A Revolution in R&D

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6 Executive Summary In the pharmaceutical industry’s struggle to reach the levels of growth expected of it, one of its key aims will be to increase R&D productivity. And a key means of meeting this challenge is to adopt some of the new technologies and approaches broadly defined as genomics. 1 That is bound to be a complicated, perilous, and often painful process, but if companies get their strategy right and overcome the obstacles, they could, in the best case, as much as halve the cost of drug development. The report is divided into three parts. The Impact of Genomics The first great advance of the genomics era is in technology—above all, the integration of new highthroughput techniques with powerful new computing capabilities. The new technologies are active throughout R&D, most immediately at the drug discovery stage, and promise to enhance productivity by boosting efficiency. The staggering investment needed to develop a drug—$880 million and 15 years is the pregenomics average—could be reduced by as much as $300 million and two years by applying genomics technologies. Productivity gains would be realized at every step in the value chain. Potential obstacles abound, however. In particular, two broad challenges must be met to realize the savings: •Target quality must be maintained. Pursuing new target classes could involve unfamiliar costs initially, and these could delay the rewards—though only temporarily. But to jeopardize target quality by withholding that early investment would be to risk higher failure rates downstream, and that would involve far greater costs in the end. • Bottlenecks must be eased. Owing to the unevenness of the efficiency gains at different steps in the value chain, the pipeline’s flow will be impeded at various chokepoints. If the requisite action is taken, an even flow should be restored and the promised rewards should be safeguarded. The Impact of Genetics The second great advance of the genomics era is in the quantity and quality of data. From the data, invaluable information about individuals’ genetic variation can be extracted and exploited. In pharmaceutical R&D, genetics will be applied particularly to two tasks: identifying genes whose carriers are susceptible to specific diseases (disease genetics); and subdividing patients in clinical trials according to variations in drug response (pharma- 1. Genomics in its narrow sense contrasts with genetics. Roughly, the former concerns itself with the common “standard” genetic makeup, the latter with the distinctive genetic makeup of individuals. But in its broader sense, genomics includes genetics. In this report, the context makes clear which sense is intended.
cogenetics). The productivity gains will be realized mostly in later phases of the value chain, through the boosting of success rates. This genetics wave is still gathering strength, but in due course could make an even greater impact on R&D than the genomics wave. In an ideal scenario, the savings would exceed half a billion dollars per drug. Several troubling hurdles would have to be negotiated first, however. These include: • Scientific and technical hurdles. For genetics approaches to work, the disease susceptibility or drug response has to be genetic in nature. The gene in question has to be identifiable and must lead to a drugable target and/or be found in time to streamline trials. • Economic and market hurdles. The cost of conducting genetics studies will need to drop, and the opportunity cost of a restricted label could offset the potential market upside of pharmacogenetics. Beyond these hurdles, other challenges will need to be addressed: • Difficult investment decisions will have to be made, weighing high risk against potentially high rewards. Companies will need to decide exactly how to participate in genetics—whether to invest in genetics approaches, and how deeply, consistent with their level of risk tolerance. • Unprecedented coordination between marketing and R&D will be necessary. Marketing will need to have a say in deciding which markets and which genetic diseases R&D should concentrate on, and will need to become involved earlier than ever. • Careful attention will need to be given to ethical considerations. Companies will have to ensure privacy of genetic material, and be prepared to address any concerns the public may have. Managerial Challenges With the new wealth of options and the increased interdependencies across the value chain, strategic issues will prove more complex than in the past. Likewise operational issues: many traditional ways of doing business will be disrupted by genomics technologies, and companies may need to restructure fairly drastically. The range of strategic options available to a company will be dictated by the company’s starting position—its size, beliefs, aspirations, and capabilities. Given the magnitude of the opportunities and 7
Page 1 and 2: A Revolution in R&D HOW GENOMICS AN
Page 3 and 4: A Revolution in R&D HOW GENOMICS AN
Page 5 and 6: Table of Contents ABOUT THE AUTHORS
Page 7: Foreword To meet growth targets, ph
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 56 and 57: 54 other—often literally—on col
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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A Revolution in R&D

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