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The Impact of Licensing on Portfolio Management Rob Hockney Ph.D. Director Global Discovery Alliances AstraZeneca SMI Pharmaceutical Portfolio and Product Life-Cycle Management Conference 19th &20th June, 2006 Millennium Gloucester Hotel, London Outline Why this is important Late stage vs. Early stage licensing Opportunities Determining impact and managing risk Benefits and ongoing challenges Big Pharma – Meeting Future Unmet Need Living longer Obesity epidemic Smoking addiction Stress • From symptomatic control to disease modification and prevention • From ‘one size fits all’ to Personalised Medicine • Biopharmaceuticals AZ R&D investment, $m 3,500 3,451 3,000 3,069 2,500 2,687 2,000 1,500 1,000 500 0 2001 2002 2003 Investment as 16.6% 17.2% 18.3% % of sales High Attrition – A Constant Challenge Toxicology 23% Efficacy Only 7% of candidate drugs Other 22% become products!! (incl. DMPK) 20% Portfolio 23% Big Pharma – A View of the Future External DEVELOPMENT Unmet Alliances PIPELINE Medical Need Big Pharma – Today and An Alternative View of the Future Internal Discovery DEVELOPMENT Unmet Engine PIPELINE Medical Need External Alliances Late vs. Early Stage Licensing Internal Discovery DEVELOPMENT Engine PIPELINE Improving Portfolio Productivity: The 4Rs Strategic Actions Toxicology • Right disease mechanism 23% (Discovery Medicine) Efficacy • Right patient 22% (Disease stratification and Other (incl. DMPK) personalised medicine) 20% • Right compound Portfolio (Front-loading/Lead 23% generation/optimisation) • Right strategic fit (Portfolio management) Only 7% of candidate drugs become products!! AstraZeneca – Today and Tomorrow Internal Discovery DEVELOPMENT Unmet Engine PIPELINE Medical Need Discovery Development Technology Compounds Research Alliances Understanding disease mechanisms via high resolution phenotyping Unprecedented opportunities to characterise the disease state Discovery Medicine - 3Ms Integrating patient and pre-clinical information Mechanism: New targets from human tissues validation – early data in man Model: Translational disease models animals -> man Marker: Predictive response: Efficacy, safety, appropriate patient populations clinical benefits > side effects Disease re-classification via pharmacogenomics - proteomics Gene expression Protein expression erbB2 VEGF S100P crk diagnosis: responder/non-responder Front-loading DMPK & toxicology • Earlier DMPK & toxicity studies, development of bio-markers including efficient hERG screen • Predictive modelling of DMPK & toxicity Compound design Modelling PK Modelling whole-body & dose kinetics Beyond Essen Cytokinetics Genomics AstraZeneca – Today and Tomorrow Internal Discovery DEVELOPMENT Unmet Engine PIPELINE Medical Need Discovery Development Technology Compounds Research Alliances AstraZeneca – The Importance of Alliances Conaris Procardis Cytokinetics Shanghai Schering Beyond Genomics Oxford CAT Kudos Perlegen Essen Abgenix Right disease Right Patient Right Compound mechanism Array Curie Neogenesis AtheroGenics Astex Biosignal Protherics NPS NPS Abraxis Astex Array Dainippon Mapping Alliances to the Portfolio Discovery Alliances MS 1 2 3 4 5 FTIM 5.5 6 7 8 9 Discovery Pipeline Development Pipeline TG 1 1.5 2 2.5 3 4 5 DISCOVERY LED DEVELOPMENT LED GMBD LED Compound Licensing Assessing Alliance Impact on the Discovery Portfolio • How, by how much, where (which MS transitions) and when is the Alliance expected to impact Discovery Pipeline KPIs? (Volume, Capacity, Time, Cost, Quality, Value) • What is the probability that these benefits will be realized? A set of KPI-based, probability adjusted impact and value statements for each alliance in the context of the AZ R&D portfolio model. Portfolio Modelling • Portfolio impacts – changes to capacity; and operational costs and effect on number and timing of milestone 3 Results transitions from MS1 through to FTIM 2 (potentially MS7) 1 Assumptions Alliance Impact Shape Describing key attributes of Investments 'Six Parameter' Key Performance Indicator Framework Risk adjusted volume/ quality/time/cost/ capacity/value Benefits Clear description of investment impacts on portfolio Comparison of dissimilar investments Inter-conversion of pipeline impacts and $ value Decision making is better informed Impacts negotiation and price to pay Enables and improves scenario planning at all stages Clear linkage to business planning Transparency of benefits accruing from external investments Facilitates and empowers alliance management Ongoing Challenges Cultural systematics in an entrepreneurial industry The Impact of Licensing on Portfolio Management Thank You SMI Pharmaceutical Portfolio and Product Life-Cycle Management Conference 19th &20th June, 2006 Millennium Gloucester Hotel, London
"Impact of licensing on portfolio management - Getting you more "