could be seen as one of the major determinants enhancing the competitiveness of the Finnish pharmaceutical network. Improved data management and bioinformatics techniques should be established especially in integrating preclinical and clinical studies. Bioinformatics is considered to be a key area to be developed in the immediate future. To enhance the bioinformatics infrastructure, several biocentres in Finland have actively developed this area. For example, the Centre for Scientific Computing (CSC) has established a biocomputing network with all the universities in which biotechnology research is carried out. Such networks will facilitate communication and collaboration between research groups at these universities. 18 3 Business prospects The Finnish pharmaceutical industry has experienced a dramatic shift from a protected industry with a limited number of domestically oriented medium sized companies into a sector comprising nearly one hundred companies collaborating closely with universities to develop NCEs for global markets. The development in the industry has been dependent on the changes in the international macroenvironment. Changes in governmental health care spending patterns, scientific progress, and the development of venture capital markets in Europe are just some of the important drivers of the industry’s development. As the recent growth of the Finnish pharmaceutical industry implies, entrepreneurial spirit and technical know-how can carry the industry a long way. However, to ensure the future success of this industry and to enable the growth of present start-up pharmaceutical companies, more investments in commercialisation and marketing activities are needed in addition to investments in technology. As will be demonstrated later in this chapter, there is a huge untapped potential in the pharmaceutical industry in Finland; the academic medical know-how present in Finnish universities still remains largely unexploited commercially. Pharmaceutical markets world-wide are experiencing a steady growth as a result of the needs of ageing populations and people’s increasing willingness to take care of their health. New medicines have made it possible to cure illnesses that were fatal in the past. Cures for a large number of today’s life threatening conditions are expected to emerge from the R&D pipelines of pharmaceutical companies in the future. Furthermore, the recent success of drugs like Viagra® implies that the markets for products that help people to achieve a better quality of life are huge. As an asset to a national economy, the pharmaceutical industry represents a knowledge intensive field where both economic up- and downturns often appear less dramatic than in many other high technology sectors. The success of pharmaceutical companies is based on a qualified workforce, and the industry currently faces a future of steady growth. This industry has the potential to become a major growth driver for the national economy of high technology Finland. 3.1 The drug development process – business considerations based on revenues from the existing, marketed products. 35 Drug discovery companies (DDCs ) that do not yet have marketable products are dependent on external venture capitalists for the completion of their R&D projects. From the very early stages on, the drug development process is based on a promise to fulfil an unmet medical need. Market assessments are conducted at early stages, and a strong patent position must be ensured from the beginning. Various kinds of specialised premises are needed during the drug development process. A key question for companies that do not have large-scale international distribution and marketing networks in-house is the finding and selection of partner companies for international marketing of the end product. On the pharmaceuticals demand side, the already significant role of pharmacoeconomics36 will further strengthen in the future. From a business strategy point of view the drug development process involves numerous sequential, yet interrelated considerations. Some of the major issues that company management faces during the drug development process are listed on the right hand side of Figure 7. Although these considerations are basically the same everywhere in the world, Figure 7 – like the whole of this chapter – emphasises the issues especially relevant for the Finnish companies in this industry. The single most relevant business-related issue for the success of the whole process is the availability of funding. For established pharmaceutical companies the funding of new R&D projects is typically 35 36 In this report the abbreviation DDC refers to drug discovery companies, although in some other contexts it has been used to refer to drug delivery companies. A branch of economics that applies cost-benefit, cost-effectiveness, cost-minimisation, and cost-utility analyses to compare the economics of different pharmaceutical products or to compare drug therapy to other treatments. 19 Drug development process Discovery (2-10 Years) Business Considerations Identification of unmet medical needs Technology transfer / In-house research IPR considerations, patent position Market assessments Need for sophisticated laboratory space Need for pilot scale production space Selection of potential partners for later stage development /international marketing Pharmacoeconomic considerations Co-operation with regulatory authorities Full scale production facilities International product launch Development of brand recognition Marketing (direct-to-consumer, to medical doctors, etc.) Preclinical Preclinical testing Laboratory and animal testing Phase I 20-80 healthy volunteers used to determine safety and dosage N E E D F O R R & D C A P I T A L Clinical Phase III Up to 10 000 patients studied for efficacy and risk/benefit analysis Phase II 100-300 patients used to look for efficacy and adverse effects Regulatory Review/Approval Years 0 Years 2 4 6 8 Phase IV, additional Postmarketing Testing 10 12 14 Figure 7. The drug development process and some key business considerations relevant at different phases of the process. Health care systems have traditionally been confused over who their customers are. While doctors and purchasers have received most of the attention from health care systems in the past, the situation is now shifting and increasingly knowledgeable consumers are becoming active decision-makers in pharmaceutical markets. The Internet will have an impact on the drug industry and the health care sector just as it has affected all other industries. The drug industry will start to generate innovative business concepts within the context of eHealth. The successful pharmaceutical companies of the future will have to invest heavily in direct-to-consumer (DTC) marketing and marketing to other stakeholders involved in pharmaceutical distribution. More than today these companies will distinguish themselves through branding. So far the European regulatory authorities have been more reluctant than their American counterparts to allow pharmaceutical marketing communication directed to consumers. In the long run, however, because of the globalisation of the media and the empowerment of consumers, it is unlikely that any authorities will be able to prevent European consumers from exposure to the advertising of pharmaceutical products. 3.2 Future business potential of the Finnish pharmaceutical industry The world’s pharmaceutical markets are growing steadily. 37 According to Scrip’s estimates , new product launches will be the main driver of the pharmaceutical industry’s growth between 1998 and 2002. The world’s pharmaceutical markets will grow steadily during this period, reaching USD 406 billion at manufacturers’ selling prices in 2002. For comparison, the world’s mobile phone (wireless handsets) market totalled approx. USD 65 billion38 in 2000. The pharmaceutical industry today is described as a network of actors, each of which concentrates on focused core competencies. Innovative activities as well as production and commercialisation of drugs involve a large variety of actors from firms to universities and research centres. Although the competitiveness of the whole industry must be assessed by looking not only at individual firms but also at a broader set of institutions, infrastructures and policies, the number of companies in the industry is an important indicator of the dynamism of the industry. The number of 37 38 Scrip’s Yearbook 2000, Vol 1, Industry and companies. Forecast for the global pharmaceutical market, 1998-2002, p. 135. PJB Publications Ltd, 2000. Calculations based on the fact that in 2000, the net sales of Nokia Mobile Phones reached EUR 21.9 billion, which was a bit over 30% of the total world market. EUR 1 = USD 0.890, 31.12.2000. 20 companies in the Finnish pharmaceutical industry has been constantly rising throughout the 1990’s. Pharma Industry Finland represents companies – Finnish and foreign – manufacturing, marketing and/or researching medicinal products in Finland. Currently (March 2001) this organisation has 68 member companies. The actual number of companies in the Finnish pharmaceutical industry is, however, even larger as some of the smaller domestic companies are not members of the organisation. Table 2 has been formulated to illustrate the current size of the Finnish pharmaceutical industry in monetary terms. Compared to other countries, the medical sciences are dominant in Finland’s publishing profile. In 1999, the number of publications in the field of the medical sciences in Finland as a proportion of all publications was 39 per cent higher than the world average. When academic activity in the medical sciences – publications and citations – is used as a measure of the level of potential innovation basis for the pharmaceutical industry, Finland ranks favourably in international comparisons. However, when we compare the size of the pharmaceutical industry in terms of pharmaceutical production in selected developed countries to the measure of academic research in the same countries, Finland’s position becomes somewhat special (see Figure 8). Generally, the impact factor indicates how many citations the publications of each country have received on average. In the case of the medical sciences, the impact factor of Finland for the period 1995–1999 is ahead of a large number of countries. As Figure 8 clearly indicates, of the countries selected for the analysis, Finland has the largest gap when the country’s pharmaceutical production is compared to its impact factor. Based on Figure 8 it can be concluded that there is a strong basis of scientific know-how for further expansion of the pharmaceutical industry in Finland. It can be argued that as drugs are no longer the only tradable goods in the pharmaceutical industry – equally or even more importantly, intellectual property and know-how are relevant merchandise – pharmaceutical production is not the right measure of the scale of the pharmaceutical industry. However, the basic trends described in Figure 8 are not that different if we look at pharmaceutical companies’ R&D investments, for example. Although the Finnish pharmaceutical companies’ investments in R&D have been constantly on the rise throughout the last decade, in absolute terms these figures still lag far behind those of Sweden, for example. If the pharmaceutical companies’ R&D investments in Finland were to reach the level of Sweden alone, in monetary terms this would mean more than a seven-fold increase compared with the current figures presented in Table 2 above. (Calculations based on Efpia data39) As Figure 8 indicates, countries with large domestic pharmaceutical markets tend to have more pharmaceutical production, as well. Chemical firms in major European countries were amongst the world’s first pharmaceutical manufacturers decades ago, and this tradition partly still survives. Today’s pharmaceutical production in these countries, however, originates to a varying degree from smaller national companies, which specialise in the sale of nonR&D intensive drugs, generics, and operate almost exclusively in their domestic markets. Table 2. Finnish pharmaceutical industry, selected figures. Finnish pharmaceutical industry, selected figures (millions) Total gross sales 2000 (wholesale prices)* Total gross sales 2000, international operations (wholesale prices)* R&D expenditure 1997* FIM 9 340 EUR 1 583 FIM 2 183 EUR 370 FIM 778 EUR 132 FIM 853 EUR 145 FIM 180 EUR 31 R&D expenditure 1999* Finnish venture capital investments in the industry in 1999 (pharmaceutical, medical equipment, and health care companies) † * Data source: Pharma Industry Finland statistics; the figures include data from the member companies of Pharma Industry Finland † Data source: Finnish Venture Capital Association’s publication “Pääomasijoittaminen Suomessa 1999” Although we have witnessed an increase in the number of research intensive pharmaceutical companies over the last decade in Finland, there is still a large, untapped potential in the industry, a pool of knowledge that has commercial potential which has not been utilised. One of the ways to quantify this potential is to look at the country’s performance in medical science versus the scale of the pharmaceutical industry and its production. The evaluation of universities’ research output on the basis of publications and citations was conducted by the Academy of Finland. 39 The Pharmaceutical Industry in Figures, 2000 Edition. Efpia 2000. Pharmaceutical production data based on SITC 54 Rev. 3. The United Nations uses the SITC to compile and report trade information and statistics among all nations. SITC 54 = Medicinal and Pharmaceutical Products 21 6 20 000 5 Pharmaceutical production (EUR Million) 7 25 000 Impact factor 4 3 2 15 000 10 000 5 000 Countries' impact factors in medical science in 1995-1999 Pharmaceutical production in 1998 (EUR Million) 1 0 0 Be lgi Un u ite dK m ing do m Fin lan d Sw ed en Fr an ce Ge rm an y in Sp a rla nd Ita ly Figure 8. Selected countries’ impact factors40 compared to pharmaceutical production. Data sources: Academy of Finland 200041; Efpia 200042 Limitation: Pharmaceutical production figures are absolute figures, the differences in size of a country/population are not taken into account. Impact factor = the number of citations of publications in medical sciences by country concerned / the number of publications in medical sciences by country. In 1998 the market share of German pharmaceutical corporations’ products in Germany’s total pharmaceutical market was 45 per cent, the share of French companies in France was 36.9 per cent, and the share of Italian companies in Italy was 25.8 per cent43. However, in all these 44 countries – as well as in Finland – the national corporations’ market share has been declining noticeably since the mid-1980’s. The trend is expected to go on as the research intensive pharmaceutical companies that operate internationally continue to capitalise on the R&D investments made during the 1990’s, and as the remaining protectionistic national procedures are abandoned. In addition to comparing Finland’s position in medical science and pharmaceutical production to that of other countries, comparisons can also be made with other knowledge intensive industries in Finland. The high quality of engineering in Finland has been praised by many. However, as Figure 9 illustrates, the scientific basis for the success of the pharmaceutical industry in Finland is impressive when Sw itz e compared to the support provided by the engineering sciences to the electrical and electronics industry in Finland. The growth of the Finnish pharmaceutical industry has to be supported in such a way that the strong science base can be turned into viable businesses that benefit the whole national economy. In addition to publications and citations, patents can also be used as an indicator of the research activities of a nation – or of any one company. The survey conducted for this report in the summer of 2000 reveals that the Finnish pharmaceutical companies expect their current research projects to lead to a considerable increase (43%) in the number of patents these companies hold by the year 2003. Successful development of patented inventions through domestic and international collaboration networks is the key to the future success of the Finnish pharmaceutical industry. 40 41 42 43 44 Impact factor = the number of citations of publications in medical sciences by country concerned / the number of publications in medical sciences by country. The State and Quality of Scientific Research in Finland; A Review of Scientific Research and its Environment in the late 1990s. Edited by Kai Husso, Sakari Karjalainen & Tuomas Parkkari. Academy of Finland 2000. www.aka.fi The Pharmaceutical Industry in Figures, 2000 Edition. Efpia 2000. Pharmaceutical production data based on SITC 54 Rev. 3. The United Nations uses the SITC to compile and report trade information and statistics among all nations. SITC 54 = Medicinal and Pharmaceutical Products Gambardella A et al. Global competitiveness in pharmaceuticals – a European perspective. European Commission, 2000. http://pharmacos.eudra.org. In 2000, the share of Leiras and Orion Pharma, the two largest Finnish pharmaceutical companies, of the total Finnish markets in pharmaceuticals was approx. 