A Revolution in R&D

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54 other—often literally—on collaborative projects or in formal discovery partnerships. And genetics requires far closer collaboration between basic research and development than ever before. One excellent example of rethinking traditional organizational structure and boundaries is GlaxoSmithKline. Alert to the impact of scale, the company has on the one hand consolidated functions where scale and coordination provide a clear advantage, and on the other, engaged in decentralizing where size and complexity could prove a drawback. Specifically, prompted by the scale benefits, the company decided to organize centrally both the front end and the back end of R&D (that is, target discovery and full development). For the steps in between, conversely, where the company’s enormous scale would risk encumbering innovation, it has established smaller, more autonomous centers of excellence (based on different therapeutic areas), which attempt to simulate the feel of smaller biotech companies. The Entire Corporation. So, enhanced control of data and increased cross-functionality of personnel are set to change the structure and tone of the R&D department. But their sphere of operation is broader than that. As with the strategic issues discussed earlier, the company as a whole is implicated. New lines of communication, and possibly new chains of command, will need to be extended between R&D and other units. In particular, the relationship between R&D and marketing will be fundamentally transformed: with R&D facing greater choice and placing bigger bets earlier than ever, commercial input will be crucial. And pharmacogenetics will require new ways of thinking about markets, competitors, and customers. (Pharmacogenetics may also inspire new linkages between pharmaceutical and diagnostic units for corporations that have both). Coordinating the commercialization process between R&D and marketing has always been a delicate balancing act. Most biopharmaceutical companies have established product development project teams to drive the process. These cross- functional teams are charged with developing product strategy and coordinating the various functions as products progress from R&D into the market. The job has now become even more complex and tricky, owing to larger global efforts, greater information flow, more specialized functions, and increased liaison with global strategic marketing (especially when companies consider the options for applying pharmacogenetics to molecules in development). Beyond the Corporation. Finally, new partnership models need to be considered. Although traditionally organized partnerships are still appropriate in many cases, new and more flexible forms of alliance will sometimes be required, notably when it comes to collaborating with academic or not-for-profit institutions and to joining horizontal networks or consortia. R&D Governance One potential source of gain in R&D is improved decision making. Consider again the example at the start of the value chain—the glut of identified targets and the need to decide which ones should proceed to the next phase. Genomics technologies have created this quandary, but they have also provided the means for solving it. Using new genomic methods of “aptitude-testing,” decision makers can confidently preselect the most promising targets and forward them downstream. Even decisions unrelated to genomics technologies stand to improve, since the new genomics regimen fosters a culture of rigorous selection criteria. In fact, one of the most important, though perhaps least noted, benefits of genomics is the way it encourages a thorough rethinking of decisionmaking processes. New kinds of data now present themselves for interpretation, and they enter the calculations earlier and in greater abundance than the old kinds did. And R&D decision makers have to take into account a new set of factors too, beyond the confines of R&D, in order to maximize value—factors such as marketing and IP implications, for example.
CASE STUDY: REDESIGNING R&D GOVERNANCE A large drug company recently completed an intensive three-month project to redesign discovery governance and is already reaping the benefits. The company had always placed a high value on the quality of its scientists and their entrepreneurial drive. Now, however, it was growing increasingly dissatisfied with its existing system of allocating resources: the decision-making procedures were proving very troublesome to navigate, decision makers were difficult to identify, communication was poor, and the decisions themselves often seemed politically motivated rather than guided by scientific and commercial promise. In redesigning the decision-making procedures, the company began with a thorough review of its current governance process, both as espoused and as practiced (the two were remarkably distinct in certain instances). Various root causes of undesirable outcomes were identified: these included perverse incentives (that is, incentives encouraging behavior Managing Organizational Change With the advent of genomics, R&D personnel suddenly find themselves in alien territory. As the scientific methods change, the old instinctive approaches and behaviors need to change as well. Among the greatest challenges facing R&D executives is managing the human side of change. How the Scientist’s Job is Changing R&D science is shifting from an arena of experimentation to one increasingly concerned with theoretical biology. The challenge is now less how to get the data than what to do with the data collected. Scientists who formerly could do their jobs virtually on their own—conduct their own experiments, and generate and analyze the data themselves—now find they need to collaborate with others who have more specialized technological skills, in areas such as informatics, robotics, or microfabrication. Indeed, the scientists of the pre-genomics era are destined to evolve into two kinds of successors: at odds with company strategy); unclear criteria, which project champions were disinclined to clarify, let alone follow; and inadequate allocation of decision rights (that is, too vague a definition of who was entitled to make which decisions), which often meant that no decision was made at all. From the lessons learned, a new governance process was devised. Not just devised, but activated: by modifying incentives, the company ensured that practice was now properly aligned with espousal. The new process is working well: R&D managers navigate it easily, and decisions are being made and communicated clearly and consistently. It allows scientists more time to focus on their projects, and it gives those projects appropriate funding and management involvement. It has accordingly won the confidence of those affected by it, and can claim a considerable contribution to the marked improvement in productivity that has followed its adoption. those who interpret the data and devise plans for exploiting it, and those who continue to develop and optimize the technologies required for generating the data. (Companies should be sure to recognize and reward the latter group for its contributions, and not relegate it to second-class status.) All scientists will need to become comfortable with new ways of working together—more sharing or collectivist now, less conducive to solitary initiative. The scientists of the future will still take responsibility for their own work, but perhaps will no longer take the credit for it: that will be ascribed to team effort. Managing the Transition Changing from bench-based to information-based work in this way, and from favoring fairly independent endeavors to promoting a more collaborative ethos, is bound to be awkward or even painful for most of those involved, scientists and managers alike. 55
Page 1 and 2:
A Revolution in R&D HOW GENOMICS AN
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A Revolution in R&D HOW GENOMICS AN
Page 5 and 6: Table of Contents ABOUT THE AUTHORS
Page 7 and 8: Foreword To meet growth targets, ph
Page 9 and 10: cogenetics). The productivity gains
Page 11: Introduction Throughout the pharmac
Page 14 and 15: 12 The Opportunities What is the im
Page 16 and 17: 14 and generally helping to optimiz
Page 18 and 19: 16 Cellomics are well positioned to
Page 20 and 21: 18 trials, if the company were able
Page 22 and 23: 20 almost to that of more familiar
Page 24 and 25: 22 UPSTART START-UPS—THE COMPETIT
Page 26 and 27: 24 Chapter 2: The Impact of Genetic
Page 28 and 29: 26 genetics-based form of pharmacog
Page 30 and 31: 28 DISEASE GENETICS—VARIOUS APPRO
Page 32 and 33: 30 Efficiency improvements in targe
Page 34 and 35: 32 duce targets high in quality but
Page 36 and 37: 34 would be excluded from the trial
Page 38 and 39: 36 Given these technological limita
Page 40 and 41: 38 Side-effect-based pharmacogeneti
Page 42 and 43: 40 moves, along with the relative s
Page 44 and 45: 42 POTENTIAL SAVINGS—FROM THEORET
Page 46 and 47: 44 ogy—to discover new drugs. Bro
Page 48 and 49: 46 INDUSTRY CHANGES The genomics la
Page 50 and 51: 48 Selecting Technologies According
Page 52 and 53: 50 tions, interfaces, and so on. Th
Page 54 and 55: 52 CASE STUDY: REDISCOVERING DISCOV
Page 58 and 59: 56 The formidable operational and o
Page 61 and 62: Methodology The many diverse studie
Page 63 and 64: The Boston Consulting Group publish
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