A Revolution in R&D

esourced in relation to the flow from upstream,
and hence wasteful once again. It will take some
adroit adjustment of resources and processes along
the value chain to restore a smooth flow.
This imbalance will affect incumbents—integrated
companies with established value chains—worst of
all. They have resources and processes in place;
changes are likely to be difficult and disruptive. To
implement the new genomics technologies is troublesome
enough, but then to have to redistribute
resources along the entire value chain will take real
determination. (To other companies, by contrast,
bottlenecks might represent very favorable opportunities.
In particular, genomics companies could
benefit. (See sidebar, “Upstart Start-ups—the
Competitors Classified.”)
The Human Factor
To flourish in the new genomics era, and possibly
even to survive, companies are going to have to
engage the new realities. It will not be easy. Some of
the new technologies will tend to overstretch or
even defy existing capabilities and organizational
structures. All along the value chain, processes and
resources are going to have to be adjusted.
The resources in question include human resources,
and retrenching, reassigning, or supplementing talented
personnel is a far from straightforward procedure.
But it will have to be done. Organizational
restructuring is likely to entail distressing upheavals
for corporate culture and personnel alike. The
strategies adopted for managing it will require constant
monitoring and fine-tuning. New modes of
cross-functional collaboration may need to be instituted,
new incentives offered, and so on.
I spend half my time looking for talent that isn’t
out there, and the other half worrying where they
would fit if I found them.
—Research director,
leading biotech company
* * *
In sum, implementing genomics technology will be
very tricky. It will almost certainly require a holistic,
cross-value-chain perspective. We will discuss potential
solutions to these operational challenges in the
third chapter.
A Final Word
By engaging affirmatively with the brave new
genomics world, companies are making it possible
to increase R&D productivity substantially. They will
bring to bear an array of industrialized processes,
informatics, and rich data sets—a formidable combination
that promises to boost efficiency, and even
improve success rates, all along the value chain.
Here we have discussed both the opportunities and
the challenges that arise when a company adopts
and implements genomics technologies that are
available today.
The opportunities add up to potential savings of
nearly $300 million per drug—about one-third of
the cost—and the prospect of bringing each drug
to market two years sooner. The challenges include
managing quality control and dealing with unfamiliar
operational predicaments: bottlenecks along the
pipeline and a host of organizational difficulties.
But for companies that choose not to meet the
genomics revolution head on, the challenge is even
greater: they will be unable to compete. These companies
do more than leave money on the table.
They face the inevitability of being left behind.
To reap maximum benefit from the new technologies,
companies will need to scrutinize their resources,
processes, and policies throughout the
value chain. Pharmaceutical and biotech managers
will need to ask themselves some taxing questions as
they begin to formulate their genomics strategy:
• Which specific genomics technologies and
approaches make the most sense for our company?
What investments and capabilities would be
needed to integrate these new technologies and
approaches successfully?
• What capabilities do we already have? What
investment are we prepared to make to acquire
those we lack?
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