20 per cent. Calculation based on “Suomen Lääkedata 2001” information. 22 Gr ee ce Percentage share of all Finnish publications in 1999 100 85,3 Production in 1998 18 000 15 000 15 980 Percent 60 40 20 7 EUR million 80 12 000 9 000 6 000 3 000 575 0 0 Natural and medical sciences Engineering and technology Field of science Pharmaceutical production in Finland in 1998 Production of Finnish electrical and electronics industry in 1998 Figure 9. Scientific publications compared to production in Life Sciences vs. Engineering in Finland. Data sources: Academy of Finland45, Efpia (2000)46 and Federation of Finnish Electrical and Electronics Industry www.electroind.fi 3.3 Vigorous and growing Finnish pharmaceutical cluster During the 1990’s and the beginning of the 21st century, a wealth of new companies has been established in the industry. The reasons for this ”boom” are multiple but can on the whole be summed up in two categories. Firstly, the global molecular biology revolution that has its roots in the scientific advances of the 1970’s and 1980’s contributed to the emergence of knowledge intensive, focused biotechnology companies in the pharmaceutical industry, as well as in other life science industries. Secondly, the changes in the national macroeconomic environment and the restructuring of the established domestic pharmaceutical companies have contributed to the acceleration of new company establishment. Important changes in the industry’s environment include, for example, the introduction of the product patent, the interest of universities in becoming involved in companies’ research projects, and the increasing availabil- Universities’ active role in pharmaceutical R&D Pharmaceutical industry growth in Finland Molecular biology revolution Restructuring of the established domestic pharmaceutical companies Growth of the private venture capital industry in Europe and in Finland Figure 10. Factors that have contributed to the growth of the Finnish pharmaceutical industry in the 1990’s and in the beginning of the 21st century. 45 46 The State and Quality of Scientific Research in Finland; A Review of Scientific Research and its Environment in the late 1990s. Edited by Kai Husso, Sakari Karjalainen & Tuomas Parkkari. Academy of Finland 2000. www.aka.fi The Pharmaceutical Industry in Figures, 2000 Edition. Efpia 2000. Pharmaceutical production data based on SITC 54 Rev. 3. The United Nations uses the SITC to compile and report trade information and statistics among all nations. SITC 54 = Medicinal and Pharmaceutical Products. 23 ity of private venture capital. The main factors that have contributed to the industry’s growth in the 1990’s are summarised in Figure 10. Finnish Bioindustries currently (2001) lists a total of 122 companies in the Finnish biotechnology industries. Of these companies, over 50% operate in health care. Pharma Industry Finland (PIF) currently (March 2001) has 68 member companies, some of which are foreign companies that have operations in Finland. A number of newly established drug discovery companies are not members of PIF 47 yet. In the Ernst & Young ranking of the European life science companies – on the basis of the numbers of life science companies per country – Finland ranked sixth within the EU. Germany, the UK, and France naturally come out favourably in these kinds of absolute number comparisons. However, of the smaller EU countries only Sweden is clearly ahead of Finland in the number of life science companies; the lead of Netherlands over Finland is almost non-existent, and behind Finland are countries like Belgium, Denmark, and Italy. that have been formed over the past decade in Finland have their research roots in the projects of Orion Pharma. Since 1996 Leiras has been part of the international Schering Group which has about 140 affiliated and other related companies world-wide. In research and development Leiras specialises in family planning and hormone therapy, treatment of bone disorders and drug administration by polymer technologies. Leiras products are marketed mainly through Schering’s subsidiaries and associated companies around the world. The share of exports in the company turnover has increased remarkably during the past few years. Santen was established in Finland in 1997, when the Japanese Santen Pharmaceutical Co. Ltd. acquired the Finnish pharmaceutical company Oy Star Ab. Today Santen is a multinational pharmaceutical company that specialises in treatments for eye diseases. Santen Oy produces and markets a wide range of ophthalmic drugs. Santen’s European preclinical and pharmaceutical R&D unit is located in Tampere and its clinical research department in Helsinki. The manufacture of all Santen products for the European and American markets is concentrated in Finland. 3.3.1 Established pharmaceutical companies Although there are numerous discovery oriented, newly established companies in the Finnish pharmaceutical industry, the roots of the major employers in this industry date back to the first half of the 20th century. Of the established pharmaceutical companies that have research, development, production, and marketing in Finland, only Orion Pharma can be considered a Finnish company. The other two companies, Leiras and Santen, are in foreign ownership. Orion Pharma is a research-oriented pharmaceuticals division of the Orion Group health care business operations. With its 15% market share (in 2000) Orion Pharma is the leading pharmaceutical company in Finland. The R&D of Orion Pharma aims at proprietary drug innovations with focus on the central nervous system, cardiovascular diseases, respiratory diseases, hormone replacement therapy and urology. Orion Pharma invests heavily in R&D; measured by absolute R&D expenditure the Orion Group th ranked 6 among Finnish companies in the year 2000, leav48 ing numerous larger companies behind . In relative terms, when R&D expenditure is compared to company size and turnover, Orion’s investments in R&D become even more overwhelming in comparison to a number of other large Finnish companies. Today over one half of the total net sales of Orion Pharma come from international operations. Orion Pharma’s original preparations are marketed on international markets both by its own European subsidiaries and through the sales networks of international pharmaceutical companies. Many of the drug discovery companies 47 48 3.3.2 New business strategies Foreign pharmaceutical companies have marketing subsidiaries in Finland, and most of them also conduct research and development – typically clinical trials – in Finland. In addition, there are several smaller firms in the Finnish pharmaceutical industry that specialise in some area of drug discovery or development, including clinical trial services. The network of the firms in this industry covers all core areas of pharmaceutical research and development. The core products of the pharmaceutical industry are indisputably drugs, but the products of most of the firms are either intermediate products or services offered to other industry members. New drug companies The new network structures in the pharmaceutical industry have contributed to the emergence of a number of players in the Finnish pharmaceutical industry who base their business on narrow core competencies and outsource and network for all the other elements that are not considered “core”. The class of drug discovery companies (DDCs) which, according to Finnish Bioindustries, includes 16 firms (2001) in Finland, was non-existent until the new funding possibilities and novel network structures made it possible for a company to succeed on the basis of a narrow spectrum of activities. The strategies and tactics of DDCs are different from those of established pharmaceutical companies. Instead of developing drug candidates through global reg- Ernst & Young (2000) Evolution. Ernst & Young’s seventh annual European life sciences report 2000. Source: Keskinen Raija (2001) “Nokia tutkii 20 kertaa Metsoa enemmän”. Tekniikka & Talous 1.3.2001, pp. 4-5. 24 Table 3. Start-up biotechnology companies in Finland. Start-up biotechnology companies in Finland Helsinki Biomedicines (16) Diagnostics (13) Biomaterials (5) Others (20) Total 54 2 4 1 11 18 Turku 6 5 2 3 16 Location Tampere 2 2 4 Kuopio 5 2 5 12 Other 1 2 1 4 Data source: Finnish Bioindustries, www.finbio.net istration procedures, they typically develop them through clinical phases I and II, and after this so called “proof of concept” stage they licence or sell these drug candidates to gain revenue for proceeding with the next drug development projects. The Finnish DDCs focus on discovery and aim at partnering with multinational companies for later stage development and commercialisation of pharmaceutical products. Table 3 lists the start-up biotechnology companies in various areas in Finland in 2001. Drug discovery companies have a number of promising products in their development pipelines, but because of the long time scales typical for pharmaceutical R&D, it will take years before the first of these – if they successfully pass all phases of development – are launched in international markets. However, if successful, they have the potential to generate huge revenues. Before the first product candidate of a DDC reaches the critical “proof of concept” stage, many years have passed and vast amounts of R&D capital have been used. This R&D capital is available from venture capitalists, and promising, innovative drug development projects have the potential to attract significant major international capital flow to Finnish DDCs. The importance of overseas venture capital for Finnish DDCs is that it not only provides the capital for R&D, but also brings additional benefits such as marketing contacts worldwide, foreign expertise for company management, and business advice49. Because of the need to raise large amounts of capital, most DDCs are also likely to go public at some stage. BioTie Therapies was the first one of the Finnish drug discovery company to go public. In pharmaceutical licensing agreements royalties represent the main profit-sharing mechanism that operates once the product is on the market. Royalties are usually paid on the net sales value and reflect the risk/reward ratio between licensor and licensee. BioTie Therapies was established in 1992 in Turku, Finland, by Professors Markku and Sirpa Jalkanen. In 1996 the first investment round took place and EUR 3 million were raised from venture capitalists. In 1998, the President of Finland awarded BioTie Therapies the Inno-Suomi award. The second financing round took place in 1999, and in June 2000, the company was listed on the Helsinki Stock Exchange. The capital raised from IPO reached EUR 18.4 million. BioTie’s core competence is cell receptor research in disease areas with large market potential and unmet medical needs – in inflammation, thrombosis and cancer. The first clinical trials with Vapantix®, a product for the treatment of severe, life threatening inflammatory conditions, were conducted in 2000. Selling intellectual property rights and licensing out products after the first clinical trial phases is a feasible strategy for drug discovery companies because this way they can gain revenue to proceed with the next drug development projects. Currently, the largest revenues in international pharmaceutical business are, however, earned by the companies that market the end products – drugs – worldwide. Although the royalties and upfront and milestone payments usually vary between individual licensing agreements, it has been estimated that the marketer of a drug gets around 60–70% of the product’s sales revenues whereas the licensor’s share is somewhere between ten and forty per cent. Thus, Finnish pharmaceutical companies should be supported in their attempts to develop a presence in international markets and in building international marketing networks. 49 See: Competitive benchmarking and strategic analysis of selected biotechnology and pharmaceutical clusters. A report to the Chemical Industry Federation of Finland (CIFF), June 2001. Prepared by SAI Healthcare. 25 Service providers To support the development of the pharmaceutical industry’s new structures as well as other bioindustries, a number of specialised service companies have been established in Finland. The services these companies provide vary from preclinical testing services to clinical trials and from technology transfer assistance to marketing and business consultancy. Some companies have developed specialised technological capabilities that can, for example, assist in speeding up the pharmaceutical R&D process, and base their business on these patented technologies. Finland is considered a favourable place for conducting clinical trials, for several reasons: (i) overall reliability, (ii) low dropout rates, (iii) the precise manner in which study protocols are followed, (iv) reliable and comprehensive health register, and (v) efficient networking between industry, universities, and university hospitals. Therefore, the number of clinical trials conducted in Finland is considerable when compared to the size of the pharmaceutical market and population (Figure 11). Although the situation in clinical research in Finland today is satisfactory, international competition is intense and further development of clinical trial practices is still needed. A central question for the future of high quality clinical trials in Finland is the training of physicians who are able and willing to act as clinical investigators50. Furthermore, constant development of arrangements in hospitals is needed to ensure professional and competitive conduct of clinical trials in the future. Although the pharmaceutical service sector has been growing in Finland over the past decade or so, this part of the industry has remained rather small when compared to the size of the international Contract Research Organisation (CRO) giants, for example. As outsourcing and contract operations are becoming more and more common in the international pharmaceutical industry, the growth prospects for high quality service providers look promising, provided that they are capable of marketing their services internationally, too. MedFiles Ltd is an independent, privately owned Contract Research Organisation (CRO) that undertakes clinical research services for the pharmaceutical and medical device industries. MedFiles was established in 1987 and has its headquarters in Kuopio. Remedium Oy is a young, Espoo-based CRO, which offers a full range of services in clinical development. Finn-Medi Clinical Trial Center (CTC), based in Tampere and part of Finn-Medi Research Ltd., offers its clients clinical research services through an operational network of experts. Oy Galena Ltd specializes in the contract manufacturing and packaging of pharmaceuticals and herbal remedies. Galena’s founding partners include the University Pharmacy, the operator of the largest chain of pharmacies in Finland. The Tuusula-based company Pharmia Oy, established in 1993, is a service company authorised for the industrial production of drugs. It offers contract manufacturing and consulting services for pharmaceutical, herbal and nutritional supplement businesses. In February 2001, a management buyout took place in Medipolis Oy, Oulu. The manufacture of pharmaceutical molecules was then sold to a newly established company, Pharmatory Oy, and ten employees of Medipolis Oy joined the new company. A comparison of Finland to the rest of the world (1998) 10 8,6 Percentage 8 6 4 2 0 0,4 New Chemical drug entities introduced in clinical trials Pharmaceutical market 0,1 Population Figure 11. Clinical trials – a comparison of Finland to the rest of the world in 1998. Data source: Clinical trials in Finland, a publication of Pharmaceutical Information Centre Ltd, 1999. 50 To meet the future demand for medical doctors with training and experience in clinical drug trials, the graduate school “Clinical drug testing” has been established. For more information, see Chapter 2.5.3. 