SOURCE: Tufts Center for the Study of Drug Development

March 26, 2007 09:00 ET

Big Pharma-Biotech Partnering Holds Promise for Improving R&D Productivity, According to Industry Panel Convened by the Tufts Center for the Study of Drug Development

BOSTON, MA -- (MARKET WIRE) -- March 26, 2007 -- Challenged to maintain revenue growth over the next five years, large pharmaceutical companies increasingly will partner with biotech firms to improve clinical development and R&D productivity, according to a panel of industry leaders convened by the Tufts Center for the Study of Drug Development.

While aiming for annual real revenue growth in the 5%-8% range through 2012, large pharmaceutical firms individually face potential sales gaps of tens of billions of dollars. Meeting those goals would require companies to develop and introduce 12 - 50 new products between now and 2012, or about two to nine each year.

During the last five years, the top 10 pharmaceutical firms have typically brought about 0.6 new drug products to market annually, according to Tufts CSDD.

"Success in new drug development rests to a large degree on determining if you have a clinically meaningful product sooner rather than later," said Tufts CSDD Director Kenneth I Kaitin, who co-chaired the panel. "Since small and mid-tier companies and biotechs operate principally in Phase I and II development, they can feed new molecular entities efficiently to large pharma."

According to Tufts CSDD, although U.S. approvals of new molecular entities, known as NMEs, increased 29% from 2001 to 2004, large pharma's share dropped by more than half -- from 67% of total approvals to 29%.

"Even though small-mid tier pharma and biotech are helping to fill the product development gap, new, more complex products raise the costs of late stage clinical failures for all developers," Kaitin noted.

While biotech products currently have greater overall clinical success rates than large pharma, biotech products are more likely to fail in Phase III.

Kaitin said R&D organizations that focus their resources on what they do best, and outsource non-core strengths, will be the ones most likely to prosper.

A summary of the panel discussion on structuring the clinical organization to improve R&D productivity was released today as a Tufts CSDD R&D Management Report.

Included among other issues addressed by the panel were the following:

*    The decision to outsource depends on a business decision that
determines if outsourcing will add value to the business above and beyond
the cost savings resulting from negotiations with partners.

*    A rapidly maturing biotech industry needs to develop metrics that
enable decisions to be made in real time, e.g. the decision to kill
unpromising compounds early or adapt clinical trial design.

*    Proper deployment and use of information technology systems will help
streamline clinical development and improve R&D productivity; the key is to
design the system to reduce risk, not cost or time, as reducing risk will
lead to cost and time savings.
Participating in the panel were the following:
* Kenneth I Kaitin (Meeting Co-Chair), Director, Tufts Center for the Study
of Drug Development
* Susan J. Ward (Meeting Co-Chair), Executive Advisor to Biotechnology,
their Suppliers, and Investors
* Burt Adelman, Executive Vice President, Portfolio Strategy, Biogen Idec
* Alexis Borisy, CEO, CombinatoRx
* Errol DeSouza, President, CEO, Director, Archemix Corporation
* Steven R. Eby, Senior Director, Planning & Operations, Biomedical &
Regulatory Affairs, Genzyme Corporation
* Kathy Ford, Vice President, Clinical Operations, Millennium
Pharmaceuticals, Inc.
* Paul Lammers, Chief Medical Officer, Serono, Inc.
* Steven Schmidt, Vice President, Chief Information Officer, Vertex
Pharmaceuticals, Inc.
* Susannah Walpole, Director of Clinical Operations, Sirtris
Pharmaceuticals, Inc.
* Marc L. Watrous, Pharm., Senior Director, Pricing Strategy, Genentech,
About the Tufts Center for the Study of Drug Development

The Tufts Center for the Study of Drug Development ( at Tufts University provides strategic information to help drug developers, regulators, and policy makers improve the quality and efficiency of pharmaceutical development, review, and utilization. Tufts CSDD, based in Boston, conducts a wide range of in-depth analyses on pharmaceutical issues and hosts symposia, workshops, and public forums on related topics, and publishes the Tufts CSDD Impact Report, a bi-monthly newsletter providing analysis and insight into critical drug development issues.

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