26 3.3.3 Related and supporting industries Advances in genetic engineering are expected to reshape vast sectors of the world economy. The boundaries between many once-distinct businesses, from agribusiness and chemicals to health care and pharmaceuticals to energy and computing will blur, and industries will converge to become a single powerful life-science industry. Advances in the natural and medical sciences allow a better understanding of disease at the molecular level, which facilitates early detection and treatment of disease. Traditionally, diagnostics have been considered separate from therapeutics. However, the prospect of diagnosis on the molecular level elevates diagnostics to the role of the first step in the treatment continuum. As discovery and diagnostics become more intertwined, pharmaceutical and biotechnology companies are forming alliances and making acquisitions to gain a position in genomics-based diagnostics. This role of diagnostics as an integrated part of the continuum that leads to individualised health care is illustrated in Figure 12 below. The Finnish In Vitro Diagnostic Industry Cluster (FIVDIC, http://www.medipolis.com/fivdic/) currently (June 2001) lists 25 companies in the industry. The true number of companies in this industry in Finland is, however, larger as not all the companies are members in the FIVDIC. Most of the products of this industry are sold abroad and, especially in the class of immunology reagents, Finnish companies have been internationally competitive. Biomaterials have wide ranging applications in both the medical device field and the development of effective drug delivery systems for pharmaceuticals. Promising innovations in the field of biomaterials include biomaterials for controlled drug delivery and novel biocompatible, biointegrative, and biodegradable materials. Biomaterials research links closely with R&D in the pharmaceutical sector, especially where the development of biomaterial technologies to support exact and effective delivery of drugs is concerned. In Finland there are currently a dozen companies involved in biomaterials R&D and production. Of the established pharmaceutical companies operating in Finland, Leiras and Orion have been successful in developing innovative biomaterial solutions for drug delivery. Population genotyping Diagnostics Drug development Drug manufacture Drug marketing Drug discovery Information technology Health care Future market prediction Populational disease profiling Individual disease predisposion Treatment advice Individual diagnostics Figure 12. The future process in the pharmaceutical industry. Adapted from Richmond 199751. 51 In Wallis Kathy, Sir Richmond Mark and Patchett Trevor (1998) The impact of genomics on the pharmaceutical industry. A pharmaceutical group white paper. PricewaterhouseCoopers. http://pwcglobal.com/gx/eng/about/ind/pharm/pdf/PwC_pharma_genomics.pdf 27 3.3.4 SWOT The strengths, weaknesses, opportunities, and threats of the Finnish pharmaceutical industry are listed in Table 4 below. Table 4. SWOT analysis of the companies in the Finnish pharmaceutical industry. Strengths • Focused technical / science expertise and know-how, strong patent position • Collaboration and networking with the universities and within the industry Opportunities • Advances in technology and pharmaceutical science • Markets with unmet medical needs • Organised high level health care in Finland • New international pharma business structure providing opportunities for new companies • Active national technology development policies • Broadening of international marketing operations Weaknesses • Small company size • Limited human resources • Small domestic market Companies in the industry expect the major future opportunities to result from advances in science and technology. This is in line with the current major strength of the industry: superior technical know-how in the areas of focus. Increasing demand for medicines and the unmet medical needs of the ageing population are naturally important opportunities for all the companies in the medical field. Additional aspects of the pharmaceutical industry that can be viewed as opportunities for the Finnish companies include organised high level health care in Finland, a new international pharmaceutical business structure providing opportunities for new companies, active national technology development policies, and broadening of international marketing operations. The threat most often mentioned by the companies in the industry is the fear of intense competition on the markets. Lack of qualified personnel is also considered a potential and severe threat to companies’ operations. Finally, for numerous young companies the concrete and potential lack of funding is a major future threat. Threats • Intense international competition • Lack of qualified personnel • Lack of venture capital and expertise support for start-up companies 3.4 Conclusions on business prospects Strong science base The launch of an approved pharmaceutical product is the result of a long R&D process that is based on an understanding of medical science and the functions of the human body. The development of this scientific knowledge in Finland is the task of universities, which have to be funded sufficiently. Unless the science base behind a drug development process is advanced enough, no major success in terms of drugs can be expected. Before profits can be expected from a drug development process, a long period of R&D investments and marketing efforts has already elapsed. The research activities in the pharmaceutical field in Finland are of world-class standard and are regarded as highly advanced in international comparison in some fields of science. However, the small size of the country and the relatively small number of internationally recognised researchers – although numerous when compared to the size of the whole population – have implications for the width of the science base. Effective networks Genomics, increasing consumer power and a number of other changes have all altered the traditional value chain of the pharmaceutical industry, resulting in the concept of value constellations, i.e. a network-based view. (See Figure 13.) In addition to technical know-how, networking, both between companies and between companies and universities, is also considered a major strength of the Finnish pharmaceutical industry. A strong patent position is essential for a company that wishes to trade with its intellectual property. The weaknesses of the industry reflect most importantly the limited size of both the Finnish home markets and the companies themselves compared to international competitors. A severe weakness of the newly founded companies is the lack of financial support. Start-up companies are totally dependent on external investors and venture capitalists to support them during their first R&D projects. Another major weakness mentioned by a large number of young companies is the lack of marketing know-how and business skills in their organisations. 28 Academic research centres, universities Service providers such as contract research organsations (CROs) Biotech companies Research-based pharmaceutical companies Information technogy companies Venture capital / pharma fund Other pharmaceutical companies Figure 13. Networking in the pharmaceutical industry. Adapted from: Verband Forschender Arzneimittelhersteller e.V. (1998) Innovation – the key to success. Innovative power of research-based pharmaceutical manufacturers in Germany. Neusser – Werbedruck GmbH, Remscheid, Germany. As illustrated by Figure 13, economic actors no longer relate to each other in the simple, unidirectional, sequential way described by a value chain. The members of the value network are dependent on one another for the continuity of their businesses. The network structures have contributed to the emergence of a number of new players – DDCs, service providers – in the Finnish pharmaceutical industry, who base their businesses on narrow core competencies, and outsource and network for all the other elements that are not considered “core”. The current size of the Finnish pharmaceutical industry and all the companies in the industry is small in international comparison. In order to prosper, the industry’s actors need to network not only within Finland but also with neighbouring biotechnology and pharmaceutical centres in the 52 Nordic region. Science parks, premises and infrastructure Essential elements in the Finnish pharmaceutical industry network are science parks that have been established with public support around the country. In the study of Arenius and Autio (1999)53 the Finnish science park infrastructure – not only in the pharmaceutical industry but also in general – and the importance of science parks in initiating high 52 53 technology start-ups were rated very positively. Science parks are extremely important especially for the pharmaceutical start-up companies that need a network of support services around them. The science parks have also been natural locations for pharmaceutical incubators. It is clear that for the future growth of the Finnish pharmaceutical cluster these parks and their development are essential. The future development of science parks should emphasise the importance of choosing a focus; although science parks today focus on different technology fields, and even within biotechnology and medical technologies each park has a somewhat different emphasis from the others, an even clearer focus is needed for each science park. Science parks provide infrastructure for networking between universities and private companies. Research co-operation between universities and companies in technical research grew significantly at the end of the 1990’s. The US and Finland have been found to be among the most effec54 tive nations in terms of university-industry collaboration . University-company networking and transfer of inventions from university research laboratories to commercial development and usage is an issue that is at the heart of the future Finnish innovation network. Specialised companies have been established to support technology transfer from universities. 54 See: Competitive benchmarking and strategic analysis of selected biotechnology and pharmaceutical clusters. A report to the Chemical Industry Federation of Finland (CIFF), June 2001. Prepared by SAI Healthcare. Arenius Pia and Autio Erkko (1999) GEM – Global Entrepreneurship Monitor. Kansakuntien yrittäjyyspotentiaali, kymmenen maan välinen vertaileva tutkimus, Suomen osaraportti. Teknillinen korkeakoulu, yritysstrategian ja kansainvälisen liiketoiminnan laboratorio, 1999. International Institute for Management Development IMD, The World Competitiveness Yearbook 1997, Lausanne, Switzerland (1997) and World Economic Forum WEF, The Global Competitiveness Report 1997, Geneva, Switzerland (1997). 29 In addition to conducting scientific research, universities provide drug companies with many supporting services; for example, specialised units have been established within universities for preclinical and clinical services. These services give important support especially for start-up companies. Naturally, services provided by universities have a very different cost structure from those provided by independent companies. Further discussion is needed on the role of universities as service providers for the pharmaceutical industry; service units need to be established and organised to support research in biosciences without distorting activities in the private pharmaceutical sector. Pharmaceutical companies require specialised premises with leasing arrangements that are flexible enough to meet the changing needs of the companies. Most of the newly established pharmaceutical companies are located in – or close to – science parks. Start-ups and spin-offs from universities and established companies are an important mechanism for exploiting pharmaceutical research. Spinoffs require incubators, services, and laboratory space located close to research organisations so that scientists can continue academic work and access the laboratories easily. Incubators should provide start-up companies not only with physical premises but also with services that these companies typically do not have in-house. In the transfer of university knowledge into commercial exploitation, incubators have a crucial role as a breeding ground for business activities55. Entrepreneurship and business development A Global Entrepreneurship Monitor study (GEM ) compared entrepreneurship in the G7 countries, Denmark, Israel, and Finland. The study revealed that of the countries analysed Finland has the lowest rate of entrepreneurial activity. According to the study only one in 67 Finns aims to start a company, whereas the figure for the top-scoring Americans is one in 12. In other GEM countries entrepreneurial activity is higher among people with a longer educational background, but in Finland higher education correlates negatively with entrepreneurial activity. Among Finns entrepreneurial spirit has remained low despite the fact that the Finnish environment for entrepreneurship has many positive attributes: a highly educated workforce, rapid economic growth, an advanced technology base, good infrastructure, and positive attitudes towards entrepreneurship. There is currently a considerable entrepreneurial drive in the pharmaceutical industry in Finland. However, the strong science base and entrepreneurial spirit cannot make up for the lack of experienced business management 55 56 56 the young organisations face. The typical problems of newly established small biotechnology companies include the lack of expertise in company management and marketing and reliance on only one or a few individuals – typically scientists – in corporate management. It is both a consequence of and a reason for the greater availability of funding for research and technology development rather than for commercialisation and start-up business processes. Ideally, market-oriented thinking should be the driving force behind even the very first steps of pharmaceutical research and drug discovery. Today’s pharmaceutical business is truly global. The small size of all the Finnish pharmaceutical companies in international comparison presents a challenge of growth for these companies. Although small size is often synonymous with flexibility, healthy growth is needed to ensure the continuity of business and to increase reliability. Selling intellectual property rights and licensing out products after the first phases of clinical trials is a feasible strategy for discovery companies because this way they can obtain revenue to proceed with the next drug development projects. However, the largest revenues in international pharmaceutical business are currently earned by companies that market the end products – drugs – worldwide. Thus, Finnish pharmaceutical companies should be supported in their attempts to develop a presence in international markets and in building international marketing networks. Ability to attract key staff Lack of qualified personnel is already today a problem for many companies in the Finnish pharmaceutical industry, and the situation is likely to get worse during the next decades. Pharmaceutical companies need to attract skilled management and scientific staff from various sources. Apart from graduates from Finnish universities, the Finnish pharmaceutical industry can attract staff both from abroad and from other, related industries in Finland by offering a wide range of opportunities for career development. There are major difficulties in attracting foreign expertise to Finland. Although most of the Finnish pharmaceutical companies are relatively small, they still compete and operate globally. To succeed in this kind of environment, they have to attract management that is experienced in international business. However, in terms of remuneration, with the current salary levels Finnish pharmaceutical companies cannot compete with their foreign counterparts for worldclass managers. This weakness is further emphasised by the heavy taxation of earned income in Finland. Share op- See also Sainsbury (Lord), Cooke Philip, Evans Chris, Ferguson Mark, Roberts Gareth, and Wilson Alan (1999) Biotechnology clusters. August 1999. See Arenius Pia and Autio Erkko (1999) GEM – Global Entrepreneurship Monitor. Kansakuntien yrittäjyyspotentiaali, kymmenen maan välinen vertaileva tutkimus, Suomen osaraportti. Teknillinen korkeakoulu, yritysstrategian ja kansainvälisen liiketoiminnan laboratorio, 1999. 30 tion schemes are important in attracting key staff; for a company that does not yet have any major cash flow coming in, this may be the only way to remunerate competitively and provide incentives for the staff. In 1999 alone, the member companies of Pharma Industry Finland (PIF) invested FIM 853 million in pharmaceutical R&D in Finland. The figure has been rising, the increase since 1997 totalling nearly 10 per cent. Public funding for research projects with commercial potential in Finland is mainly available from three sources in addition to university budgets (Figure 14). The Academy of Finland allocates research funding for Finnish basic research, conducts systematic research evaluations and influences the Finnish science policy. The funding decisions made by the Academy’s Research Council for Health in 1999 totalled FIM 179.8 million; in 1995 the figure was FIM 81.8 million, so there has been a considerable increase over the last few years. The National Technology Agency – Tekes – is the main financing organisation for applied and industrial R&D in Finland. At the beginning of 2001 a new technology programme focused on biomedicine, drug development and pharmaceutical development – Drug 2000 – was implemented by Tekes. The Academy of Finland will also be participating in the financing of the programme. The Finnish National Fund for Research and Development – Sitra – is an independent public foundation. Sitra invests in technology firms and venture capital funds, and finances and implements research, training and innovative projects. Currently Sitra is a shareholder in about one hundred technology companies. Availability of funding The allocation of funding for research and development (R&D) purposes in Finland has been steadily rising through the whole of the 1990’s. In 1999, 3.12% (EUR 3.7 billion) of the Finnish GDP was allocated to R&D in Finland, which puts the country amongst the leading OECD countries57. The private sector share accounted for almost EUR 2.6 billion, i.e. 70 per cent of R&D funding. Although Finland today ranks favourably in international comparisons between countries in terms of R&D funding, constant development in the allocation of funding and evaluation of different funding instruments is needed to keep up with the changes in the international environment. Nowadays funding is better available for pharmaceutical R&D than a decade or two ago, but whether today’s funding is enough to allow promising R&D projects to evolve into international success stories remains to be seen. What is more, the availability of funding for purposes other than R&D, e.g. companies’ marketing and business development, is limited. Parliament Government Ministry of Education Ministry of Trade and Industry Academy of Finland The National Technology Agency (TEKES) Finnish National Fund for Research and Development (SITRA) Figure 14. Major funders of research in the public sector in Finland. 57 Sources: Tilastokeskus (2000) Tutkimus- ja kehittämistoimintatilasto 1998, and Tekes (2000) http://www.tekes.fi 31 Of these, forty or so operate within the fields of biotechnology and pharmaceuticals. The three funding organisations described above together form a unique kind of continuum which makes it possible for academic ideas to evolve into growth stage companies. In addition to public money, however, private venture capitalists have also started to play a more active role in Finland. The Finnish private equity and venture capital industry was practically non-existent at the beginning of the 1990’s, but today it is comparable to that in most other European countries. When the amount of investments made by private equity and venture capital companies is compared to the GNP (Gross National Product), Finland ranks 58 third in Europe, after the UK and the Netherlands . Development and strengthening of the venture capital industry is pivotal for the evolution of the Finnish pharmaceutical industry and the start-up company base. Supportive policy environment Although public policy cannot create business clusters, governmental actions can support the creation of conditions that encourage the formation and growth of clusters. The regulatory and fiscal framework should provide incentives that facilitate company formation and growth within the pharmaceutical cluster. Apart from indirectly supporting the industry’s development by providing incentives for entrepreneurship, governmental and municipal authorities can also direct resources straight to the industries they want to support. Kivinen and Varelius (1999)59 conclude that technology policy related measures of support have had positive effects on the development of biotechnology industries in all the European countries they studied, which include Finland, France, the United Kingdom, Germany, and Sweden. In many countries medicines have been the prime target for health cost containment measures. However, on average pharmaceutical expenditure in Europe accounts for only 15% of total health care expenditure. (In Finland 15% – i.e. FIM 6936 million – of total health care expenditure in 1997, according to “Pharma Facts Finland 1999” from the Pharmaceutical Information Centre.) A major challenge that largely determines the future of the whole Europe-based pharmaceutical industry is to find a balance between governments’ budgetary concerns and the research based pharmaceutical industry. 58 59 Finnish Venture Capital Association (FVCA) (2000) http://www.fvca.fi Kivinen Osmo and Varelius Jukka (2000) Piilaaksosta BioCityyn – Eurooppalainen bioteknologia Amerikan malliin? University of Turku, Research Unit for the Sociology of Education, Painosalama Oy, Turku 2000. 32 4 Education 4.1 Background to education in the Finnish pharmaceutical field (R&D) includes chemists, biochemists, biologists, medical doctors, pharmacists, marketing professionals and experts in economics, pharmacoeconomics, data management, and production. Developing a new drug is a multidisciplinary process requiring chemists, biochemists, biologists, medical doctors, pharmacists and engineers, as well as marketing professionals and experts in economics, pharmacoeconomics, production and regulatory affairs. Also, frictionless collaboration between professionals is required. Universities already collaborate extensively with the pharmaceutical industry in applied science and polytechnics collaborate with the industry in process development. This trend should be intensified in the future. At the end of the year 2000, the Finnish pharmaceutical industry employed more than 6700 people – 8300 if the wholesale sector is included. In the pharmaceutical industry the proportion of white-collar employees is higher than the average for industry as a whole – amounting to nearly 80%. Academic graduates constituted over 30% of the total workforce. But what will the situation be in 2010 or 2020? In the future, competition for qualified personnel will get tougher and there will be a need for new kinds of expertise, skills and curricula. To assess the educational and training needs of the future, we need to examine the personnel structure and educational background of the Finnish pharmaceutical industry today. Table 5. Academic professionals needed in the drug development process. Discovery Biochemists Pharmacologists Pharmaceutical chemists Molecular biologists Professionals in data capture and -mining Analytic & synthetic chemists Professionals in animal experiments Biopharmacists Toxicologists Professionals in pharmaceutical development and manufacture Clinical scientists Clinical research associates (CRA) Biostatisticians Professionals in data management Professionals in registration & regulatory strategies Professionals in manufacturing Professionals in marketing Pharmacoeconomists Preclinical Testing Clinical phases Registration procedures Manufacture Marketing As we have already seen (Chapter 2), developing a new drug is a multidisciplinary process. The work begins with biomedical basic research and continues through the search for the pathogenesis of a disease and the identification of drug targets to the finding of a new molecule (Table 5). The quality, efficacy and safety of the drug are initially investigated in preclinical studies, and clinical trials conclusively establish its suitability for use in man. These aspects of drug development are strictly governed by regulatory guidelines. In practice, these are implemented in the form of codes of good practice (Good Laboratory, Clinical Trial, and Manufacturing Practice) followed by the entire pharmaceutical industry. In addition, issues of production, pharmacoeconomics, marketing and distribution must be addressed throughout the development process. Thus the range of professionals needed in research and development In addition to academically trained personnel, the pharmaceutical industry needs professionals trained by vocational schools and polytechnics, e.g. laboratory assistants, process operators, engineers, bioengineers, graduates in laboratory science and medical laboratory technologists. 4.1.1 Personnel structure and educational background in the Finnish pharmaceutical industry The Pharmaceutical Industry in Finland (PIF) with its 68 member companies (Table 6), Finnish Bioindustries (FIB) with 24 member companies in the pharmaceutical field, and 17 non-affiliated companies had a total of 6700 em- 33 ployees at the end of the year 2000. The PIF members include established pharmaceutical companies and several local branches of international companies carrying out clinical drug research in Finland or importing pharmaceuticals. The largest drug discovery companies (DDC) and some Contract Research Organisations (CRO) are also members. Table 6. Personnel in the pharmaceutical industry, 31.12.200060. Total (PIF members only) • Clerical employees • Workers Of this total • Employees with university education • In R&D • In Quality Control • In Marketing 2239 1606 431 1852 6540 5181 1359 (79.2%) (20.8%) (100.0%) (34.2%) (24.6%) (6.8%) (28.3%) (over 30% of total personnel). In addition, the proportion of people working in Research and Development (R&D) is high in this industry – 25% in the year 2000. In fact, this figure is higher than in any other branch of the chemical industry, where the average is 10%61. The high proportion of R&D personnel is more pronounced in DDCs, as is the demand for academic education. When the present situation is viewed by educational discipline, we notice that the proportion of technically trained employees is high (28%), and that as many as 15% of employees working in the pharmaceutical industry have only general education (Figure 15). In Europe, including Finland, the pharmaceutical industry is one of the major high-technology industrial employers in its own right, and also creates many jobs indirectly, both upstream and downstream62. Sectors such as packing, wholesaling and pharmaceutical retailing are all heavily dependent on the pharmaceutical industry. Through its R&D activities carried out in close co-operation with universities and hospitals, the pharmaceutical industry contributes a significant amount of resources to finance the work of researchers at universities and health care centres. It should be noted that companies specialising in pharmaceutical development aim at keeping their own workforces as lean as possible, and that research collaboration with universities is a prerequisite for new innovations. In addition to its own personnel, a pharmaceutical company indirectly employs about 1.5 times more people at a university. In line with the emphasis on research, the proportion of clerical workers is higher than the average for industry as a whole – amounting to nearly 80% (Table 6). Another typical feature is the high proportion with academic training Humanistic and art Agriculture and forestry Service sector General education Natural sciences Commercial and Marketing Health and social Technical Educational science Figure 15. Education in the pharmaceutical industry by discipline63. 60 61 62 63 Pharma Facts Finland, 2001. Pharma Industry Finland. Kemianteollisuus 2010, Kemianteollisuus ry ISBN-952-9596-10-3 European Federation of Pharmaceutical Industries and Associations, Rue du Trône 108 – B-1050 Brussels – Belgium. http://www.efpia.org/ Source: TT salary statistics (TT:n palkkatilasto) 12/1999, TT – The Confederation of Finnish Industry and Employers. 34 In conclusion, the pharmaceutical industry in Finland makes up only a small proportion (1%) of national industry and its impact as an employer is not yet great. However, there is enormous potential in the pharmaceutical and biotechnology industries to become major economic drivers in the near future, creating substantial wealth and employment opportunities across the country. If the supply of well-trained personnel is insufficient, this could create a serious bottleneck in the search for new medicines. the Finnish educational system have on the pharmaceutical industry? What possibilities will there be for collaboration between educational institutions and the industry? How much investment is needed for developing the educational system? What have international surveys on the needs of the pharmaceutical industry shown? The educational system in Finland consists of comprehensive school, upper secondary education including upper secondary vocational education and upper secondary school, polytechnics and universities (Figure 16, Ministry of Education, MoE)67. Upper and secondary education in Finland has been thoroughly reformed in recent years68. In vocational schools, all degrees consist of 120 credit weeks instead of the earlier 80 credits. From the beginning of 2001 they include a six-month on-the-job training, a minimum of 20 credits. Similarly, in all polytechnic courses the compulsory on-the-job training is a minimum of 20 credits. Students´ degree work will usually be done on the job and concern practical work-related problems. Courses leading to a polytechnic degree take 3.5–4 years or 140–180 credits, depending on the field of study. Job training is a challenging opportunity for collaboration between schools and the pharmaceutical industry. The university system will be developed so that it can provide a high level of basic teaching, researcher training and scientific research. The bachelor’s degree (120 credits) will be completed in three years and the master’s degree (160–180 credits) in five69. The purpose of the reform was to establish an internationally compatible degree structure providing students with the opportunity to combine studies across disciplinary and institutional boundaries. Moreover, universities offer scientific postgraduate degrees in the form of licentiates and doctorates. In a bid to boost postgraduate education, universities have established joint programmes leading to the doctoral degree. A system of four-year graduate schools (Table 7) will intensify this education in the future. These graduate schools will provide the badly needed specialists for the developing new DDCs as well as for the more traditional established pharmaceutical industry. At the end of 1999, the Government approved the new Development Plan for Education and University Research for 70 1999–2004 . This plan also creates a framework for future education for the pharmaceutical industry. The five most important issues for the pharmaceutical industry are: 4.1.2 Competition for qualified personnel getting tougher The level of employment is high in all fields of the pharmaceutical industry64. The typical unemployment rate is 10% among newly qualified people. In certain fields, such as pharmacy, there is no unemployment at all. Interviews conducted in March and November 1998 among the 686 member companies of The Confederation of Finnish Industry and Employers, TT (including Orion, Leiras and Santen in the section of chemical industry) showed that competition for skilled workers is expected, particularly in information sciences and mathematics65. All sectors of industry compete for these specialists. The pharmaceutical industry competes with the public health care sector for medical doctors and with pharmacies for pharmacists. The training of pharmacists is grossly inadequate today. The competition for the best people is fierce within the pharmaceutical industry, too. DDCs have recruited a high proportion of their employees from among people trained in the traditional pharmaceutical industry. In the future, as the size of each age cohort decreases and more people retire, there will be a lack of skilled and educated people, and competition for employees between different industries and companies will become even more intense. For instance, an estimation by the Chemical Industry shows that for reasons of age structure, the shortage of personnel will, at its worst, be more than one third of the industry’s entire workforce by 201066. 4.1.3 Ongoing reforms and topics of debate and their influence on education The following questions will form the background for extrapolating future educational needs: What are the educational trends in Finland? What influence will the changes in 64 65 66 67 68 69 70 Ministry of Education, Finland. http://www.csc.fi/kota/taulukoita/tyala.xls Teollisuuden osaamistarveluotain 2/98. Teollisuuden ja Työnantajain Keskusliitto, Helsinki, 8.4.1999. http://www.tt.fi/julkaisut/. Kemianteollisuus 2010, Kemianteollisuus ry ISBN-952-9596-10-3 Ministry of Education, Finland. http://www.minedu.fi/minedu/education/administration_chart1.html Ministry of Education, Finland. http://www.minedu.fi/minedu/education/ Ministry of Education, Finland. http://www.minedu.fi/minedu/education/ Ministry of Education, Finland. http://www.minedu.fi/eopm/hep/ii/1_2.html 35 Age Years 5 4 3 2 1 3 2 1 10 9 8 7 6 5 4 3 2 1 4 Universities AMK institutions (polytechnics) 3 2 1 3 2 1 Upper secondary schools Vocational education and training 16 Compulsory schooling 15 14 13 12 11 10 9 8 7 6 Basic education Preschools Figure 16. The educational system in Finland. • Responding to changes in the workplace and job creation • Internationalisation, and the introduction of a more varied language syllabus at all levels of education • Improving mathematics and science skills • Continuing the policy of rewarding centres of excellence and upgrading the training of researchers • The principle of lifelong learning. The pharmaceutical industry has the opportunity to become involved in developing pharmaceutical education through on-the-job training and through collaboration with the educational establishments in planning teaching programmes. Increasing overall flexibility and opportunities for individual choice are considered important. Internationalisation has also emerged as a key objective. Polytechnics and universities should either offer a majority of their students the opportunity to study in a foreign institution or provide courses taught in foreign languages. The emphasis in polytechnic and university education will shift from classroom instruction to self-study, project work and multi-method study. However, the introduction of new teaching methods requires an extensive continuing education programme for teachers. The current system whereby academic merits are based mainly on research activity does not encourage the development of teaching. The Development Plan for Education and University Research clearly indicates that in the future more funding will be provided for new units and promising new disciplines, and also for the study of vital research topics. As shown in the previous sections of this report, pharmaceutical development is one of the future areas of Finland’s success. One of the greatest threats to the development of pharmaceutical education in Finland is the poor success in attracting money for education. Will the improvements remain on paper without implementation because basic funding and teaching resources do not increase? In fact, measured in allocated financial resources per student, Finland dropped 36 Table 7. Finnish Graduate Schools in Biomedical Sciences. Name A.I. Virtanen -institute Graduate School Biocenter Oulu Biomedical Graduate School of Helsinki Clinical Drug Research – Planning, Execution and Critical Evaluation ESPOM Finnish Graduate School of Neuroscience Graduate School for Bio-organic chemistry Drug Discovery Graduate School Graduate School of Informational and Structural Biology Graduate School in Pharmaceutical Research Helsinki Graduate School Biotechnology and Molecular Biology Medical Graduate School Tampere Graduate School in Biosciences Postgraduate School of Health Sciences (PGS) Turku Graduate School of Biomedical Sciences Viikki Graduate School in Biosciences Key: MoE = Ministry of Education, AF = Academy of Finland Trainees, total / MoE + AF 80 / 15 145 / 26 102 / 21 37 / 7 40 / 9 ~100 / 19 90-100 / 17 24 / 7 24 / 9 65 / 10 67 / 36 ~50 / 22 68 / 18 61 / 20 100 / 33 34 / 20 during the 1990’s from the forefront of higher education to the level of developing countries in South America and South-East Asia71. Other questions include the following: How will the co-operation of teaching establishments and industry work in practice? Will the teaching institutions, teachers, companies and students have the incentive to implement the changes? And how well will the restructuring of vocational education work in practice? One potential obstacle will be finding companies offering job training and tutoring for students. There is a European-wide attempt to identify the future training and education needs for employees and the educational challenges in the pharmaceutical industry72. A Workshop on Future Training Needs in Pharmaceutical Sciences was held in Weybridge, Surrey (UK) in May 2000. The EUFEPS (European Federation for Pharmaceutical Sciences) conducted a survey in 1997. This gave rise to the workshop that discussed the apparent gap between the graduate output of universities and industrial requirements. During the workshop it became apparent that, in order to respond to the rapid changes in the pharmaceutical field and the arising needs in the development of education, there is a need for a partnership that includes not only in71 72 dustry and academia but also government. These three bodies have both synergistic and diverging interests in scientific education. For example, questions that interest the pharmaceutical industry are: How can we hire the most talented students? How can we provide the environment to make them rapidly productive in industry? And how can we establish partnerships with first-class educational institutions? In conclusion, the educational challenges in pharmaceutical development are: • Understanding the industry’s present make-up and needs • Finding the right balance between education in basic science and training in emerging areas of science and technology • The relative roles of academia, industry and government in providing optimal graduate and postgraduate education and training • The role of the industry in continuously training and developing graduates and post-graduates in their career. To ensure successful changes in education, the needs of the labour market must be surveyed. This information has not OECD, Education Indicators: Education at a Glance 2000 – Chapter B, and tabulations. Reviewed in Talouselämä 6/2001, Jan Erola: Anoreksia iski yliopistoihin. http://www.oecd.org/els/education/ei/EAG2000/chB.htm The European Federation for Pharmaceutical Sciences (EUFEPS), Newsletter 3/2000. http://www.eufeps.org/ 37 been systematically offered or collected for the pharmaceutical industry in Finland. 4.1.4 Survey undertaken for this report The aim of the survey was to find out how well the present education and training system serves the needs of the pharmaceutical industry. Specific questions were asked to elucidate what kind of expertise and what numbers of personnel will be needed in the future, and what kind of education will be required for this end. More than 80 people were interviewed from various companies, training organisations and other interest groups. Background information on the industry’s education and recruitment needs was obtained from reports on recruiting and expertise needs in the industry, statistics, company annual reports and company training plans. Developing a drug is a multidisciplinary process and creates its own challenges for the recruitment of qualified personnel in the pharmaceutical industry. In addition, the working environment in the pharmaceutical field is extensively controlled by regulatory guidelines. A drug to be registered must be tested for efficacy and safety. Most recruits are completely unfamiliar with regulatory and quality issues, as well as the other central elements of pharmaceutical development. The pharmaceutical industry is used to a situation where a person recruited only has basic knowledge, and training takes place in-house. Also, the pharmaceutical industry is a relatively small employer for any single training programme. For example, chemists are educated at seven different universities, and about 10% of 73 them will go into the pharmaceutical industry . Therefore, it is easy to understand that it has been difficult for basic education to take into account the particular qualities required. 4.2 The gap between current education and industrial needs 4.2.1 What kind of knowledge and skills are needed in pharmaceutical development? Recent advances in science and technological development, and the change of the R&D chain into a network-like structure (cf. Science and Technology) have changed the demands for personnel in a pharmaceutical company. The numbers of routine tasks have decreased; expert tasks in R&D have increased. Also the challenges of biological drugs and gene technology are further accelerating the demand for personnel with new kinds of expertise. For example, in the research laboratory the laboratory assistant experiences a reduction in routine tasks and an increased demand for language, computer, collaboration and communi74 cation skills, etc. . Our interviews and surveys show that companies need people with an extensive and global view on the one hand, i.e. generalists, and top specialists in their own fields of research on the other. Developing new drugs requires generalists to manage projects and work on regulatory affairs. Quality systems and marketing also call for extensive and multidisciplinary knowledge and a global outlook. Experts are needed in molecular biological research, chemistry, pharmacology, pharmaceutical technology and clinical research, for example. The basic education must be sufficient. Beyond that the critical qualities are the person’s ability to learn throughout his or her working life and to master wide areas of expertise. Social and practical skills, abilities to perform in the information flood, work in teams, sell one’s own ideas to other people, and management of change become critical factors. The pharmaceutical industry is used to a situation where the person recruited only has basic knowledge, and training takes place in-house. This is mainly due to the fact that the pharmaceutical industry is a relatively small employer for any single training programme. Therefore, it has been difficult to take into account in basic education the particular qualities required. However, there are pressures to change education to better serve the pharmaceutical industry. The faster a new recruit can turn into a specialist the shorter the unproductive period on the job and the better the industry can cope with competition. If we are willing to change and modify our education, we must first find out what kind of knowledge and skills are needed in the field and how well current education meets the needs of the pharmaceutical industry. Our interviews and surveys indicate that companies need people with an extensive and global view on the one hand, i.e. generalists, and top specialists in their own fields of research on the other. Our survey also showed that there is a shortage of skilled employees in nearly all sections of pharmaceutical development today. Particularly, we are short of professionals in pharmacology, pharmacokinetics, clinical research for drug registration, animal pathology and experiments, bioinformatics, molecular modelling and strategic marketing. 73 74 Anni Fast, Taina Ruuskanen. Vastavalmistuneiden kemistien sijoittumistutkimus 1999. Kemisti 3/2000, 26-25. Kemianteollisuus 2010, Kemianteollisuus ry ISBN-952-9596-10-3. 38 Language skills are now needed at all levels in a pharmaceutical company, from management to the factory floor. Investigators work in international projects, clinical trials are of a large multicentre type, instructions for the use of equipment are not available in Finnish, installation and service of laboratory equipment are done by mechanics from abroad, etc. These and many similar issues are changing the daily working environment in all knowledge-based industries. Skills to work in international organisations will be increasingly needed. In conclusion, in drug development, in addition to possessing a good knowledge of their subject, employees in science and engineering must be creative, good problem solvers and able to work in multidisciplinary teams. basic pharmacological in vivo research methods are a disappearing natural resource! In clinical trials there is also severe competition for skilled people, both clinical research associates (CRA) for monitoring and clinical research managers (CRM) with responsibility for the practical running of clinical trials. In Finland there are too few medical doctors and engineers who are interested in joining the pharmaceutical industry, as well as pharmacists with master’s (proviisori) and bachelor’s (farmaseutti) degrees. More professionals are needed for regulatory affairs, medical marketing, biometrics and statistics. There is distinct pressure for more molecular modellers of proteins and for experts in drug synthesis. In the survey we noticed the interviewees’ concern that there are very few people who master the whole R&D process of pharmaceuticals and are, in addition, familiar with IPR (Intellectual Property Rights) and patenting practices. People experienced in strategic marketing are also badly needed in the pharmaceutical industry today. The only rapid response to this need is increased vocational adult education, and the recommended responses are listed in Table 9. So far, it has been mainly the industrial employer that has given the required training. The productivity of the professionals only reaches a satisfactory level after the in-house training process. 4.2.2 What professionals are we short of today? Our survey shows that there is a shortage of skilled employees in nearly all sections of pharmaceutical development (Table 8). There is, in particular, a shortage of certain types of specialists and of senior investigators with 5 to 10 years of experience of their field. Companies compete for qualified specialists in clinical pharmacology and people who can perform high quality animal experiments. Several interviewees remarked that trained scientists who master Table 8. Top 10 list of pharmaceutical professionals needed today. Professional needs identified In vitro and in vivo pharmacologists Clinical research and regulatory affairs: Clinical professionals (M.D.) Pharmacokinetics Animal experiments: Skilled animal pathologists, laboratory assistants and pharmacists Bioinformatics and molecular modelling Medicinal chemistry Pharmacists in pharmaceutical product R&D Professionals in international patenting and registration strategies Professionals in strategic and international marketing QA personnel Key: U = university; P = polytechnic; I = industry Response by developing educational system Continuing or further education of pharmacists and medical doctors Continuing education of medical doctors Continuing or further education of pharmacists and medical doctors Continuing or further education of veterinaries, pharmacists and medical doctors Development of the existing new curriculum, MSc in Health Biosciences Further education of chemists (and pharmacists) Continuing or further education of pharmacists Postgraduate education of suitable professionals Basic and further education including biomedical knowledge Postgraduate education of suitable professionals U U U P, U U U I+U I+U U+P I+U 39 4.2.3 How well does current education meet the needs of the pharmaceutical industry? The survey performed did not include questions on basic education. However, the interviewees were worried about the level of knowledge in mathematical and natural sciences in Finland. This concern extends to the ability of comprehensive and upper secondary schools to give their students a sufficiently strong basis for further studies. The industry cannot compensate sufficiently for missing language or computer skills. When the opinions of companies on basic and further education were surveyed, the respondents reported that new recruits have sufficient subject knowledge. They estimated that the initiation of a new recruit into the working environment in a company takes at least 6 months. A person will be productive in a company after one to four years, depending on the job description. For example, in R&D, a recruit will be a specialist after three or four years. As a person advances from a novice to a specialist, the influence of basic training decreases and experience obtained in-house increases. Additional training for new employees is needed particularly in quality systems, internal documentation and regulatory processes. Most companies are satisfied with the qualification of laboratory assistants (laborantti) – quality and demands match. However, laboratory assistants lack sufficient knowledge of the particular features of the pharmaceutical field such as Good Manufacturing Practice (GMP) and Good Laboratory Practice (GLP). Further qualification of Pharmaceutical Assistants (lääketyöntekijän tutkinto) is being reformed. The interviewees hoped that their training in the future would take better account of the needs of the pharmaceutical industry. The respondents were satisfied with analytical chemists although the training of a chemist for drug analysis takes a couple of years. The training of synthetic chemists was not perceived to provide sufficient skills for the needs of pharmaceutical development. Skilled people have to be imported from central Europe, for example. The current engineering education system does not provide sufficient contextual skills for the biopharmaceutical industry, for example in good practices and the drug development process as a whole. The pharmaceutical industry is more technical than industry on the average. Therefore, engineers with good practical knowledge and skills are needed to build, serve and maintain the demanding equipment. Training in pharmacy was regarded as extensive enough, suitable for drug development projects and regulatory work for drug registration. Pharmacists were criticised for 75 76 being too much oriented towards pharmacies, and it was noted there is insufficient industrial pharmacy in the curriculum. Medical doctors have the same problem as pharmacists. Only few people are interested in employment in the pharmaceutical industry. Basic training in medicine does not prepare sufficiently for work in the pharmaceutical industry, for example for clinical research for drug registration, unless the student chooses suitable elective courses. Those trained in commercial and marketing fields lack the special knowledge required in the pharmaceutical field. It was stressed that marketing sweets is quite different from marketing medicines. Training is also needed in externalising services and related IPR issues. New university curricula for a master’s degree have been introduced in Health Biosciences (Turku), Biostatistics (Turku), and Medical Chemistry (Kuopio-Jyväskylä). The industry places great hopes on these experts. Polytechnics have also planned curricula focusing on the needs of the pharmaceutical industry75. Clinical co-ordinators (Clinical Research Associate, CRA) with various educational backgrounds are recruited. It was considered that in Finland we lack suitable training for CRAs, i.e., a long-term study programme including Good Clinical Trial Practice (GCP), GMP and a general understanding of drug registration. A lack of top management training particularly targeted at bioindustries was clearly identified. However, first steps towards providing a solution to this problem have been taken. From the fall of 2001 the Turku School of Economics and Business Administration will provide the missing training in its executive MBA programme in the form of a separate bio-module76. The interviewees were satisfied with the graduate schools offering further education for the academically qualified. Traditionally, researchers have been trained to become clerical workers, and even today the state is their biggest employer. As the targets of doctoral degrees and the numbers of PhDs grow from year to year, not all PhDs will be able to find traditional forms of employment but many of them will have to become entrepreneurs and self-employed professionals selling their expert services. Unfortunately, today the graduate school curricula do not include training in project management, quality issues or characteristics of the pharmaceutical industry. Today it is much easier than before to obtain financing to establish a discovery or research company. The interviewees strongly stressed that it is important to teach researchers the laws of business and IPR issues so as to increase the chances of commercial success. The opinions of educational organisations on basic and further education agreed quite well with the opinions of companies on the ability of basic and further education to meet the needs of the pharmaceutical industry. Their expe- Turun bioalan strategia. Tutkimus- ja koulutustyöryhmän raportti, kevät 2000. Innomarket, Turku School of Economics and Business Administration. http://www.tukkk.fi/markkinointi/innomarket/ 40 rience was that basic education provides a good basis for industry to train their skilled workforce. Many interviewees feared that the cuts in financial resources for basic education in the previous five years were starting to make themselves felt in the quality of learning: the foundation for building the skills needed in industry was starting to crumble. The development of curricula needs more money and dedicated teachers. It is important to provide better opportunities for junior researchers doing postdoctoral research in the pharmaceutical field. Joint university-business research projects promoting new industrialisation, such as biopharmaceutical development, will be supported. Students are interested in graduate schools; the number of applicants is many times greater than the number of available places. Therefore, the interviewees called for more graduate schools with a focus on the pharmaceutical industry. Examples of this are the Graduate School of Clinical Drug Research, Graduate School of Drug Development and Graduate School in Pharmaceutical Research. 4.3.1 How many professionals do we need? In the interviews performed, it was noted that the big pharmaceutical companies (Orion, Leiras, Santen) have plans to limit the increase in personnel to approximately 10–15% annually. More people will be employed particularly in R&D. Today big pharma companies employ 4000 people, in 2010 it is estimated that the figure will be at least 9000. The number of personnel in the local branches of international companies will probably remain at the present 2000. In companies in a strong growth phase, the increase in recruitment is high but its effect on total national employment figures is small, 335 people in the year 2000. However, the estimate for 2010 is at least 2500. The total number of people employed in 2010 will thus be about 14,000. The personnel needs of companies not yet founded cannot be reliably estimated but must be taken into account. A reasonable assumption is that 10 or more new drug discovery and service companies will start up annually in the next 5 or 6 years in Finland. 4.3 Future training needs in the pharmaceutical industry 4.3.2 What kind of professionals do we need more of? In the pharmaceutical industry, the challenge is to achieve the right balance between education in the basic sciences and training in the emerging areas of science and technology. It is evident that the current shortage of specific types of personnel will increase. New combinations will also be needed, e.g. bio plus IT/mathematics, biology plus entrepreneurship, pharmacy plus technology, etc. For leaders of R&D and other projects, the challenge is to find a common language between pharmacists, biologists and information technologists. For this reason, pharmacists, for instance, need more education in basic biological sciences. The proportion of business, marketing and advertising in the curricula of all students in natural and engineering sciences must be increased if they are to perform their pharmaceutical R&D duties successfully. According to the survey the pharmaceutical industry will find it difficult to recruit staff with appropriate skills particularly in new areas such as biobusiness and bioinformatics. There is going to be a shortage of engineers oriented towards pharmacy, professionals in formulation of traditional and biotechnological medicines and pharmacologists with competence in, and experience with, in vivo animal models. In addition, the pharmaceutical field needs professionals who can transform a research finding into a new drug idea and people with academic training in natural sciences and entrepreneurial attitudes. If the founding rate of new companies remains on the present level and, particularly, if the rate increases, the lack of capable company It is estimated that in 2010 the pharmaceutical industry will employ 14,000 people. Higher student intakes and more resources are needed to train these people. Their jobs are becoming increasingly international. In the future, professionals in several fields of bioscience, in addition to chemists and pharmacists, will be strongly involved in the development of new medicines. Education in molecular biology and biotechnology will become increasingly important. We must also focus on education in genomics and bioinformatics without neglecting the need for traditional professionals in formulation, clinical medicine and pharmacology. We must have enough professionals in pharmacoeconomics and pharmacoepidemiology, as well as in medical marketing, to ensure the development of the field. Connecting informatics with biosciences will create new types of enterprises and we must find professionals for the jobs. Combining different disciplines in the choice of elective studies would give the pharmaceutical industry well-trained generalists. Opportunities to specialise are also important. The competition for skilled people in mathematics and natural sciences is becoming harder. In order to persuade these people to work in the pharmaceutical field we must make its image more attractive. 41 managers may be the greatest obstacle to growth. During the first years of growth the manager needs to be familiar with the science and applications of the company. Only when the company has established its position in the market can it be managed by a professional manager without intimate knowledge of the scientific or therapeutic background. When some of today’s DDCs change into established pharmaceutical companies and start production there will also be competition for a trained workforce on the factory floor and trained assistant staff. DDCs with a strategy of selling their products at the proof-of-concept stage do not need extensive workforces in production and marketing but they still need knowledge and understanding of global production and marketing operations. To sum up, the development of knowledge in strategic marketing is a question of life and death for the Finnish pharmaceutical field! In conclusion, what kind of modifications will be needed in graduate education to prepare pharmaceutical scientists for the 21st century? According to this survey and the Workshop on Future Training Needs in Pharmaceutical Sciences, in the future students will need: • More scientific breadth to effectively communicate with scientists from other disciplines in project teams, but without sacrificing scientific depth • To participate in multidisciplinary research projects in order to develop the interpersonal skills necessary to function effectively in project teams • More opportunities to refine their written and verbal communication skills • The opportunity to use computers and computing networks so that they will be able to access and manipulate the explosion of new information • Formal courses and/or informal discussions on ethical issues that they may encounter in the course of their future professional activities • The opportunity to experience industry as part of their graduate education so that they can make more intelligent career choices • More exposure to the international scene in order to develop the social and cultural skills they will need to function effectively in this globalised industry. Universities and polytechnics should respond to the challenge by increasing their range of multidisciplinary degree programmes and adult education courses especially designed to meet the changing needs of the pharmaceutical industry. 4.3.3 Extrapolation of the changing needs to the next decade It is evident that future needs cannot be met by increasing the number of individual courses offered or by lengthening the duration of training. Training should be based on curricula with a fixed basic content and a highly flexible optional part with elective courses in a different discipline towards the end of the course. Thus, a basic knowledge of economics, for instance, would be an important asset for a scientist one day becoming an entrepreneur. In 10 years’ time, pharmaceutical companies with intense R&D activity will need 3–4 times more people with a doctorate than today. In this connection, graduate schools could take into account the needs of the pharmaceutical industry. In conclusion, new combinations will be needed alongside the above mentioned more traditional curricula. Table 9 below gives concrete examples of what the industry may need from the educational system by the year 2010 and beyond. The estimated figures are based on the number of pharmaceutical companies in 2000, their expected growth, and new companies to be established. 42 Table 9. New multidisciplinary professionals needed in the pharmaceutical industry in 2010. Combinations reflecting future needs Animal experiments & bioanalytics Biomedicine & entrepreneurship Biology & mathematics Biopharmaceutical technology Biotechnology & chemistry Chemistry & pharmacy Genetics & IT Medicine/pharmacology & genetics / molecular biology Pharmacy & engineering Pharmacy & epidemiology Pharmacy & health economics Pharmacy & marketing Estimated total Tentative professional identity Preclinical research R&D management Bioinformatics Formulation of biotechnology drugs Biotechnology drug manufacturing Drug discovery & design Data mining & bioinformatics Combination of pathogenesis with pharmacodynamics Drug manufacturing Pharmacoepidemiology Pharmacoeconomics Drug marketing No. 25 150 100 50 100 100 75 100 50 50 50 100 950 4.4 Conclusions on education In the year 2000 the pharmaceutical industry employed 6700 people. By 2010 the personnel will have more than doubled. Today, there is shortage of professionals in almost all fields of the pharmaceutical industry, and the situation is worsening all the time! It is evident that higher intakes and more resources are needed for training in biomedical sciences. Competition for professionals will get tougher. Therefore, the image of the field is important. Drug development needs generalists in quality and regulatory issues and project management. Specialists in pharmacology, molecular biology, chemistry, formulation and clinical drug trials are also required. Today, new recruits have only basic knowledge and skills and initiation in the typical characteristics of the industry (e.g. documentation, quality) takes at least 6 months. The employee is productive after 1 to 4 years. In the future, drug development will need more bioscientists to work alongside pharmacists and chemists. Combining different disciplines in the choice of elective studies would give the pharmaceutical industry well-trained generalists. The opportunity to specialise remains important, too. Graduate schools focussing on drug development must be established. Further education in the field needs to include entrepreneurial aspects. SMEs need a national support package for continuing education. The training of dedicated teachers and trainers is also a future challenge. The educational needs of the pharmaceutical industry must be continuously surveyed. Collaboration between educational establishments and industry in the planning of training should be enhanced. 43 5 Conclusions Finland has already come a long way in building a pharmaceutical industry based on scientific know-how in the medical and natural sciences. The established Finnish pharmaceutical companies (Orion Pharma, Leiras, and Santen) have in-house programmes for drug discovery, development and marketing, while several smaller start-up companies specialise in drug discovery based on the results of basic scientific work. In addition, there is a strong network of service providers and technology companies that offer outsourcing possibilities for the existing pharmaceutical companies. In their benchmarking of the Finnish pharmaceutical and biotechnology industries against a number of other growing bio-clusters in the world, SAI Healthcare77 found that aside from the university-industry links, the most promising biotechnology areas in the world have three very high growth industries: Information Technology, Biotechnology, and Venture Capital. IT and biotechnology seem to be co-evolving with the venture capital industry acting as a catalyst. Finland has a strong IT industry, an evolving biotechnology industry, and a growing venture capital industry. Thus, the ingredients seem to be there. If the growing pharmaceutical industry receives adequate support now, when there are numerous promising product candidates in the development pipelines of the companies, the industry has all the potential to become a major asset for the Finnish national economy in the future. If, on the other hand, the evolving structures of the industry are not supported, there is a danger that the strong scientific knowledge base Finland currently possesses in the medical sciences will be commercially exploited by companies in other countries. Networking and the presence of strong national core facilities are essential to obtain the critical mass needed to apply new technologies in drug development. Networking secures the exchange of information between the many different participants in drug development. Networking in the pharmaceutical industry encompasses collaboration between private companies, service providers, universities, and other industry actors. The limited size of the Finnish companies underlines the importance of collaboration. Sci- ence parks are extremely important especially for the pharmaceutical start-up companies that need a network of support services around them. The science parks have also been natural locations for pharmaceutical incubators. As a rule the biotechnology industry is concentrated in areas where strong research institutions are located. The presence of core facilities offering individual scientists and teams access to complex and expensive equipment is paramount for the development of pharmaceutical science and know-how, as well as for the emergence of spin-off companies from university research. The role of incubators in fostering academic entrepreneurship is central. Entrepreneurial spirit among Finns has remained low despite the fact that the Finnish environment for entrepreneurship has many positive attributes: a highly educated workforce, rapid economic growth, an advanced technology base, good infrastructure, and positive attitudes towards entrepreneurship. The scientific and technological basis for future growth of the Finnish pharmaceutical industry is strong. In addition to the strong basis in medical science, Finland has a strong and advanced IT community. As a result, Finland is well poised to apply and integrate IT into the biotechnology industry. This could be seen as one of the major determinants enhancing the competitiveness of the Finnish pharmaceutical network. It is interesting to note that the major strengths identified in the SWOT analysis of the Finnish pharmaceutical sector include the strong biomedical science base and technical expertise, as well as efficient networking and collaboration between public research institutions and private companies. However, the strong science base cannot cover for the lack of experienced business management the young organisations in the industry face. Typical problems of newly established small biotechnology companies include lack of expertise in company management and marketing and reliance on only one or a few individuals – typically scientists – in corporate management. Market-oriented thinking should be the driving force behind even the very first steps of pharmaceutical research and drug discovery. 77 Competitive benchmarking and strategic analysis of selected biotechnology and pharmaceutical clusters. A report to the Chemical Industry Federation of Finland (CIFF), June 2001. Prepared by SAI Healthcare. 45 It appears that there is a consensus forming that the Finnish pharmaceutical sector will prosper in the next 10 years or so, provided that the basic building blocks are in place and working efficiently. These basic building blocks are: • vigorous biomedical basic research • smooth technology transfer (basic to applied research to products and services) • funding instruments for both pharmaceutical R&D and business development • efficient networking between the different parties • fast exchange and dissemination of information in the field • specialised premises with flexible leasing arrangements • skilled and qualified personnel • collaboration and exchange of ideas between the industry, governmental bodies, and regulators. The need for trained staff who can deal with all the new disciplines and technologies related to drug development is repeatedly emphasised. Training and education are essential for the implementation of new knowledge in research, as well as for the development of interesting research results into business ideas and growing, successful businesses. The Finnish pharmaceutical industry and other life sciences industries are well positioned to benefit from the advanced information and communication technology infrastructure and know-how present in the country. Co-operative projects and networking with the IT industry should be encouraged. 5.1.2 Space to expand Spin-off companies are an important mechanism for exploiting pharmaceutical research. These companies require specialised premises with leasing arrangements that are flexible enough to meet the changing needs of the companies. Spin-offs require incubators, services, and laboratory space located close to research organisations so that scientists can continue academic work and access the laboratories easily. Incubators should provide start-up companies not only with physical premises but also with the services that these companies typically do not have in-house. 5.1.3 Entrepreneurship Too many young researchers still lack opportunities to build the skills needed for commercialising research. More knowledge about management and entrepreneurship should be made available to undergraduates and graduates in the fields of natural and medical sciences. What is more, natural and medical science studies should be made better available to those studying business. University researchers should be rewarded not only on the basis of the number and quality of their publications but also on the basis of their patent applications and commercialised research results. Excellent business ideas should be rewarded, for example by support in the form of access to advice on intellectual property protection, business planning, and fund-raising. Grants and forgivable loans would ease the burden of moving from a secure academic job to the competitive start-up environment78. 5.1 Recommendations 5.1.1 Enhancing the networks Networking is essential in today’s pharmaceutical industry. Science parks and national innovation support and technology transfer services are paramount for the future growth of the Finnish pharmaceutical industry. These organisations form a key part of the national innovation system and should receive continuous public funding. Funding organisations should further encourage and support co-operative projects carried out both within Finland and with foreign partners. The current size of the Finnish pharmaceutical industry is small in international comparison. Networking with neighbouring biotechnology and pharmaceutical centres in the Nordic region, especially in Denmark and Sweden, is of crucial importance. The promotion of a vision of a Nordic cluster that involves Finland alongside other Nordic innovation centres can provide the critical mass needed for suc78 cess . 78 See: Competitive benchmarking and strategic analysis of selected biotechnology and pharmaceutical clusters. A report to the Chemical Industry Federation of Finland (CIFF), June 2001. Prepared by SAI Healthcare. 46 5.1.4 Business development Today’s pharmaceutical business is truly global. The small size of all the Finnish pharmaceutical companies in international comparison presents a challenge of healthy growth for these companies. Finnish pharmaceutical companies should be supported in their attempts to develop a presence in international markets and in building international marketing networks. The pharmaceutical industry landscape is evolving rapidly and there is a need for companies to constantly map the changes in the markets. The establishment of, or links with, a pharmaceutical/biotechnology market and industry research agency to constantly monitor the field and report the findings to Pharma Cluster members, for example, was strongly suggested by SAI Healthcare in their analysis of 79 the Finnish pharmaceutical and biotechnology industries . 5.1.6 National innovation support policies Finland has already achieved a lot in building a pharmaceutical industry based on scientific know-how in the medical and natural sciences. The support chain from basic research through technology transfer to commercial new drugs has already proved its importance. This national support chain should be further developed and strengthened. The regulatory and fiscal framework should provide incentives that facilitate company formation and growth within the pharmaceutical industry. 5.1.7 Education In the year 2000 the pharmaceutical industry employed 6700 people. In 2010 this figure will have more than doubled. Today, there is shortage of professionals in almost all fields of the industry, and the situation is worsening all the time. In the future, drug development will need more bioscientists to work alongside pharmacists and chemists. Entrepreneurial attitude, strategic marketing and awareness of the importance of Intellectual Property Right issues are needed by all those working in pharmaceutical R&D. Graduate schools focussing on drug development must be established to provide the necessary specialists. To educate generalists, broad curricula, particularly with regard to the choice of elective courses, are needed. This should be done with collaboration between companies, polytechnics and universities. Higher intakes are needed for training in biomedical sciences. The lack of funding that the Finnish academic institutions are facing will be fatal for the development of high technology industries in the future unless action is taken immediately to overcome this problem. Immediate action is needed to ensure sufficient public funding for basic research and education in universities. 5.1.5 Funding Despite the positive development during the past years, the availability of private funding for pharmaceutical R&D in Finland is limited. Therefore, public funding for promising R&D projects has to be readily available. In this, the continuum formed by the Academy of Finland, Tekes, and Sitra has a central role. Constant development of funding instruments is needed to keep up with the changes in the international environment. Here, the Finnish parliament and government, as the authorities behind major R&D funding organisations, have a key role to play. In addition to R&D funding, the availability of public funding for the commercialisation of innovations and business development also has to be improved. Furthermore, development and strengthening of the venture capital industry is pivotal for the evolution of the Finnish pharmaceutical industry and the start-up company base. 79 See: Competitive benchmarking and strategic analysis of selected biotechnology and pharmaceutical clusters. A report to the Chemical Industry Federation of Finland (CIFF), June 2001. Prepared by SAI Healthcare 47 Appendix I Members of the steering committee of the Target Programme Lammintausta Risto, Hormos Medical, Chairman of the steering committee Bengtström Mia, Pharma Industry Finland Heinonen Esa, Orion Pharma Himmanen Anssi, Clinical Research Services Turku CRST Hirvonen Jouni T., University of Helsinki Karhuvaara Sakari / Kurkela Kauko, Contral Pharma Nylund Solveig, Tekes, the National Technology Agency of Finland Pylkkänen Jorma, Medikalla Saarinen N. Tapani, Turku Technology Centre Lähteenmäki Pekka / Sellman Raija, Leiras Veromaa Timo, BioTie Therapies 49 Appendix II Financial contributors Tekes, the National Technology Agency of Finland AboaTech Ltd Ark Therapeutics Oy BioTie Therapies Corp. Bioxid Ltd. Clinical Research Services Turku CRST Contral Pharma Ltd. Finncovery Ltd. FIT Biotech Oyj Plc. Focus Inhalation Ltd. Galilaeus Ltd Hormos Medical Ltd. Innomedica Ltd. Juvantia Pharma Ltd. Kuopio Technology Centre Teknia Ltd. Kuopio University Leiras Oy Medikalla Ltd Novagent Oy Orion Corporation ORION PHARMA Pharma Industry Finland Pharming Oy Polymer Corex Ltd. SafetyCity Ltd Santen Oy Stick Tech Ltd. Turku Technology Centre Ltd. Vetcare Ltd. 51 Appendix III Glossary These terms are generally accepted and in common use in the field Term Academy of Finland http://www.aka.fi Explanation Enhances the quality and prestige of basic research in Finland by long-term selective research funding allocated on a competitive basis, by systematic evaluation and by influencing of scientific policy. The science of informatics as applied to biological research. Informatics is the management and analysis of data using advanced computing techniques. Bioinformatics is particularly important as an adjunct to genomics research, because of the large amount of complex data this research generates. Non-viable materials used in a medical device intended to interact with biological systems. Academic top science unit of basic research and/or research training at the international forefront. They are selected by the Academy of Finland (www.aka.fi). 26 new Centres of Excellence started work at the beginning of 2000. They will receive funding for a six-year term. The primary selection criteria for a Centre of Excellence are its scientific merits, products and activity, and its research and operating plan. The research environment and the success of the unit in research training are given particular consideration. Centres of Excellence will form cores of creative research environments. The programme is dynamic, and the selection procedure is competitive. Initiative by the Ministry of the Interior to transfer spearhead applied knowledge from academia and other sources to business. The Centre of Expertise programme is an objective programme created in accordance with the Regional Development Act (1135/93). The operation began in Finland in 1994 under the Ministry of the Interior. Technology centres co-ordinate the local Centres of Expertise. The programme represents a new type of regional development strategy. The basic idea of the programme is recognition and intensification of regional strengths and special characteristics. For 1999 – 2006 14 regional and 2 network Centres of Expertise were nominated after national competition. The programme catalyses entrepreneurial activity from spearhead applied research. A clinical trial is a research study conducted in human participants to evaluate the safety and efficacy of a medicine to improve patients’ health. Clinical trials can only be started after a compound has survived rigorous pre-clinical development work, which involves laboratory testing (chemical/biological/pharmacological/toxicological). Only when these tests show favourable and promising results can a company proceed to assess the medicine in humans. A technology for creating large numbers of molecules Organisation that provides research services Bioinformatics Biomaterials Centre of Excellence Centre of Expertise Clinical trials Combinatorial chemistry Contract Research Organisation (CRO) 53 Term DDC Explanation Here: Drug discovery company In some other contexts used as abbreviation of drug delivery company Marketing directly to consumers through channels such as TV, Internet, mail advertising, etc. In the past, pharmaceutical companies focused their marketing efforts almost solely on physicians but today DTC marketing has become a major force in the selling of health care products and services. Organic chemical of complex molecular structure that is found in all prokaryotic and eukaryotic cells and in many viruses. DNA codes genetic information for the transmission of inherited traits. The structure of DNA is a double-helix polymer, a spiral consisting of two DNA strands wound around each other. Each strand is composed of a long chain of monomeric nucleotides. The representative voice of the pharmaceutical industry in Europe. Through its membership (national pharmaceutical industry associations and major companies), the EFPIA represents the common views and interests of over 2,000 pharmaceutical companies undertaking research, development and manufacturing of medical products for human use in Europe. The European system of evaluation of medicines is based on co-operation between the competent national authorities of the member states and the EMEA. The EMEA acts as the focal point of the European system. (Comparable to the FDA in the US) An industrial association of the biotechnology industry in Finland. Finnish Bioindustries represents a range of companies operating within the field of biotechnology in the chemical, food, biomaterial, pharmaceutical, diagnostics, forest and plant protection sectors. An unofficial discussion forum / organisation for companies in the Finnish in vitro diagnostic industry Direct-to-consumer marketing (DTC) DNA, deoxyribonucleic acid Efpia, European Federation of Pharmaceutical Industries and Associations http://www.efpia.org European Medicines Evaluation Agency (EMEA) http://www.eudra.org/emea.html Finnish Bioindustries (FIB) http://www.finbio.net Finnish In Vitro Diagnostic Industry Cluster (FIVDIC) http://www.medipolis.com/fivdic/ Finnish National Fund for Research and Development (Sitra) http://www.sitra.fi An independent public foundation under the supervision of the Finnish Parliament. The Fund aims to promote Finland’s economic prosperity by encouraging research, backing innovative projects, organising training programmes and providing venture capital. An association that aims at developing venture capital activities and practises in Finland. Members include equity investors and risk financiers representing public and private investment capital, captive funds and corporate ventures. A US consumer protection agency that monitors the manufacture, import, transport, storage and sale of food, cosmetics, medicines, medical devices, etc. Includes the Center for Drug Evaluation and Research. Canada, France, Germany, Italy, Japan, United Kingdom and the US. An off-patent medicine. Until the patent expires, only the company that discovered the new medicine may produce it. After patent expiry any company may produce the same generic compound. The complete set of instructions for making an organism is called its genome. It contains the master blueprint for all cellular structures and activities for the lifetime of the cell or organism. Found in every nucleus of a person’s many trillions of cells, the human genome consists of tightly coiled threads of deoxyribonucleic acid (DNA) and associated protein molecules, organised into structures called chromosomes. Finnish Venture Capital Association FVCA http://www.fvca.fi Food and Drug Administration (FDA) http://www.fda.gov G7 countries Generic drug Genome 54 Term Genomics Explanation The study of genes and their function. Recent advances in genomics are bringing about a revolution in our understanding of the molecular mechanisms of disease, including the complex interplay of genetic and environmental factors. Good Clinical Practice (GCP) is an international ethical and scientific quality standard for designing, conducting, recording and reporting trials that involve the participation of human subjects. Compliance with this standard provides public assurance that the rights, safety and well-being of trial subjects are protected and that the clinical trial data are credible. Pertaining to a biochemical process or reaction taking place in a test-tube (or more broadly, in a laboratory) as opposed to taking place in a living cell or organism. Compare in vivo. Pertaining to a biological process or reaction taking place in a living cell or organism. Compare in vitro. The process of answering a biological question using a computer, for example modelling of a molecule. Does not involve laboratory work. Synonymous with flotation. A process where a company seeks listing for, or floats, its shares on a stock exchange for the first time. Field of science concerned with studying the chemical structures and processes of biological phenomena at the molecular level The main financing organisation for applied and industrial R&D in Finland. The funds for financing are awarded from state budget. A new chemical substance that is identified as having the potential to become a novel drug. Organisation that represents companies manufacturing, marketing and/or researching medicinal products in Finland. Members represent research-based, generic, OTC and veterinary pharmaceutical industry. 66 member companies. The Finnish Pharma Cluster is a long-term development project of the national centre of expertise programme that facilitates the emergence and development of a new pharma business network in Finland. It also serves as a contact forum that promotes the partnering of the Finnish pharmaceutical SMEs and service providers participating in the development of new drugs for the health care market. The study of heritable traits affecting patient response to drug treatment. The use of genomic techniques in pharmacology and drug development. The study of proteins that are encoded by the genes of an organism (or of a cell or tissue in a multicellular organism). Proteomics is complementary to genomics because it focuses on the gene products, which are the active agents in cells. An industrial development suited to accommodate high technology, with supporting amenities, which is associated with a higher educational research establishment on site or close by to provide cross-fertilisation of ideas between entrepreneurs and researchers. Good Clinical Practice (GCP) In vitro In vivo In silico Initial public offering (IPO) Molecular biology National Technology Agency (Tekes) http://www.tekes.fi New chemical entity (NCE) Pharma Industry Finland http://www.pif.fi Pharma Cluster Pharmacogenetics Pharmacogenomics Proteomics Science park 55 Term Spin-off Explanation a) First stage spin-off companies are based on the research expertise within academic institutions, continuing the development as commercially exploitable products, processes or services. b) A separate company formed from parts of an existing company. Undifferentiated, primitive cells in the bone marrow with the ability both to multiply and to differentiate into specific blood cells. Industrial value production has been conceptualised in terms of the value chain. The concept of the value chain was introduced by Porter in the 1980’s. The value chain configuration is a two-level taxonomy of value creation activities. The main assumption lying behind the concept of the value chain is that a product is a prefabricated package of traits in which the competencies of a company are embedded. Stem cells Value chain 56 Appendix IV List of Science Parks and Centres of Expertise Science Parks, TEKEL members (http://www.tekel.fi/eindex.htm) Espoo Otaniemi Science Park Ltd. Managing Director Lauri Ylöstalo Tekniikantie 17, FIN-02150 Espoo Tel. + 358 9 437 5200 Fax + 358 9 455 3117 E-mail lauri.ylostalo@innopoli.fi Joensuu Carealian Science Park Ltd. Managing Director Ari Hakkarainen Länsikatu 15, FIN-80110 Joensuu Tel. + 358 13 263 7230 Fax +358 13 263 7111 E-mail ari.hakkarainen@carelian.fi Kuopio Kuopio Technology Centre Teknia Ltd. Managing Director Hannu Janhunen P.O. Box 1188, FIN-70211 Kuopio Tel. + 358 17 441 2000 Fax + 358 17 441 2011 E-mail hannu.janhunen@teknia.fi Oulu Technopolis Plc. Managing Director Pertti Huuskonen Elektroniikkatie 8, FIN-90570 Oulu Tel. + 358 8 551 3211 Fax + 358 8 551 3210 E-mail pertti.huuskonen@technopolis.fi Turku Turku Technology Centre Ltd. Managing Director N. Tapani Saarinen P.O. Box 102, FIN-20521 Turku Tel. + 358 2 410 1600 Fax + 358 2 410 1610 E-mail niisaa@dcc.utu.net Helsinki Helsinki Science Park Ltd. Managing Director Kai Falck Viikinkaari 6, FIN-00710 Helsinki Tel. + 358 9 1915 8700 Fax +358 9 1915 8704 E-mail kai.falck@helsinki.fi Jyväskylä Jyväskylä Science Park Ltd. Managing Director Esko Peltonen P.O. Box 27, FIN-40101 Jyväskylä Tel. + 358 14 445 1100 Fax + 358 14 445 1199 E-mail esko.peltonen@jsp.fi Lappeenranta Technology Centre Kareltek Inc. Managing Director Marjut Hannelin Laserkatu 6, FIN-53850 Lappeenranta Tel. + 358 5 624 3011 Fax + 358 5 412 0949 E-mail marjut.hannelin@kareltek.fi Tampere Tampere Technology Centre Ltd. Hermia Managing Director Olli Niemi Hermiankatu 6-14 A, FIN-33720 Tampere Tel. + 358 3 316 5550 Fax + 358 3 316 5552 E-mail olli.niemi@hermia.fi Vaasa Technology Center Merinova Ltd. Managing Director Yrjö Halttunen P.O. Box 810, FIN-65101 Vaasa Tel. + 358 6 282 8200 Fax + 358 6 282 8299 E-mail yrjo.halttunen@merinova.fi 57 Espoo Culminatum Ltd. Managing Director Kari Ruoho Tekniikantie 12, FIN-02150 Espoo Tel. + 358 9 2517 2000 Fax +358 9 502 2870 E-mail kari.ruoho@culminatum.fi Kajaani Kajaani Science Park Ltd. Managing Director Jarmo Juntunen Kehräämöntie 7, FIN-87400 Kajaani Tel. + 358 8 614 9301 Fax + 358 8 614 9205 E-mail jarmo.juntunen@kajaani.fi Oulu Medipolis Ltd. Managing Director Saara Lampelo Kiviharjuntie 11, FIN-90220 Oulu Tel. + 358 8 537 2000 Fax + 358 8 537 2010 E-mail saara.lampelo@otm.fi Seinäjoki Foodwest Ltd. Managing Director Antti Väliaho Vaasantie 1 C, FIN-60100 Seinäjoki Tel. + 358 6 421 0000 Fax + 358 6 421 0020 E-mail antti.valiaho@foodwest.fi Jokioinen Agropolis Ltd. Managing Director Matti Hurri FIN-31600 Jokioinen Tel. + 358 3 4186 7381 Fax + 358 3 4186 7382 E-mail matti.hurri@agropolis.fi Lahti Neopoli Ltd. Managing Director Markku Sinkkonen Niemenkatu 73, FIN-15140 Lahti Tel. + 358 3 811 4200 Fax + 358 03 883 3000 E-mail markku.sinkkonen@neopoli.fi Pori PrizzTech Ltd. Managing Director Risto Liljeroos Tiedepuisto, FIN-28600 Pori Tel. + 358 2 627 1100 Fax + 358 2 627 1101 E-mail risto.liljeroos@prizz.fi Tampere Finn-Medi Research Ltd. Managing Director Matti Eskola Lenkkeilijänkatu 6, FIN-33520 Tampere Tel. +358 3 247 4023 Fax + 358 3 247 4029 E-mail matti.eskola@finnmedi.fi 58 Centres of Expertise (http://www.intermin.fi/suom/oske/en/osket.html) JYVÄSKYLÄ REGION CENTRE OF EXPERTISE Information Technology Control of Paper Production Energy and Environmental Technology www.jsp.fi SOUTH-EAST FINLAND CENTRE OF EXPERTISE High Technology Metal Structures Key Systems for the Forest Industry Logistics and Expertise on Russia www.kareltek.fi www.lut.fi http://www.intermin.fi/suom/oske/en/ - alku VIRTUOSI - CENTRE OF EXPERTISE FOR CHAMBER MUSIC KUHMO Chamber Music www.kuhmofestival.fi http://www.intermin.fi/suom/oske/en/ - alku KUOPIO REGION CENTRE OF EXPERTISE Pharmaceutical Development Health Care Technology Agrobiotechnology www.teknia.fi http://www.intermin.fi/suom/oske/en/ - alku LAPLAND CENTRE OF EXPERTISE FOR THE EXPERIENCE INDUSTRY The Experience Industry http://www.intermin.fi/suom/oske/en/ - alku CENTRE OF EXPERTISE FOR WESTERN FINLAND Energy Technology and Economy www.merinova.fi/suomi.html http://www.intermin.fi/suom/oske/en/ - alku OULU REGION CENTRE OF EXPERTISE Information Industry Medical Technology Biotechnology www.otm.fi/fi http://www.intermin.fi/suom/oske/en/ - alku NORTH KARELIA CENTRE OF EXPERTISE Wood Technology and Forestry Polymer Technology and Tooling www.carelian.fi http://www.intermin.fi/suom/oske/en/ - alku LAHTI REGION CENTRE OF EXPERTISE Design, Quality and Ecology www.neopoli.fi/oske.htm http://www.intermin.fi/suom/oske/en/ - alku SATAKUNTA CENTRE OF EXPERTISE Materials Technology Distance Technology www.prizz.fi http://www.intermin.fi/suom/oske/en/ - alku SEINÄJOKI REGION CENTRE OF EXPERTISE FOR THE FOOD INDUSTRY AND FOOD TECHNOLOGY Food Development www.foodwest.fi http://www.intermin.fi/suom/oske/en/ - alku TAMPERE REGION CENTRE OF EXPERTISE Mechanical Engineering and Automation Information and Communication Technology Media Services Health Care Technology www.expertise.tampere.fi http://www.intermin.fi/suom/oske/en/ - alku HELSINKI REGION CENTRE OF EXPERTISE Active Materials and Microsystems Gene Technology and Molecular Biology Cultural Industry Software Product Business New Media www.culminatum.fi http://www.intermin.fi/suom/oske/en/ - alku SOUTH-WEST FINLAND CENTRE OF EXPERTISE Biomaterials, Diagnostics and Pharma Development Materials Surface Technology Cultural Content Production www.turkutechnologycentre.com http://www.intermin.fi/suom/oske/en/ - alku CENTRE OF EXPERTISE FOR WOOD PRODUCTS http://www.intermin.fi/suom/oske/en/ - alku CENTRE OF EXPERTISE FOR FOOD DEVELOPMENT www.agronetti.fi/elonetti/osaamiskeskus 59 Appendix V Members of Pharma Cluster Abmin Technologies Ltd Åbo Akademi University AboaTech Ltd Addoz Oy A.I. Virtanen Institute Ark Therapeutics Oy Berggren Group (Patents office)l BioCity Turku Biodeus Oy Biofons Oy BioFund Management Oy BioLigand Oy Biomedicum Helsinki Bionx Implants BioSolutions INT BioTie Therapies Corporation Biotop Oy Bioxid Oy Carbion Oy Cell Test Turku Oy Cellomeda Oy Centre for Biotechnology Clinical Research Institute HUCH Ltd Contral Pharma Oy Ltd Danske Securities EIM Ltd Finland Oy Erilab Oy FibroGen Europe Oy FIM Securities Ltd Finncovery Oy Finnish Bioindustries Finn-Medi FIT Biotech Oyj Plc Focus Inhalation Oy Galena Oy Galilaeus Oy Haartman Institute Helsinki Science Park Ltd Helsinki University Central Hospital Helsinki University of Technology, Department of Chemical Technology www.abmintech.fi www.abo.fi www.aboatech.fi www.addoz.com www.uku.fi www.arktherapeutics.com www.berggren.fi www.btk.utu.fi www.biodeus.com www.biofons.com www.biofund.fi www.bioligand.com www.helsinki.fi www.bionximplants.fi www.biosolutionsint.com www.biotie.com www.biotop.fi www.carbion.net www.celltestturku.fi www.abo.fi/~klonnqvi/ www.btk.utu.fi www.hus.fi www.contralpharma.com www.danskesecurities.com www.eim.fi www.erilab.fi www.fibrogen.com www.fimi.fi www.finncovery.com www.finbio.net www.finnmedi.fi www.finnish-immunotech.com www.focusinhalation.com www.galena.fi www.galilaeus.fi www.helsinki.fi www.sciencepark.helsinki.fi www.huch.fi www.hut.fi 61 Hi-Col Oy H.Lundbeck A/S Hormos Medical Oy Ltd Innomedica Oy Institute of Biotechnology Juvantia Pharma Oy Ltd Kuopio Technology Centre Teknia Oy Labmaster Oy Leiras Oy Licentia Oy Lividans Oy Mandatum Stockbrokers MCA Laboratories Medfiles Oy Ltd Medfiles Pharma Oy Ltd MediFront Oy Medikalla Ltd Medipolis Oy Ministry of Trade and Industry Mycogen Oy National Agency for Medicines Novagent Oy Novatreat Oy Orion Corporation, Orion Diagnostica Orion Corporation, Orion Pharma Peucetius Oy Pharma Industry Finland Polymer Corex PricewaterhouseCoopers Oy Quintiles Oy Remedium Oy SafetyCity Oy Santen Oy Sitra, Finnish National Fund for Research and Development Stick Tech Oy Ltd TE Centre for North Savo, Technology Unit TE Centre for Varsinais-Suomi, Technology Unit Tekel, Finnish Science Park Association Tekes, National Technology Agency Tess-Finland Oy Turku Area Development Centre Turku Centre for Biomaterials Turku PET Centre Turku Polytechnic www.hi-col.fi www.lundbeck.com www.hormos-med.com www.innomedica.fi www.helsinki.fi www.juvantia.com www.teknia.fi www.labmaster.fi www.leiras.fi www.licentia.fi www.lividans.com www.mandatum.fi www.medfiles.fi www.medfiles.fi www.medifront.fi www.medfiles.fi www.medipolis.com www.ktm.fi www.nam.fi www.novatreat.com www.oriondiagnostica.fi www.orionpharma.com www.pif.fi www.uku.fi www.pwcglobal.com www.quintiles.com www.remedium.fi www.santen.fi www.sitra.fi www.sticktech.com www.te-keskus.fi www.te-keskus.fi www.tekel.fi www.tekes.fi www.turunseutu.net www.utu.fi/research/bmk/ www.utu.fi/med/pet/ www.turkuamk.fi 62 Turku School of Economics and Business Administration / Innomarket Turku Technology Centre Ltd Turun Biolaakso Oy University of Helsinki University of Kuopio University of Tampere, Faculty of Medicine University of Turku University of Turku, Clinical Research Services Turku CRST University of Oulu www.tukkk.fi/innomarket www.turunteknologiakeskus.fi www.helsinki.fi www.uku.fi www.uta.fi www.utu.fi www.crst.utu.fi www.oulu.fi Vetcare Oy VTT Biotechnology VTT Information Technology www.vetcare.fi www.vtt.fi www.vtt.fi 63 Technology Reviews from Tekes 113/2001 Critical Success Factors in Biopharmaceutical Business: A Comparison Between Finnish and Californian Businesses. 23 p. Tanja Rautiainen 112/2001 Finnish Pharma Cluster – Vision 2010, Target Programme initiated by the Finnish Pharma Cluster. 65 p. Malin Brännback, Pekka Hyvönen, Hannu Raunio, Maija Renko, Riitta Sutinen 111/2001 Uuden tietotekniikan vaikutukset liiketoimintaan. 60 s. Jyrki Ali-Yrkkö,Kim Jansson, Iris Karvonen, Veli-Pekka Mattila, Juha Nurmilaakso, Martin Ollus, Iiro Salkari, Pekka Ylä-Anttila 110/2001 Digitaalinen verkostotalous – Tietotekniikan mahdollisuudet liiketoiminnan kehittämisessä. 86 s. Juha Luomala, Juha Heikkinen, Karri Virkajärvi, Jukka Heikkilä, Anne Karjalainen, Anri Kivimäki, Timo Käkölä, Outi Uusitalo, Hannu Lähdevaara 109/2001 Ohjelmistoalan tutkimustoiminta Yhdysvalloissa. Veikko Seppänen, Timo Käkölä, Olli Pitkänen, Reijo Sulonen, Markku Sääksjärvi 108/2001 Software Business Models, A Framework for Analyzing Software Industry. Risto Rajala, Matti Rossi, Virpi Kristiina Tuunainen and Santeri Korri 107/2001 State of Mathematical Modelling and Simulation in the Finnish Process Industry, Universities and Research Centres. 95 s. Kimmo Klemola, Ilkka Turunen 106/2001 Research and technology programme activities in Finland. 54 s. Ellen Tuomaala, Satu Raak, Erkki Kaukonen, Jyrki Laaksonen, Mika Nieminen, Pekka Berg 105/2001 Tutkimus- ja teknologiaohjelmatoiminta Suomessa. 50 s. Ellen Tuomaala, Satu Raak, Erkki Kaukonen, Jyrki Laaksonen, Mika Nieminen, Pekka Berg 104/2001 Matemaattiset menetelmät suomalaisten yritysten t&k-toiminnassa. Heikki Haario, Matti Heiliö, Jari Järvinen, Pekka Neittaanmäki 103/2001 Hyvinvointi- ja terveysalan teknologia- ja palvelutuotteet. 64 s. Niilo Saranummi 102/2001 Jätehuollon ja materiaalikierrätyksen teknologiat ja niiden kehittämistarpeet. 44 s. Juhani Anhava, Esa Ekholm, Erkki Ikäheimo, Karri Koskela, Mikko Kurvi, Marko Walavaara 101/2000 Infrarakentamisen ja -palveluiden kehitysnäkymät. INFRA-teknologiaohjelman tarveselvitys. 38 s. Laura Apilo 100/2000 Kartoitus pienhiukkastutkimuksesta Suomessa. 43 s. Jorma Jokiniemi, Mikael Ohlström, Markku Kulmala, Kaarle Hämeri 99/2000 98/2000 97/2000 96/2000 95/2000 94/2000 93/2000 Evaluation of the Dutch and Finnish Situation of Energy Recovery from Biomass and Waste. Ronald de Vries, Ronald Meijer, Lassi Hietanen, Elina Lohiniva, Kai Sipilä Kohti yksilöllistä mediamaisemaa. 120 s. Kuluttajatutkimukset-hanke (Kultu) Content Generation in the Wireless Space with a Focus on Southern California. 64 p. Tuomas Pollari, Veikko Valli By-products in Earth Construction - Assessment of Acceptability. Metsäklusterin tulevaisuusskenaariot. 68 s. Tarja Meristö, Jyrki Kettunen, Christine Hagström-Näsi Sähkö- ja elektroniikka-alan palvelujen kysynnän ja tarjonnan kohtaamisesta. 49 s. Krista Laine, Heli Penttinen ja Anna Kotsalo-Mustonen Sivutuotteet maarakenteissa, Käyttökelpoisuuden osoittaminen. 86 s. U-M. Mroueh, M. Wahlström, E. Mäkelä, P. Heikkinen, R. Salminen, M. Juvankoski, M. Tammirinne, J. Kauppila, J. Sorvari By-products and Recycled Materials in Earth Structures – Materials and Applications. 96 p. www.tekes.fi/eng/publications 92/2000 Subscriptions: 65